Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
Yesterday, the US Dollar declined against major counterparts, after data revealed that private-sector employment in the US rose less-than-expected in January. However the losses in the greenback were capped after the Philadelphia Fed President, Charles Plosser urged the central bank to accelerate the pace of tapering its stimulus measure, while the Atlanta Fed Chief, Dennis Lockhart hinted the possibility for the Fed’s QE tapering to continue at current pace and eventually end in 2014.
In a key development, ratings agency, Moody’s indicated that an increase in the US debt ceiling this week, could in no way deteriorate the nation’s “AAA” credit rating. Meanwhile, the Fitch Ratings opined that the timeliness of government actions could determine how it would resolve a negative outlook on the nation’s top “AAA” rating.
The EUR and the GBP are trading lower against its US counterpart this morning, ahead of the European Central Bank (ECB) and the Bank of England (BoE) monetary policy decision.
The Japanese Yen is trading tad lower against the US Dollar. Earlier during the day, the Bank of Japan (BoJ) Deputy Governor, Kikuo Iwata, stated that the Japanese economy remains on track to achieve its 2% inflation target toward the second half of 2015. He further added that the BoJ would not end its ultra-loose monetary policy unless the nation achieves its inflation target in a stable manner.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3531 against the USD, tad lower from the New York close, ahead of the European Central Bank’s (ECB) interest rate decision. Data released today morning indicated that factory orders in Germany fell unexpectedly in December. During the session, the pair traded at a high of 1.3541 and a low of 1.3518. Yesterday, the EUR traded 0.07% higher against the USD in the New York session, and closed at 1.3534.
The pair is expected to find its first support at 1.3504 and first resistance at 1.3557.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6292 against the USD, 0.11% lower from the New York close, as investors await the Bank of England’s (BoE) interest rate and asset purchase decision. Early this morning, the Halifax reported that house prices in the UK economy rose at the fastest pace in three months in January, on the back of low borrowing costs and improving consumer sentiment. During the session, the pair traded at a high of 1.6331 and a low of 1.6292. Yesterday, the British Pound traded 0.28% higher versus the Dollar in the New York session, and closed at 1.6310.
The pair is expected to find its first support at 1.6251 and first resistance at 1.6334.
USD JPY
The USD is trading at 101.53 against the JPY at 10:40 GMT this morning, marginally higher from the New York close. Earlier today, the Bank of Japan (BoJ) Deputy Governor, Kikuo Iwata stated that the central bank would not end its ultra-loose monetary policy unless the nation achieves its 2% inflation target. However, he hinted the possibility for the amount of the BoJ’s bond purchases to vary from month to month. During the session, the pair traded at a high of 101.68 and a low of 101.39. In the New York session yesterday, the USD traded 0.40% higher against the JPY, and closed at 101.49.
The pair is expected to find its first support at 100.99 and first resistance at 101.88.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9036 against the Swiss Franc, tad lower from the New York close. In economic news, an official report revealed that Swiss trade surplus narrowed more than expectations in December. Another report showed that consumer confidence in Switzerland surpassed analysts’ estimates in the fourth quarter. During the session, the pair traded at a high of 0.9052 and a low of 0.9036. In the New York session yesterday, the USD traded marginally lower against the CHF, and closed at 0.9037.
The pair is expected to find its first support at 0.9007 and first resistance at 0.9062.
USD CAD
At 10:40 GMT, the USD is trading at 1.1066 against the CAD, 0.15% lower from the New York close. Investors keenly await Canada’s trade balance and Ivey purchasing managers’ index (PMI) data for further direction in the Loonie. During the session, the pair traded at a high of 1.1085 and a low of 1.1060. Yesterday, the USD traded 0.15% higher against the CAD in the New York session, and closed at 1.1083. The Canadian Dollar lost ground, after data showed that Canadian building permits unexpectedly declined in December.
The pair is expected to find its first support at 1.1027 and first resistance at 1.1114.
AUD USD
The AUD is trading at 0.8955 against the USD, at 10:40 GMT this morning, 0.49% higher from the New York close. Earlier during the day, data revealed a strong rise in Australia’s trade surplus for December and after the nation’s retail sales advanced for the eighth consecutive month in December. During the session, the pair traded at a high of 0.8982 and a low of 0.8914. AUD traded 0.13% lower against the USD in the New York session, and closed at 0.8911.
The pair is expected to find its first support at 0.8907 and first resistance at 0.8993.
Gold
At 10:40 GMT, Gold is trading at $1259.84 per ounce, 0.14% higher from the New York close. This morning, Gold traded at a high of $1260.44 and a low of $1255.22 per ounce. In the New York session yesterday, the yellow metal traded marginally lower, and closed at $1258.02.
Gold has its first support at $1249.94 and first resistance at $1272.24.
Silver
Silver is trading at $20.10 per ounce, 1.00% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.11 and a low of $19.89. Silver traded 1.30% higher against the USD in the New York session, and closed at $19.91.
Silver has its first support at $19.70 and first resistance at $20.41.
Crude Oil
At 10:40 GMT, Oil is trading at $97.77 per barrel, 0.50% higher from the New York close. This morning, Oil traded at a high of $97.90 and a low of $97.25. Yesterday, Oil traded 0.38% lower in the New York session, and closed at $97.30. The Energy Information Administration (EIA) indicated that crude oil inventories rose by 440,000 barrels for the week ended January 31.
It has its first support at $96.99 and first resistance at $98.35.
Economic Snapshot
UK Halifax house prices advanced at a slower pace in January
On an annual basis, Halifax house prices in UK rose 7.3% for the period of three months ended January, more than market expectations, following an increase of 7.5% recorded in the preceding three months. Meanwhile, on a monthly basis, Halifax house prices in UK advanced 1.1% in January, compared to a revised 0.5% decline recorded in the previous month.
German factory orders fell unexpectedly in December
On a monthly basis, factory orders in Germany eased 0.5% in December, following an upwardly rise of 2.4% recorded in the preceding month. Markets projected the factory orders to rise 0.4% compared to the previous month. On an annual basis, factory orders in Germany climbed 6.0% in December, compared to an upwardly revised increase of 7.2% in the previous month.
Switzerland SECO consumer climate improved more than forecasts in Q4 2013
SECO consumer climate in Switzerland rose to a level of 2.0 in Q4 2013, higher than market expectation of a level of 1.0 and compared to a reading of -5.0 reported in the previous quarter.
Swiss trade surplus narrowed more than expected in December.
The trade surplus of Switzerland narrowed to CHF 0.5 billion in December, following a revised surplus of CHF 2.0 billion recorded in the previous month. Market had expected Switzerland’s trade surplus to narrow to CHF 1.0 billion in December. On a monthly basis, imports in Switzerland rose 1.2% in December, following a downwardly revised rise of 6.5% recorded in the preceding month. On a monthly basis, exports in Switzerland rose 0.9% in December, compared to a downwardly revised 3.0% increase recorded in November.
Tokyo average office vacancies in Japan rose at a slower pace in January
Average office vacancies in Tokyo in Japan advanced 7.2% in January, compared to a 7.3% rise recorded in the previous month.
Japan making steady progress to achieve 2% inflation target, indicated BoJ’s Deputy Governor Iwata
The Bank of Japan’s (BoJ) Deputy Governor, Kikuo Iwata, stated that Japan remains on track to achieve the 2% inflation target toward the second half of fiscal year 2015. He also indicated that the central bank can adopt more stimulus policies if required to meet its inflation target.
Australia NAB business confidence rose in Q4 2013
National Australia Bank’s (NAB) business confidence in Australia edged up to a level of 8.0 in Q4 2013, compared to a revised level of 5.0 reported in the previous quarter.
Australia retail sales rise at a slower pace in December
On a seasonally adjusted monthly basis, retail sales in Australia advanced 0.5% in December, in line with market expectations, compared to a 0.7% rise in the previous month. On a quarterly basis, retail sales ex-inflation in Australia rose 0.9% in Q4 2013, compared to a revised 0.8% increase recorded in the previous quarter.
Australia’s trade surplus widened in December
On a seasonally adjusted basis, trade surplus of Australia widened to A$468.0 million in December, compared to a revised surplus of A$83.0 million recorded in the previous month. Market had expected Australia to report a trade deficit of A$200.0 million in December.
Happy pips.
