Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
Yesterday, the greenback came under pressure after a report showed that activities in the US manufacturing sector contracted more than market expectations in January. Separately, the US Treasury Secretary, Jacob Lew, warned the possibility of a US government default, should the Congress fail to extend the nation’s debt ceiling on an urgent basis.
Ahead in the day, domestic factory orders from the US would remain in focus following disappointing manufacturing data released yesterday.
The Euro advanced against the greenback in the yesterday’s session as risk-appetite among investors increased after manufacturing PMI in the Euro-zone and most of its periphery nations rose in January. However, the common currency came under pressure this morning, after data released earlier today showed that the number of unemployed people in Spain rose more than expected in January.
The Pound is trading higher against the US Dollar, after a report revealed that the activities in the UK construction sector accelerated at the fastest pace in 6-1/2 years in January.
The Aussie rose against its US counterpart, after the Reserve Bank of Australia (RBA) kept its interest rate unchanged at 2.5% and shifted its policy stance away from easing rates, citing higher than forecast inflation.
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, indicated the Japanese economy would achieve its 2% inflation target by the latter half of FY2014 to early FY2015.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3516 against the USD, 0.09% lower from the New York close, amid expectations that the ECB Chief, might need to further loosen its monetary stance, to boost economic activities in the Euro region. In economic news, Euro-zone’s producer price index rose 0.2% (MoM) in December. During the session, the pair traded at a high of 1.3540 and a low of 1.3502. Yesterday, the EUR traded 0.27% higher against the USD in the New York session, and closed at 1.3528.
The pair is expected to find its first support at 1.3487 and first resistance at 1.3543.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6332 against the USD, 0.17% higher from the New York close, after data showed that activities in the UK construction sector unexpectedly accelerated at the fastest pace in more than six years in January. During the session, the pair traded at a high of 1.6347 and a low of 1.6273. Yesterday, the British Pound traded 0.21% lower versus the Dollar in the New York session, and closed at 1.6305.
The pair is expected to find its first support at 1.6270 and first resistance at 1.6381.
USD JPY
The USD is trading at 101.28 against the JPY at 10:40 GMT this morning, 0.27% higher from the New York close. The BoJ Governor indicated that the Japanese economy was progressing towards the central bank’s 2% inflation target and that by second half of 2014 it could achieve the target. During the session, the pair traded at a high of 101.51 and a low of 100.89. In the New York session yesterday, the USD traded 0.95% lower against the JPY, and closed at 101.01.
The pair is expected to find its first support at 100.64 and first resistance at 102.04.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9039 against the Swiss Franc, 0.33% higher from the New York close. In today’s market action, investors would track global macroeconomic data in determining the trend in the pair. During the session, the pair traded at a high of 0.9051 and a low of 0.9012. In the New York session yesterday, the USD traded 0.51% lower against the CHF, and closed at 0.9009.
The pair is expected to find its first support at 0.9008 and first resistance at 0.9066.
USD CAD
At 10:40 GMT, the USD is trading at 1.1117 against the CAD, tad lower from the New York close. During the session, the pair traded at a high of 1.1125 and a low of 1.1069. Yesterday, the USD traded 0.41% higher against the CAD in the New York session, and closed at 1.1118. In a key development, the International Monetary Fund (IMF) projected that Canada might drop its plan of eliminating budget deficit by 2015, should economic growth remain sluggish. The agency also predicted that the Canadian economy would grow 2.25% in 2014, accelerating from an estimated 1.75% in 2013.
The pair is expected to find its first support at 1.1063 and first resistance at 1.1148.
AUD USD
The AUD is trading at 0.8880 against the USD, at 10:40 GMT this morning, 1.46% higher from the New York close, as investors cheered the RBA’s decision to keep its interest rate unchanged at 2.5%. Adding to positive sentiment were comments from RBA Governor, Glenn Stevens, who stated that the central bank’s current monetary policy is appropriate to foster sustainable growth in the economy and that it might not introduce further rate cuts in the near future. During the session, the pair traded at a high of 0.8916 and a low of 0.8729. AUD traded 0.50% lower against the USD in the New York session, and closed at 0.8752.
The pair is expected to find its first support at 0.8767 and first resistance at 0.8954.
Gold
At 10:40 GMT, Gold is trading at $1254.27 per ounce, 0.26% lower from the New York close. This morning, Gold traded at a high of $1261.15 and a low of $1252.45 per ounce. In the New York session yesterday, the yellow metal traded 0.75% higher, and closed at $1257.50, amid a broad weakness in the US Dollar. Positive sentiment for the precious metal was also fuelled after the Indian government slashed its import tariff on gold and silver.
Gold has its first support at $1243.56 and first resistance at $1265.70.
Silver
Silver is trading at $19.35 per ounce, 0.07% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $19.50 and a low of $19.32. Silver traded 0.20% higher against the USD in the New York session, and closed at $19.34, as a weakness in the US Dollar and a cut in the Indian import tariff of gold and silver bolstered the demand outlook of the commodity.
Silver has its first support at $19.15 and first resistance at $19.60.
Crude Oil
At 10:40 GMT, Oil is trading at $96.56 per barrel, 0.10% lower from the New York close. This morning, Oil traded at a high of $96.94 and a low of $96.43. Yesterday, Oil traded 0.96% lower in the New York session, and closed at $96.64, as the latest batch of weak manufacturing data from the US and China weighed on the global demand-outlook of the commodity.
It has its first support at $95.90 and first resistance at $97.58.
Economic Snapshot
UK construction PMI unexpectedly advanced in January
The construction purchasing managers’ index (PMI) in the UK rose to a reading of 64.6 in January, defying market expectation for a drop to 61.5, from previous month’s reading of 62.1.
Euro-zone’s producer price index fell less than market expectations in December
On an annual basis, producer price index in the Euro-zone fell 0.8% in December, less than market expectations for a fall to 0.9% and following a 1.2% fall in the previous month. On a monthly basis, the Euro-zone’s producer price index rose 0.2% in December, compared to a 0.1% fall recorded in the previous month.
Italian consumer prices rose at a similar pace in January
On a monthly basis, the preliminary Consumer Price Index (CPI) in Italy rose 0.2% in January, compared to a similar rise in the previous month and in line with market expectations. Meanwhile, on an annual basis, the preliminary CPI gained 0.7% in January, following a similar rise in the previous month. Annual CPI according to EU norm rose 0.6% in January, against a rise of 0.7%, recorded in the previous month.
Spain unemployment climbed in January
Unemployment in Spain climbed to a level of 113,100 in January, following a market expectation of a level of 100,000 and against a decline of 107,600 reported in the preceding month.
BoJ to attain inflation target in latter half of 2014
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, opined that Japan is making steady progress towards meeting its 2% inflation target and will achieve it in the second half of 2014 through early 2015.
RBA maintained its key interest rate steady
The Reserve Bank of Australia (RBA) kept its key interest rate unchanged at 2.5%, in line with market expectations. Additionally, the RBA Governor, Glenn Stevens, indicated that interest rates could remain at the current levels in the near future, given the improving domestic and global economic prospects.
Happy pips.
