Forex Market Update
This morning, the greenback is trading mostly higher against its key peers.
Yesterday, the greenback came under pressure after data revealed that trade deficit in the US widened more than market estimates in December and after the Fed Boston President, Eric Rosengren expressed concerns over the US labor market condition, suggesting the central bank to be “quite patient” in withdrawing its stimulus measures.
However, a better-than-expected jobless claims data in the US capped greenback’s losses in check. Later today, traders would focus on the US non-farm payrolls data for further guidance.
The Euro advanced against the US Dollar yesterday, after the European Central Bank (ECB) President, Mario Draghi rejected the possibility of deflation in the Euro-zone economy. His comments followed the ECB’s decision to keep its interest rate unchanged at a record-low 0.25%.
The UK Pound is trading higher this morning, after the UK trade deficit narrowed to 1-1/2 year low in December. However, gains were capped after the release of the downbeat industrial and manufacturing production.
Yesterday, the Bank of England (BoE) refrained from altering its monetary policy and kept its interest rate at 0.5% and maintained its asset-purchase program at £375 billion.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3565 against the USD, 0.20% lower from the New York close. Earlier today, a report indicated that Germany’s trade surplus declined less than market expectations in December. During the session, the pair traded at a high of 1.3595 and a low of 1.3565. Yesterday, the EUR traded 0.66% higher against the USD in the New York session, and closed at 1.3592, after the ECB President, Mario Draghi and the ECB policymaker, Christian Noyer negated the possibility of deflation in the Euro-zone.
The pair is expected to find its first support at 1.3491 and first resistance at 1.3629.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6341 against the USD, 0.10% higher from the New York close. Data released this morning indicated that trade deficit in the UK narrowed sharply in December, while the manufacturing and industrial production came in below market expectations. During the session, the pair traded at a high of 1.6360 and a low of 1.6320. Yesterday, the British Pound traded 0.18% higher versus the Dollar in the New York session, and closed at 1.6324. The BoE in its policy-meeting kept benchmark interest rate at 0.5% and maintained the size of its asset-purchase at £375 billion.
The pair is expected to find its first support at 1.6289 and first resistance at 1.6377.
USD JPY
The USD is trading at 102.15 against the JPY at 10:40 GMT this morning, marginally higher from the New York close. In economic news, leading economic index in Japan advanced to a reading of 112.1, while the coincident index rose to a reading of 111.7 in December. During the session, the pair traded at a high of 102.25 and a low of 101.99. In the New York session yesterday, the USD traded 0.63% higher against the JPY, and closed at 102.11.
The pair is expected to find its first support at 101.51 and first resistance at 102.52.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9019 against the Swiss Franc, 0.11% higher from the New York close. Data released by the Federal Statistical Office revealed that Switzerland's retail sales increased at a weaker pace in December. During the session, the pair traded at a high of 0.9023 and a low of 0.9005. In the New York session yesterday, the USD traded 0.50% lower against the CHF, and closed at 0.9009.
The pair is expected to find its first support at 0.8970 and first resistance at 0.9067.
USD CAD
At 10:40 GMT, the USD is trading at 1.1065 against the CAD, slightly lower from the New York close, ahead of Canada’s employment data. During the session, the pair traded at a high of 1.1081 and a low of 1.1062. Yesterday, the USD traded 0.06% higher against the CAD in the New York session, and closed at 1.1070. In economic news, trade deficit in Canada jumped to the highest level since November 2012 in December, while the Ivey PMI expanded at a faster rate than expected to a 3- month high in January.
The pair is expected to find its first support at 1.1034 and first resistance at 1.1110.
AUD USD
The AUD is trading at 0.8950 against the USD, at 10:40 GMT this morning, 0.08% lower from the New York close. Earlier today, the RBA upgraded its growth and inflation outlook for the Australian economy for 2014 and indicated that interest rates are likely to remain stable at current levels for an extended period of time. During the session, the pair traded at a high of 0.8975 and a low of 0.8933. AUD traded 0.06% lower against the USD in the New York session, and closed at 0.8957.
The pair is expected to find its first support at 0.8920 and first resistance at 0.8980.
Gold
At 10:40 GMT, Gold is trading at $1260.37 per ounce, 0.17% higher from the New York close, amid speculation that the return of Chinese buyers from a week-long holiday could spur demand for the yellow metal. This morning, Gold traded at a high of $1264.45 and a low of $1256.29 per ounce. In the New York session yesterday, the yellow metal traded 0.35% lower, and closed at $1258.25.
Gold has its first support at $1253.10 and first resistance at $1267.56.
Silver
Silver is trading at $19.86 per ounce, 0.59% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $19.98 and a low of $19.78. Silver traded 0.61% lower against the USD in the New York session, and closed at $19.97.
Silver has its first support at $19.69 and first resistance at $20.10.
Crude Oil
At 10:40 GMT, Oil is trading at $97.43 per barrel, 0.60% lower from the New York close. This morning, Oil traded at a high of $98.02 and a low of $97.23. Yesterday, Oil traded 0.22% lower in the New York session, and closed at $97.97.
It has its first support at $96.83 and first resistance at $98.43.
Economic Snapshot
UK manufacturing production rose less than forecast in December
On an annual basis, manufacturing production in UK rose 1.5% in December, following a revised rise of 2.2% recorded in the preceding month. Markets were expecting manufacturing production to rise 2.3% in December. On a monthly basis, manufacturing production in UK rose 0.3% in December, compared to a 0.1% revised decline in the previous month.
UK industrial production rose less than expected in December
On a monthly basis, industrial production in UK rose 0.4% in December, following a revised fall of 0.1% recorded in the preceding month. Markets were expecting industrial production to rise 0.6% in December. On an annual basis, industrial production in UK advanced 1.8% in December, compared to a 2.1% revised increase recorded in the previous month.
UK’s total trade deficit narrowed more than expected in December
UK’s total trade deficit narrowed to £1.0 billion in December, from a revised deficit of £3.6 billion recorded in the previous month. Market had expected the UK’s total trade deficit to narrow to £3.1 billion in December.
German industrial production fell unexpectedly in December
On a monthly basis, industrial production in Germany dropped 0.6% in December, compared to a revised 2.4% increase in the previous month. Markets had expected industrial production to jump 0.5% in December.
France’s budget deficit decreased in December
France’s budget deficit narrowed to €74.87 billion in December, from a deficit of €86.98 billion recorded in the previous month.
French trade deficit narrowed in December
France posted a trade deficit of €5.2 billion in December, less than a revised deficit of €5.7 billion recorded in the previous month.
Swiss foreign currency reserves rose more than expectations in January
Foreign currency reserves in Switzerland rose to CHF437.7 billion in January, from CHF435.2 billion reported in the previous month. Markets were expecting foreign currency reserves to rise to CHF435.8 billion in January.
Spain industrial output rose at a slower pace in December
On an annual basis, calendar adjusted industrial output in Spain rose 1.7% in December, following a revised increase of 2.4% recorded in the preceding month. Markets were expecting calendar adjusted industrial output to rise 2.4% in December
Swiss retail sales advanced at a slower pace in December
On an annual basis, real retail sales in Switzerland rose 2.3% in December, compared to a 4.2% increase recorded in the previous month.
Japan leading economic index advanced more than expected in December
The preliminary leading economic index in Japan rose to a reading of 112.1 in December, higher than market expectation of a level of 111.9 and compared to a revised reading of 111.0 reported in the previous month. Meanwhile, the preliminary coincident index rose to a level of 111.7 in December, higher than market expectation of a level of 111.5 and compared to a reading of 110.7 reported in the prior month.
RBA upgraded Australia’s growth and inflation forecasts
The Reserve Bank of Australia (RBA) upgraded Australia’s growth and inflation forecasts for 2014 in its quarterly monetary policy statement. The central bank further stated that interest rates are likely to remain stable in the near future citing the improved economic outlook and the weak Australian Dollar.
China services PMI declined in January
China’s HSBC services Purchasing Managers’ Index (PMI) dropped to a level of 50.7 in January, from a level of 50.9 reported in December.
Happy pips.
