Forex Market Update
This morning, the greenback is trading mostly higher against most of the major currencies.
Yesterday, the US Dollar rose after the Richmond Fed President indicated that the nation’s labor market has shown significant improvements in the recent past which might induce the central bank to cut the pace of its bond purchases in the future. Meanwhile, the Chicago Fed Chief voiced his concerns about the low inflationary pressures in the nation.
Data released yesterday revealed that factory orders in the US dropped in December, although the decline was less than market expectations. A separate report released by the Institute of Supply Management showed that business conditions in New York improved in January. Ahead in the day, investors’ would keep a close tab on the ADP jobs report to evaluate the health of nation’s labor market.
The Euro came under pressure after a report revealed that retail sales in the Euro-region unexpectedly fell in December. Additionally, services PMI in Germany unexpectedly declined in January. Another report showed that the Euro-zone’s service and composite purchasing managers’ index (PMI) rose less than market expectations for January. However, service PMI in Spain, Italy and France rose more than market expectation in January.
Investors also remained cautious ahead of the European Central Bank (ECB) interest rate announcement tomorrow.
The Pound is trading lower against its US counterpart after a report showed that activities in the UK service sector unexpectedly slowed in January. The Bank of England policymakers begins a monthly two-day meeting today, amid expectations that they would leave interest rates at record low of 0.5%.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3511 against the USD, slightly lower from the New York close, after a report showed a larger than expected drop in the Euro bloc’s December retail sales. Moreover, the bloc’s service and composite PMI rose, however failed to meet market expectations. Additionally, Germany service PMI fell in January. Separately, another report revealed that services PMI in Spain, Italy and France advanced in January. During the session, the pair traded at a high of 1.3529 and a low of 1.3502. Yesterday, the EUR traded tad lower against the USD in the New York session, and closed at 1.3517.
The pair is expected to find its first support at 1.3492 and first resistance at 1.3531.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6275 against the USD, 0.33% lower from the New York close, following an unexpected contraction in the UK’s service sector activities in January. During the session, the pair traded at a high of 1.6343 and a low of 1.6276. Yesterday, the British Pound traded 0.06% higher versus the Dollar in the New York session, and closed at 1.6329.
The pair is expected to find its first support at 1.6245 and first resistance at 1.6326.
USD JPY
The USD is trading at 101.18 against the JPY at 10:40 GMT this morning, 0.48% lower from the New York close. In economic news, labor cash earnings in Japan rose 0.8% (YoY) in December. During the session, the pair traded at a high of 101.78 and a low of 101.18. In the New York session yesterday, the USD traded 0.41% higher against the JPY, and closed at 101.67.
The pair is expected to find its first support at 100.93 and first resistance at 101.61.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9050 against the Swiss Franc, 0.12% higher from the New York close. In economic news, the UBS reported that its Swiss real estate bubble index advanced in the fourth quarter. During the session, the pair traded at a high of 0.9053 and a low of 0.9034. In the New York session yesterday, the USD traded marginally higher against the CHF, and closed at 0.9039.
The pair is expected to find its first support at 0.9028 and first resistance at 0.9067.
USD CAD
At 10:40 GMT, the USD is trading at 1.1054 against the CAD, 0.21% lower from the New York close. Looking ahead investors would keep a close tab on Canada’s building permits data for December. During the session, the pair traded at a high of 1.1099 and a low of 1.1056. Yesterday, the USD traded slightly lower against the CAD in the New York session, and closed at 1.1077. The Canadian Dollar gained ground against its US counterpart after oil prices rose.
The pair is expected to find its first support at 1.1027 and first resistance at 1.1100.
AUD USD
The AUD is trading at 0.8928 against the USD, at 10:40 GMT this morning, mostly unchanged from the New York close. Early morning, the AiG reported an improvement in the performance of its service index for Australia in January. Separately, the Australian Prime Minister, Tony Abbott expressed concerns on the softening economic condition of the nation and highlighted his desire to maximize jobs and pay in the economy. During the session, the pair traded at a high of 0.8941 and a low of 0.8881. AUD traded 0.35% higher against the USD in the New York session, and closed at 0.8928.
The pair is expected to find its first support at 0.8885 and first resistance at 0.8958.
Gold
At 10:40 GMT, Gold is trading at $1257.26 per ounce, 0.19% higher from the New York close. This morning, Gold traded at a high of $1258.65 and a low of $1252.74 per ounce. In the New York session yesterday, the yellow metal traded tad higher, and closed at $1254.90. However, the greenback was in demand after two eminent Fed officials hinted their support for further tapering of monetary stimulus.
Gold has its first support at $1250.01 and first resistance at $1261.58.
Silver
Silver is trading at $19.62 per ounce, 0.53% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $19.70 and a low of $19.46. Silver traded 0.56% higher against the USD in the New York session, and closed at $19.51.
Silver has its first support at $19.37 and first resistance at $19.78.
Crude Oil
At 10:40 GMT, Oil is trading at $98.10 per barrel, 0.30% higher from the New York close, ahead of the weekly inventory update from the Energy Information Administration later during the day. Late yesterday, the American Petroleum Institute (API) reported a less-than-expected 384,000 barrels rise in the US crude stockpiles for the week ended January 31. This morning, Oil traded at a high of $98.26 and a low of $97.19. Yesterday, Oil traded 1.32% higher in the New York session, and closed at $97.76, as cold weather in the US boosted demand for the commodity.
It has its first support at $96.89 and first resistance at $98.78.
Economic Snapshot
UK BRC retail sales declined in January
On an annual basis, the British Retail Consortium (BRC) like-for-like retail sales in UK fell 1.0% in January, compared to a 0.8% decline recorded in the previous month. Markets were expecting like-for-like retail sales to decrease 0.7% in January.
UK services PMI unexpectedly fell in January
The Markit services purchasing managers’ index (PMI) in UK fell to a reading of 58.3 in January, from a reading of 58.8 in the previous month. Market had expected the index to rise to a reading of 59.0 in January.
UK’s official reserves rose in January
The Bank of England (BoE) reported that the official reserves in the UK rose by $431.0 million in January, compared to a fall of $536.0 million reported in the previous month.
Euro-zone services PMI advanced less than the preliminary estimate in January
Euro-zone final Markit services PMI rose to a level of 51.6 in January, less than the preliminary estimate of 51.9 and compared to a level of 51.0 recorded in December. Meanwhile, the Euro-zone final composite PMI advanced to a level of 52.9 in January, compared to a level of 52.1 recorded in December.
Euro-zone retail sales fell more than forecast in December
On a monthly basis, retail sales in the Euro-zone declined 1.6% in December, after recording a downwardly revised rise of 0.9% in the previous month. Market had expected retail sales to drop 0.5% in December. On an annual basis, retail sales in the Euro-zone dropped 1.0% in December, compared to a downwardly revised increase of 1.3% reported in November.
German services PMI unexpectedly declined in January
Germany’s final Markit services PMI declined to a level of 53.1 in January, less than the preliminary estimate of a level of 53.6 and compared to a level of 53.5 recorded in December.
French final services PMI rose more than the preliminary estimate in January
France’s Markit services PMI rose to a level of 48.9 in January, from a level of 47.8 reported in December.
Italy services PMI advanced more than forecasts in January
Markit services PMI in Italy rose to a reading of 49.4 in January, following a reading of 47.9 in the previous month. Market had expected the index to rise to a reading of 48.6 in January.
Spanish services PMI inched up more than forecasts in January
Markit services PMI in Spain edged up to a reading of 54.9 in January, compared to a reading of 54.2 reported in the previous month. Market had expected the index to rise to a reading of 54.8 in January.
Switzerland’s UBS real estate bubble index edged up in the Q4 2013
The UBS real estate bubble index in Switzerland rose to 1.23 in Q4 2013, compared to 1.20 reported in the previous quarter.
Japan’s labor cash earnings rose in December
On an annual basis, labor cash earnings in Japan advanced 0.8% in December, compared to an upwardly revised 0.6% increase recorded in the previous month.
Happy pips.
