Forex Market Update
This morning, the US Dollar is trading lower against most of the major currencies.
The Euro is trading on a strong footing, following the release of the better-than-expected PMI data across the Euro-zone. The manufacturing activity of the Euro-zone rose to its highest level in almost 33 months, thereby indicating that the recovery in the region has indeed gained momentum. Meanwhile, the manufacturing activity in Germany also expanded at the highest pace since May 2011 this month. However, the French manufacturing and services PMI despite rising more than expected, remained in contraction territory.
Early today, the European Central Bank (ECB) President, Mario Draghi rose an alarm against the increased optimism about the recent recovery witnessed in the region and urged that there were still few significant risks of setbacks to the recovery.
In the UK, the Bank of England (BoE) Monetary Policy Committee (MPC) member, Paul Fisher defended the central bank’s forward guidance and signalled that the interest rate would continue to remain low, despite recent upbeat employment data.
The Canadian Dollar fell sharply after the Bank of Canada (BoC) kept its benchmark interest rate unchanged at 1.0% and indicated that the currency is still strong enough, thereby posing a competitive challenge for Canadian exports.
This morning, the Bank of Japan (BoJ) in its latest monthly economic survey indicated that the nation’s economy is likely to continue to recover moderately, mainly due to pick up in exports and business fixed investments.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3635 against the USD, 0.65% higher from the New York close, as a pick up in the manufacturing activity gauges across the Euro-zone signaled that the bloc is inching forward on the path of recovery. Also, the Euro-zone’s current account surplus widened in November. Meanwhile, the ECB President, Mario Draghi, warned against the excessive optimism about growth prospects of the Euro-zone. During the session, the pair traded at a high of 1.3647 and a low of 1.3530. Yesterday, the EUR traded 0.17% lower against the USD in the New York session, and closed at 1.3547.
The pair is expected to find its first support at 1.3561 and first resistance at 1.3678.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6595 against the USD, 0.13% higher from the New York close, as one of the BoE’s leading policy makers, Paul Fisher, backed the requirement of lower interest rates in the UK, despite the tremendous improvement in the nation’s labor market, to ensure sustainable growth. Later today, investors are expected to keep a close tab on the UK’s trade survey data released by the Confederation of British Industry. During the session, the pair traded at a high of 1.6618 and a low of 1.6557. Yesterday, the British Pound traded 0.08% higher versus the Dollar in the New York session, and closed at 1.6574.
The pair is expected to find its first support at 1.6543 and first resistance at 1.6633.
USD JPY
The USD is trading at 104.31 against the JPY at 10:40 GMT this morning, 0.22% lower from the New York close. The Bank of Japan’s monthly economic survey echoed its previous views that nation’s economy continues to recover moderately. During the session, the pair traded at a high of 104.86 and a low of 104.20. In the New York session yesterday, the USD traded 0.19% higher against the JPY, and closed at 104.54.
The pair is expected to find its first support at 104.05 and first resistance at 104.71.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9033 against the Swiss Franc, 0.91% lower from the New York close. During the session, the pair traded at a high of 0.9135 and a low of 0.9019. In the New York session yesterday, the USD traded 0.20% higher against the CHF, and closed at 0.9116.
The pair is expected to find its first support at 0.8990 and first resistance at 0.9106.
USD CAD
At 10:40 GMT, the USD is trading at 1.1151 against the CAD, 0.59% higher from the New York close. Ahead today, the Canadian retail sales data would release at 13:30 GMT. A rebound in the retail sales may spark a short-term correction in the pair as it raises the fundamental outlook for growth and inflation in Canada. During the session, the pair traded at a high of 1.1175 and a low of 1.1082. Yesterday, the USD traded 1.11% higher against the CAD in the New York session, and closed at 1.1086. The Canadian Dollar lost momentum, after the Bank of Canada (BoC) in its monthly monetary policy meeting decided to keep its benchmark interest rate unchanged at 1.0% and indicated that a strength in the Loonie still poses a challenge to the nation’s exports.
The pair is expected to find its first support at 1.1010 and first resistance at 1.1234.
AUD USD
The AUD is trading at 0.8806 against the USD, at 10:40 GMT this morning, 0.50% lower from the New York close, after a report revealed that the HSBC manufacturing PMI in China, largest trading partner of Australia, unexpectedly declined to a reading of 49.6 in January, from a level of 50.5 registered in the previous month. On the domestic macro front, the Melbourne Institute reported that the consumer inflation expectation in Australia rose to 2.3% in December, compared to previous month’s level of 2.1%. During the session, the pair traded at a high of 0.8855 and a low of 0.8773. AUD traded 0.32% lower against the USD in the New York session, and closed at 0.8850.
The pair is expected to find its first support at 0.8758 and first resistance at 0.8869.
Gold
At 10:40 GMT, Gold is trading at $1245.11 per ounce, 0.66% higher from the New York close. However, increased speculations that the Fed would further wind down its massive stimulus for the US economy at its meeting on January 28-29, weighed on the gold prices. This morning, Gold traded at a high of $1248.27 and a low of $1231.85 per ounce. In the New York session yesterday, the yellow metal traded 0.35% lower, and closed at $1236.90, as concerns over a slowdown in physical demand of gold in China.
Gold has its first support at $1235.22 and first resistance at $1251.64.
Silver
Silver is trading at $20.10 per ounce, 1.53% higher from the New York close, at 10:40 GMT this morning. However, gains were kept in check as disappointing Chinese manufacturing PMI data raised the speculation that industrial demand for white metal from the nation may slow down. This morning, Silver traded at a high of $20.17 and a low of $19.66. Silver traded 0.32% lower against the USD in the New York session, and closed at $19.80.
Silver has its first support at $19.78 and first resistance at $20.29.
Crude Oil
At 10:40 GMT, Oil is trading at $96.67 per barrel, tad lower from the New York close, after the International Energy Agency (IEA) reported that the world oil consumption is expected to increase by 1.3 million bpd this year, 50,000 bpd higher than earlier forecast. Also, the American Petroleum Institute (API) stated that US crude inventories rose by 4.86 million barrels in the week ended January 17. The prices also came under pressure, after data indicated that China’s HSBC Flash purchasing managers’ index fell to a six-month low in January. This morning, Oil traded at a high of $96.90 and a low of $96.41. Yesterday, Oil traded 1.30% higher in the New York session, and closed at $96.69.
It has its first support at $95.69 and first resistance at $97.27.
Economic Snapshot
Euro-zone’s PMI rises more than forecast in January
The preliminary manufacturing PMI in the Euro-zone increased to a reading of 53.9 in January, following a revised reading of 52.7 in the previous month. Meanwhile, preliminary services PMI in the Euro-zone rose to reading of 51.9 in January, from a reading of 51.0 in the previous month.
Euro-zone’s current account surplus widened in November
The seasonally adjusted current account surplus of the Euro-zone widened to €23.5 billion in November, from an upwardly revised surplus of €22.2 billion recorded in the previous month.
ECB Draghi cautioned against the excessive optimism over Euro-zone recovery
The European Central Bank (ECB) President, Mario Draghi, in an interview, warned against excessive optimism as the Euro area recovery still remains weak and uneven and faces risk of setback. He further stated that “inflation and deflation risks are limited” and the central bank has sufficient instruments available to ensure price stability.
German manufacturing PMI advanced more than expectation in January
The preliminary manufacturing PMI in Germany increased to reading of 56.3 in January, following a reading of 54.3 in the previous month. Market had expected the index to rise to 54.4 in January. Meanwhile, the preliminary services PMI in Germany increased to reading of 53.6 in January, from a reading of 53.5 in the previous month.
French manufacturing and services PMIs rose more than expected in January
The preliminary manufacturing PMI in France climbed to a reading of 48.8 in January, from a reading of 47.0 recorded in the previous month. Market had expected the index to rise to a reading of 47.5 in January. Meanwhile, the preliminary services PMI rose to a reading of 48.6 in January, from a reading of 47.8 reported in the preceding month. Market had expected the index to rise to a reading of 48.1.
Spain’s unemployment rate climbed more than forecast in Q4 2013
The unemployment rate in Spain rose to 26.03% in Q4 2013, compared to a rate of 25.98% reported in Q3 2013. Markets were expecting the unemployment rate to rise to 26.00% in Q4 2013.
Japanese economy continued to recover moderately: BoJ monthly economic survey
The Bank of Japan (BoJ) in its latest monthly economic survey indicated that the nation’s economy is likely to continue to recover moderately, mainly due to pick up in exports& business fixed investments. However, the report indicated that the recovery path is expected to be affected by the front loaded rise and subsequent decline in demand prior to and after the consumption tax hike.
Australia consumer inflation expectation rose in January
The consumer inflation expectations in Australia climbed to 2.3% in January, compared to a rate of 2.1% recorded in the previous month.
Chinese Markit flash manufacturing PMI dropped in January
The flash manufacturing PMI in China fell to a reading of 49.6 in January, compared to a final reading of 50.5 reported in the previous month. Market had expected the index to fall to a reading of 50.4 in January.
This morning, the US Dollar is trading lower against most of the major currencies.
The Euro is trading on a strong footing, following the release of the better-than-expected PMI data across the Euro-zone. The manufacturing activity of the Euro-zone rose to its highest level in almost 33 months, thereby indicating that the recovery in the region has indeed gained momentum. Meanwhile, the manufacturing activity in Germany also expanded at the highest pace since May 2011 this month. However, the French manufacturing and services PMI despite rising more than expected, remained in contraction territory.
Early today, the European Central Bank (ECB) President, Mario Draghi rose an alarm against the increased optimism about the recent recovery witnessed in the region and urged that there were still few significant risks of setbacks to the recovery.
In the UK, the Bank of England (BoE) Monetary Policy Committee (MPC) member, Paul Fisher defended the central bank’s forward guidance and signalled that the interest rate would continue to remain low, despite recent upbeat employment data.
The Canadian Dollar fell sharply after the Bank of Canada (BoC) kept its benchmark interest rate unchanged at 1.0% and indicated that the currency is still strong enough, thereby posing a competitive challenge for Canadian exports.
This morning, the Bank of Japan (BoJ) in its latest monthly economic survey indicated that the nation’s economy is likely to continue to recover moderately, mainly due to pick up in exports and business fixed investments.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3635 against the USD, 0.65% higher from the New York close, as a pick up in the manufacturing activity gauges across the Euro-zone signaled that the bloc is inching forward on the path of recovery. Also, the Euro-zone’s current account surplus widened in November. Meanwhile, the ECB President, Mario Draghi, warned against the excessive optimism about growth prospects of the Euro-zone. During the session, the pair traded at a high of 1.3647 and a low of 1.3530. Yesterday, the EUR traded 0.17% lower against the USD in the New York session, and closed at 1.3547.
The pair is expected to find its first support at 1.3561 and first resistance at 1.3678.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6595 against the USD, 0.13% higher from the New York close, as one of the BoE’s leading policy makers, Paul Fisher, backed the requirement of lower interest rates in the UK, despite the tremendous improvement in the nation’s labor market, to ensure sustainable growth. Later today, investors are expected to keep a close tab on the UK’s trade survey data released by the Confederation of British Industry. During the session, the pair traded at a high of 1.6618 and a low of 1.6557. Yesterday, the British Pound traded 0.08% higher versus the Dollar in the New York session, and closed at 1.6574.
The pair is expected to find its first support at 1.6543 and first resistance at 1.6633.
USD JPY
The USD is trading at 104.31 against the JPY at 10:40 GMT this morning, 0.22% lower from the New York close. The Bank of Japan’s monthly economic survey echoed its previous views that nation’s economy continues to recover moderately. During the session, the pair traded at a high of 104.86 and a low of 104.20. In the New York session yesterday, the USD traded 0.19% higher against the JPY, and closed at 104.54.
The pair is expected to find its first support at 104.05 and first resistance at 104.71.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9033 against the Swiss Franc, 0.91% lower from the New York close. During the session, the pair traded at a high of 0.9135 and a low of 0.9019. In the New York session yesterday, the USD traded 0.20% higher against the CHF, and closed at 0.9116.
The pair is expected to find its first support at 0.8990 and first resistance at 0.9106.
USD CAD
At 10:40 GMT, the USD is trading at 1.1151 against the CAD, 0.59% higher from the New York close. Ahead today, the Canadian retail sales data would release at 13:30 GMT. A rebound in the retail sales may spark a short-term correction in the pair as it raises the fundamental outlook for growth and inflation in Canada. During the session, the pair traded at a high of 1.1175 and a low of 1.1082. Yesterday, the USD traded 1.11% higher against the CAD in the New York session, and closed at 1.1086. The Canadian Dollar lost momentum, after the Bank of Canada (BoC) in its monthly monetary policy meeting decided to keep its benchmark interest rate unchanged at 1.0% and indicated that a strength in the Loonie still poses a challenge to the nation’s exports.
The pair is expected to find its first support at 1.1010 and first resistance at 1.1234.
AUD USD
The AUD is trading at 0.8806 against the USD, at 10:40 GMT this morning, 0.50% lower from the New York close, after a report revealed that the HSBC manufacturing PMI in China, largest trading partner of Australia, unexpectedly declined to a reading of 49.6 in January, from a level of 50.5 registered in the previous month. On the domestic macro front, the Melbourne Institute reported that the consumer inflation expectation in Australia rose to 2.3% in December, compared to previous month’s level of 2.1%. During the session, the pair traded at a high of 0.8855 and a low of 0.8773. AUD traded 0.32% lower against the USD in the New York session, and closed at 0.8850.
The pair is expected to find its first support at 0.8758 and first resistance at 0.8869.
Gold
At 10:40 GMT, Gold is trading at $1245.11 per ounce, 0.66% higher from the New York close. However, increased speculations that the Fed would further wind down its massive stimulus for the US economy at its meeting on January 28-29, weighed on the gold prices. This morning, Gold traded at a high of $1248.27 and a low of $1231.85 per ounce. In the New York session yesterday, the yellow metal traded 0.35% lower, and closed at $1236.90, as concerns over a slowdown in physical demand of gold in China.
Gold has its first support at $1235.22 and first resistance at $1251.64.
Silver
Silver is trading at $20.10 per ounce, 1.53% higher from the New York close, at 10:40 GMT this morning. However, gains were kept in check as disappointing Chinese manufacturing PMI data raised the speculation that industrial demand for white metal from the nation may slow down. This morning, Silver traded at a high of $20.17 and a low of $19.66. Silver traded 0.32% lower against the USD in the New York session, and closed at $19.80.
Silver has its first support at $19.78 and first resistance at $20.29.
Crude Oil
At 10:40 GMT, Oil is trading at $96.67 per barrel, tad lower from the New York close, after the International Energy Agency (IEA) reported that the world oil consumption is expected to increase by 1.3 million bpd this year, 50,000 bpd higher than earlier forecast. Also, the American Petroleum Institute (API) stated that US crude inventories rose by 4.86 million barrels in the week ended January 17. The prices also came under pressure, after data indicated that China’s HSBC Flash purchasing managers’ index fell to a six-month low in January. This morning, Oil traded at a high of $96.90 and a low of $96.41. Yesterday, Oil traded 1.30% higher in the New York session, and closed at $96.69.
It has its first support at $95.69 and first resistance at $97.27.
Economic Snapshot
Euro-zone’s PMI rises more than forecast in January
The preliminary manufacturing PMI in the Euro-zone increased to a reading of 53.9 in January, following a revised reading of 52.7 in the previous month. Meanwhile, preliminary services PMI in the Euro-zone rose to reading of 51.9 in January, from a reading of 51.0 in the previous month.
Euro-zone’s current account surplus widened in November
The seasonally adjusted current account surplus of the Euro-zone widened to €23.5 billion in November, from an upwardly revised surplus of €22.2 billion recorded in the previous month.
ECB Draghi cautioned against the excessive optimism over Euro-zone recovery
The European Central Bank (ECB) President, Mario Draghi, in an interview, warned against excessive optimism as the Euro area recovery still remains weak and uneven and faces risk of setback. He further stated that “inflation and deflation risks are limited” and the central bank has sufficient instruments available to ensure price stability.
German manufacturing PMI advanced more than expectation in January
The preliminary manufacturing PMI in Germany increased to reading of 56.3 in January, following a reading of 54.3 in the previous month. Market had expected the index to rise to 54.4 in January. Meanwhile, the preliminary services PMI in Germany increased to reading of 53.6 in January, from a reading of 53.5 in the previous month.
French manufacturing and services PMIs rose more than expected in January
The preliminary manufacturing PMI in France climbed to a reading of 48.8 in January, from a reading of 47.0 recorded in the previous month. Market had expected the index to rise to a reading of 47.5 in January. Meanwhile, the preliminary services PMI rose to a reading of 48.6 in January, from a reading of 47.8 reported in the preceding month. Market had expected the index to rise to a reading of 48.1.
Spain’s unemployment rate climbed more than forecast in Q4 2013
The unemployment rate in Spain rose to 26.03% in Q4 2013, compared to a rate of 25.98% reported in Q3 2013. Markets were expecting the unemployment rate to rise to 26.00% in Q4 2013.
Japanese economy continued to recover moderately: BoJ monthly economic survey
The Bank of Japan (BoJ) in its latest monthly economic survey indicated that the nation’s economy is likely to continue to recover moderately, mainly due to pick up in exports& business fixed investments. However, the report indicated that the recovery path is expected to be affected by the front loaded rise and subsequent decline in demand prior to and after the consumption tax hike.
Australia consumer inflation expectation rose in January
The consumer inflation expectations in Australia climbed to 2.3% in January, compared to a rate of 2.1% recorded in the previous month.
Chinese Markit flash manufacturing PMI dropped in January
The flash manufacturing PMI in China fell to a reading of 49.6 in January, compared to a final reading of 50.5 reported in the previous month. Market had expected the index to fall to a reading of 50.4 in January.
Happy pips.
