Forex Market Update
This morning, the greenback rose against most of its key peers, as the US Federal Reserve’s (Fed) Beige Book provided a bullish outlook for the US economy. It revealed that the nation showed impressive signs of growth during the final months of 2013, on the back of increased consumer spending and factory output. It also noted that labor market in the nation too has showed tremendous signs of recovery.
Meanwhile, the Fed’s regional President from Chicago hinted that the central bank is expected to continue with its tapering process at each meeting. Against this backdrop and amid yesterday’s comments by the IMF Chief, Christine Lagarde that deflation threat continues to persist for advanced global economies, today’s domestic inflation report will attract significant market attention. Also, the weekly initial jobless claims data and manufacturing data in Philadelphia would remain on the radar of investors.
Data released this morning revealed that the inflation in Germany and Euro-zone rose in line with market expectations. Meanwhile, the European Central Bank’s (ECB) monthly report reiterated its previous stance of loose monetary stance in the Euro-area.
The Australian Dollar has continued to trade with a downward bias against the US Dollar in today’s trading session, as dismal jobs data which showed that the number of people employed in Australia unexpectedly declined for December, proved a dampener for the local currency.
Meanwhile, the Bank of Japan (BoJ) Governor, Haruhiko Kuroda stated that the central bank will maintain its aggressive easing policy until the annual inflation rate is brought to around 2%.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3618 against the USD, 0.10% higher from the New York close, reversing its previous session losses. Meanwhile, the ECB’s monthly report released today morning emphasized upon the necessity of the loose monetary policy to ensure sustainable growth in the bloc. It further stated that the Euro region is expected to experience more volatility in the money market rates. In economic news, consumer prices in Germany and Euro-zone rose in line with market expectations in December. During the session, the pair traded at a high of 1.3629 and a low of 1.3585. Yesterday, the EUR traded 0.05% lower against the USD in the New York session, and closed at 1.3605.
The pair is expected to find its first support at 1.3589 and first resistance at 1.3638.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6339 against the USD, 0.18% lower from the New York close, after house prices in the UK increased less than market expectations. With no domestic releases in store today, traders would keep a tab on domestic retail sales data, especially against the backdrop of slower than expected sales reported by the BRC last week. During the session, the pair traded at a high of 1.6377 and a low of 1.6314. Yesterday, the British Pound traded 0.21% lower versus the Dollar in the New York session, and closed at 1.6369.
The pair is expected to find its first support at 1.6289 and first resistance at 1.6414.
USD JPY
The USD is trading at 104.72 against the JPY at 10:40 GMT this morning, 0.15% higher from the New York close. The BoJ’s Governor, Haruhiko Kuroda, reaffirmed that the central bank’s monetary stance would continue to remain accommodative until the nation’s inflation hits the 2% target. He further added that the Japanese economy’s expected moderate recovery may be affected by fluctuations in demand before and after the upcoming sales tax hike. In economic news, machine orders in Japan surged more than market expectations in November, as demand picked up ahead of April sales tax hike. During the session, the pair traded at a high of 104.94 and a low of 104.55. In the New York session yesterday, the USD traded 0.30% higher against the JPY, and closed at 104.57.
The pair is expected to find its first support at 104.31 and first resistance at 105.04.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9076 against the Swiss Franc, 0.12% lower from the New York close, ahead of the Swiss National Bank’s Chief, Thomas Jordan’s speech scheduled later during the day. During the session, the pair traded at a high of 0.9105 and a low of 0.9060. In the New York session yesterday, the USD traded 0.13% higher against the CHF, and closed at 0.9087.
The pair is expected to find its first support at 0.9054 and first resistance at 0.9104.
USD CAD
At 10:40 GMT, the USD is trading at 1.0938 against the CAD, marginally lower from the New York close. During the session, the pair traded at a high of 1.0964 and a low of 1.0927. Yesterday, the USD traded 0.13% lower against the CAD in the New York session, and closed at 1.0943. In economic news, existing home sales in Canada dropped further in December.
The pair is expected to find its first support at 1.0912 and first resistance at 1.0972.
AUD USD
The AUD is trading at 0.8788 against the USD, at 10:40 GMT this morning, 1.44% lower from the New York close, after a drastic decline in jobs in Australia in last month, making it the worst performing currency today. Meanwhile, the jobless rate in the nation remained unchanged in December. During the session, the pair traded at a high of 0.8918 and a low of 0.8776. AUD traded tad lower against the USD in the New York session, and closed at 0.8916.
The pair is expected to find its first support at 0.8731 and first resistance at 0.8890.
Gold
At 10:40 GMT, Gold is trading at $1237.62 per ounce, 0.34% lower from the New York close, as greenback continued to strengthened on the back of upbeat macroeconomic data, convincing investors that the Fed may continue taper its monthly bond purchases in the coming months. This morning, Gold traded at a high of $1244.00 and a low of $1236.45 per ounce. In the New York session yesterday, the yellow metal traded 0.35% higher, and closed at $1241.90.
Gold has its first support at $1233.33 and first resistance at $1242.95.
Silver
Silver is trading at $20.01 per ounce, 0.93% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.26 and a low of $19.98. Silver traded 0.79% higher against the USD in the New York session, and closed at $20.19.
Silver has its first support at $19.88 and first resistance at $20.20.
Crude Oil
At 10:40 GMT, Oil is trading at $94.53 per barrel, 0.20% higher from the New York close, as investors booked profits following the recent rally in the oil prices. This morning, Oil traded at a high of $94.64 and a low of $93.86. Yesterday, Oil traded 1.54% higher in the New York session, and closed at $94.31, after the Energy Information Administration reported a 7.7 million barrels drop in the US crude oil inventories for the week ended January 10.
It has its first support at $93.23 and first resistance at $95.23.
Economic Snapshot
UK RICS house price balance dropped in December
The Royal Institution of Chartered Surveyors (RICS) reported that house price balance in the UK dropped to a level of 56.0% in December, following an increase of 58.0% recorded in the preceding month. Markets were expecting house price balance to rise to 60.0% in December.
Accommodative policy to continue, emphasizes ECB monthly report
The European Central Bank’s (ECB) monthly report for January reiterated that it would maintain its accommodative money policy for as long as necessary. The report further indicated that there could be more volatility in money market rates and it could rise gradually toward the main refinancing rate.
Euro-zone consumer prices rebounded in line with market estimates in December
On an annual basis, the final consumer price index in the Euro-zone increased to 0.8% in December, in line with preliminary estimates and from a rate of 0.9% recorded in the preceding month.
Germany’s final CPI climbed in line with the preliminary estimates in December
On an annual basis, final German consumer price index (CPI) advanced 1.4% in December, in line with the preliminary estimates and following a 1.3% rise recorded in previous month.
Italy trade surplus narrowed in November
The global trade surplus of Italy narrowed to €3.09 billion in November, against a downwardly revised surplus of €4.06 billion recorded in the previous month. Additionally, Italy’s (EU countries) trade surplus narrowed to €0.71 billion in November, from a downwardly revised surplus of €1.16 billion recorded in the preceding month.
Australia RBA’s foreign exchange transactions climbed in December
RBA foreign exchange transaction rose to a level of A$884.0 million in December, from a level of A$444.0 million in the previous month.
Australia’s unemployment rate remained steady in December
On a seasonally adjusted basis, unemployment rate in Australia remained unchanged at 5.8% in December, in line with market expectations and compared to a similar rate reported in the preceding month. Meanwhile, seasonally adjusted number of people employed in Australia fell by 22.6K in December, following a downwardly revised rise of 15.4K in the previous month.
Chinese foreign direct investment increased at a faster pace in December
On an annual basis, actual foreign direct investment (FDI) in China rose 3.3% in December, compared to a 2.4% rise recorded in the previous month. Markets had expected China’s actual FDI to increase 2.5% in December. On a year to date basis, FDI in China rose 5.3% for 2013, slower compared to a 5.5% rise reported for January to November 2013.
This morning, the greenback rose against most of its key peers, as the US Federal Reserve’s (Fed) Beige Book provided a bullish outlook for the US economy. It revealed that the nation showed impressive signs of growth during the final months of 2013, on the back of increased consumer spending and factory output. It also noted that labor market in the nation too has showed tremendous signs of recovery.
Meanwhile, the Fed’s regional President from Chicago hinted that the central bank is expected to continue with its tapering process at each meeting. Against this backdrop and amid yesterday’s comments by the IMF Chief, Christine Lagarde that deflation threat continues to persist for advanced global economies, today’s domestic inflation report will attract significant market attention. Also, the weekly initial jobless claims data and manufacturing data in Philadelphia would remain on the radar of investors.
Data released this morning revealed that the inflation in Germany and Euro-zone rose in line with market expectations. Meanwhile, the European Central Bank’s (ECB) monthly report reiterated its previous stance of loose monetary stance in the Euro-area.
The Australian Dollar has continued to trade with a downward bias against the US Dollar in today’s trading session, as dismal jobs data which showed that the number of people employed in Australia unexpectedly declined for December, proved a dampener for the local currency.
Meanwhile, the Bank of Japan (BoJ) Governor, Haruhiko Kuroda stated that the central bank will maintain its aggressive easing policy until the annual inflation rate is brought to around 2%.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3618 against the USD, 0.10% higher from the New York close, reversing its previous session losses. Meanwhile, the ECB’s monthly report released today morning emphasized upon the necessity of the loose monetary policy to ensure sustainable growth in the bloc. It further stated that the Euro region is expected to experience more volatility in the money market rates. In economic news, consumer prices in Germany and Euro-zone rose in line with market expectations in December. During the session, the pair traded at a high of 1.3629 and a low of 1.3585. Yesterday, the EUR traded 0.05% lower against the USD in the New York session, and closed at 1.3605.
The pair is expected to find its first support at 1.3589 and first resistance at 1.3638.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6339 against the USD, 0.18% lower from the New York close, after house prices in the UK increased less than market expectations. With no domestic releases in store today, traders would keep a tab on domestic retail sales data, especially against the backdrop of slower than expected sales reported by the BRC last week. During the session, the pair traded at a high of 1.6377 and a low of 1.6314. Yesterday, the British Pound traded 0.21% lower versus the Dollar in the New York session, and closed at 1.6369.
The pair is expected to find its first support at 1.6289 and first resistance at 1.6414.
USD JPY
The USD is trading at 104.72 against the JPY at 10:40 GMT this morning, 0.15% higher from the New York close. The BoJ’s Governor, Haruhiko Kuroda, reaffirmed that the central bank’s monetary stance would continue to remain accommodative until the nation’s inflation hits the 2% target. He further added that the Japanese economy’s expected moderate recovery may be affected by fluctuations in demand before and after the upcoming sales tax hike. In economic news, machine orders in Japan surged more than market expectations in November, as demand picked up ahead of April sales tax hike. During the session, the pair traded at a high of 104.94 and a low of 104.55. In the New York session yesterday, the USD traded 0.30% higher against the JPY, and closed at 104.57.
The pair is expected to find its first support at 104.31 and first resistance at 105.04.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9076 against the Swiss Franc, 0.12% lower from the New York close, ahead of the Swiss National Bank’s Chief, Thomas Jordan’s speech scheduled later during the day. During the session, the pair traded at a high of 0.9105 and a low of 0.9060. In the New York session yesterday, the USD traded 0.13% higher against the CHF, and closed at 0.9087.
The pair is expected to find its first support at 0.9054 and first resistance at 0.9104.
USD CAD
At 10:40 GMT, the USD is trading at 1.0938 against the CAD, marginally lower from the New York close. During the session, the pair traded at a high of 1.0964 and a low of 1.0927. Yesterday, the USD traded 0.13% lower against the CAD in the New York session, and closed at 1.0943. In economic news, existing home sales in Canada dropped further in December.
The pair is expected to find its first support at 1.0912 and first resistance at 1.0972.
AUD USD
The AUD is trading at 0.8788 against the USD, at 10:40 GMT this morning, 1.44% lower from the New York close, after a drastic decline in jobs in Australia in last month, making it the worst performing currency today. Meanwhile, the jobless rate in the nation remained unchanged in December. During the session, the pair traded at a high of 0.8918 and a low of 0.8776. AUD traded tad lower against the USD in the New York session, and closed at 0.8916.
The pair is expected to find its first support at 0.8731 and first resistance at 0.8890.
Gold
At 10:40 GMT, Gold is trading at $1237.62 per ounce, 0.34% lower from the New York close, as greenback continued to strengthened on the back of upbeat macroeconomic data, convincing investors that the Fed may continue taper its monthly bond purchases in the coming months. This morning, Gold traded at a high of $1244.00 and a low of $1236.45 per ounce. In the New York session yesterday, the yellow metal traded 0.35% higher, and closed at $1241.90.
Gold has its first support at $1233.33 and first resistance at $1242.95.
Silver
Silver is trading at $20.01 per ounce, 0.93% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.26 and a low of $19.98. Silver traded 0.79% higher against the USD in the New York session, and closed at $20.19.
Silver has its first support at $19.88 and first resistance at $20.20.
Crude Oil
At 10:40 GMT, Oil is trading at $94.53 per barrel, 0.20% higher from the New York close, as investors booked profits following the recent rally in the oil prices. This morning, Oil traded at a high of $94.64 and a low of $93.86. Yesterday, Oil traded 1.54% higher in the New York session, and closed at $94.31, after the Energy Information Administration reported a 7.7 million barrels drop in the US crude oil inventories for the week ended January 10.
It has its first support at $93.23 and first resistance at $95.23.
Economic Snapshot
UK RICS house price balance dropped in December
The Royal Institution of Chartered Surveyors (RICS) reported that house price balance in the UK dropped to a level of 56.0% in December, following an increase of 58.0% recorded in the preceding month. Markets were expecting house price balance to rise to 60.0% in December.
Accommodative policy to continue, emphasizes ECB monthly report
The European Central Bank’s (ECB) monthly report for January reiterated that it would maintain its accommodative money policy for as long as necessary. The report further indicated that there could be more volatility in money market rates and it could rise gradually toward the main refinancing rate.
Euro-zone consumer prices rebounded in line with market estimates in December
On an annual basis, the final consumer price index in the Euro-zone increased to 0.8% in December, in line with preliminary estimates and from a rate of 0.9% recorded in the preceding month.
Germany’s final CPI climbed in line with the preliminary estimates in December
On an annual basis, final German consumer price index (CPI) advanced 1.4% in December, in line with the preliminary estimates and following a 1.3% rise recorded in previous month.
Italy trade surplus narrowed in November
The global trade surplus of Italy narrowed to €3.09 billion in November, against a downwardly revised surplus of €4.06 billion recorded in the previous month. Additionally, Italy’s (EU countries) trade surplus narrowed to €0.71 billion in November, from a downwardly revised surplus of €1.16 billion recorded in the preceding month.
Australia RBA’s foreign exchange transactions climbed in December
RBA foreign exchange transaction rose to a level of A$884.0 million in December, from a level of A$444.0 million in the previous month.
Australia’s unemployment rate remained steady in December
On a seasonally adjusted basis, unemployment rate in Australia remained unchanged at 5.8% in December, in line with market expectations and compared to a similar rate reported in the preceding month. Meanwhile, seasonally adjusted number of people employed in Australia fell by 22.6K in December, following a downwardly revised rise of 15.4K in the previous month.
Chinese foreign direct investment increased at a faster pace in December
On an annual basis, actual foreign direct investment (FDI) in China rose 3.3% in December, compared to a 2.4% rise recorded in the previous month. Markets had expected China’s actual FDI to increase 2.5% in December. On a year to date basis, FDI in China rose 5.3% for 2013, slower compared to a 5.5% rise reported for January to November 2013.
Happy pips.
