Forex Market Update
This morning, the US Dollar is trading higher against its key peers, after yesterday’s data showed that the US economy grew strongly in the last quarter of 2013, confirming the views of its central bank that the economic growth in the nation has improved in the recent past. Meanwhile, a separate report released yesterday, revealed that the initial jobless claims in the US rose more than market expectations in previous week. Meanwhile, pending home sales dropped further, whereas, core personal consumption rose in line with market expectations.
It remains to be seen whether investors get some more reason to cheer when Reuters/Michigan consumer sentiment and Chicago PMI data for January is released later during the day in the US.
The Euro is trading in red against the USD, following the release of subdued inflation figures from the Euro-zone for January. Moreover, disappointing German retail sales data weighed on common currency. Additionally, unemployment rate in the Euro-zone remained near a record high of 12% for a third month running in January. Investors would now focus on the ECB policy meeting next week.
The GBP continue to trade lower versus the dollar, following the Federal Reserve’s decision on Wednesday to trim stimulus measures. Also, the Bank of England (BoE) Governor, Mark Carney pledged to keep UK interest rates low. Against this back drop, traders would now turn their attention to next week’s BoE monetary policy meeting.
The Yen inched higher, after the inflation figures in the nation continued to move higher in December. Traders also cheered the improvement in the nation’s manufacturing, industrial production and unemployment data.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3545 against the USD, 0.07% lower from the New York close, as greenback continued to remain supported on the back of a robust US gross domestic product data for the fourth quarter. A larger than expected drop in the German retail sales data and the muted inflation figures from the Euro-zone also weighed on the common currency. Meanwhile, the jobless rate in the Euro-zone remained at a record high in December. During the session, the pair traded at a high of 1.3561 and a low of 1.3517. Yesterday, the EUR traded 0.22% lower against the USD in the New York session, and closed at 1.3555.
The pair is expected to find its first support at 1.3502 and first resistance at 1.3603.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6450 against the USD, 0.23% lower from the New York close. On the data front, consumer confidence in the UK improved in January. During the session, the pair traded at a high of 1.6500 and a low of 1.6445. Yesterday, the British Pound traded marginally higher versus the Dollar in the New York session, and closed at 1.6488.
The pair is expected to find its first support at 1.6423 and first resistance at 1.6499.
USD JPY
The USD is trading at 102.42 against the JPY at 10:40 GMT this morning, 0.29% lower from the New York close. The Yen found support after the consumer price inflation in Japan inched higher in December. Additionally, better than expected labour market, manufacturing PMI and industrial production data also lifted Yen. During the session, the pair traded at a high of 102.95 and a low of 102.29. In the New York session yesterday, the USD traded 0.16% higher against the JPY, and closed at 102.72.
The pair is expected to find its first support at 102.14 and first resistance at 102.83.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9034 against the Swiss Franc, 0.10% higher from the New York close. In the absence of any major macroeconomic triggers in Switzerland, traders would turn their attention to US economic data for further guidance. During the session, the pair traded at a high of 0.9047 and a low of 0.9020. In the New York session yesterday, the USD traded 0.14% higher against the CHF, and closed at 0.9025.
The pair is expected to find its first support at 0.8995 and first resistance at 0.9061.
USD CAD
At 10:40 GMT, the USD is trading at 1.1188 against the CAD, 0.29% higher from the New York close, ahead of the Canadian gross domestic product report to be released later today. During the session, the pair traded at a high of 1.1195 and a low of 1.1153. Yesterday, the USD traded 0.25% lower against the CAD in the New York session, and closed at 1.1156.
The pair is expected to find its first support at 1.1159 and first resistance at 1.1206.
AUD USD
The AUD is trading at 0.8743 against the USD, at 10:40 GMT this morning, 0.59% lower from the New York close. Data released this morning indicated that private sector credit in Australia rose 0.5% (MoM) in December. Traders would now keep a tab on the Reserve Bank of Australia’s interest rate decision that is set to release on Tuesday. During the session, the pair traded at a high of 0.8825 and a low of 0.8734. AUD traded 0.29% higher against the USD in the New York session, and closed at 0.8795.
The pair is expected to find its first support at 0.8710 and first resistance at 0.8801.
Gold
At 10:40 GMT, Gold is trading at $1245.56 per ounce, 0.16% higher from the New York close. This morning, Gold traded at a high of $1246.69 and a low of $1238.60 per ounce. In the New York session yesterday, the yellow metal traded 0.87% lower, and closed at $1243.63, as greenback strengthened after the US growth report rose in line with market expectations.
Gold has its first support at $1236.80 and first resistance at $1255.68.
Silver
Silver is trading at $19.27 per ounce, 0.57% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $19.28 and a low of $19.10. Silver traded 1.26% lower against the USD in the New York session, and closed at $19.16, as the robust growth report from the US confirmed the views of the Fed that growth in the economy has improved in the recent past.
Silver has its first support at $19.02 and first resistance at $19.50.
Crude Oil
At 10:40 GMT, Oil is trading at $97.95 per barrel, 0.10% lower from the New York close. This morning, Oil traded at a high of $98.23 and a low of $97.62. Yesterday, Oil traded 0.38% higher in the New York session, and closed at $98.07.
It has its first support at $97.49 and first resistance at $98.50.
Economic Snapshot
UK Gfk consumer confidence improved in January
GfK consumer confidence in UK rose to a level of -7.0 in January, higher than market expectations of a level of -12.0 and compared to a reading of -13.0 reported in the previous month.
UK Lloyds business barometer rose in January
The Lloyds business barometer in UK climbed to a level of 63.0 in January, from a level of 48.0 in the previous month.
Consumer price index in the Euro-zone rose less than expected in January
On an annual basis, preliminary consumer price index in the Euro-zone rose 0.7% in January, compared to 0.8% rise in the preceding month. Markets were expecting the consumer price index to rise 0.9% in January.
Unemployment rate in the Euro-zone unchanged in December
The unemployment rate in the Euro-zone remained unchanged at 12.0% in December, compared to the revised value in the preceding month. Markets were expecting the unemployment rate to rise to 12.1% in December.
Retail sales in Germany drop unexpectedly in December
On a monthly basis, retail sales in Germany fell 2.5% in December, compared to a revised rise of 0.9% in the preceding month.
French consumer spending declined, while the producer prices advanced
On a monthly basis, consumer spending in France fell 0.1% in December, following an increase of 1.4% recorded in the preceding month. On a monthly basis, producer prices in France advanced 0.2% in December, slower as compared to a 0.5% rise posted in the previous month.
Unemployment rate in Italy declined in line with market expectations in December
The unemployment rate in Italy declined to 12.7% in December, in line with market expectations and compared to a revised rate of 12.8% recorded in the previous month.
Producer price index in Italy dropped more than expected in December
On a monthly basis, the producer price index in Italy fell 0.1% in December, compared to a similar decline reported in the previous month.
Spain CPI advanced less than forecasts in January
On an annual basis, Spain’s preliminary consumer price index (CPI) rose 0.2% in January, following a 0.3% rise in the previous month and less compared to market expectation of a 0.3% increase.
Spain current account surplus narrowed in November
The current account surplus of Spain narrowed to €0.87 billion in November, following a surplus of €1.71 billion in the previous month.
Japan housing starts and construction orders rose at a faster pace in December
On an annual basis, construction orders in Japan increased 4.9% in December, compared to a 2.2% rise recorded in the previous month. Additionally, on an annual basis, housing starts in Japan climbed by 18.0% in December, following an increase of 14.1% in the preceding month. Meanwhile, annualized housing starts in Japan totaled 1.055 million in December, more compared to revised 1.037 million housing starts recorded in the previous month.
Australia producer price index climbed less than anticipated in Q4
The Australian Bureau of Statistics reported that on a quarterly basis, the producer price index in Australia rose 0.2% in Q4, following a rise of 1.3% recorded in the preceding quarter. Markets were expecting the producer price index to rise 0.9% in Q4.
Happy pips.
