Forex Market Update
This morning, the greenback is trading lower against most of the major currencies, amid fears that tomorrow’s US retail report would reveal sluggish growth.
The greenback traded higher in the New York session yesterday, against the key currencies, after the Fed Chief, Janet Yellen’s indicated that the Fed would continue with its course of tapering its bond-purchase program at current pace.
Euro is trading a tad higher this morning. Yesterday, an ECB member stated that a likely worsening of Euro region’s inflation outlook may warrant negative interest rates.
The UK Pound is trading higher today. The Bank of England (BoE), in its quarterly inflation report, projected a fall in its unemployment rate to 7.0% through January. The central bank further raised the nation’s growth forecasts and lowered inflation projections. Meanwhile, the BoE Governor, Mark Carney, opined that recovery in Britain was gaining momentum, assuring that the forward guidance adopted by the BoE was working. He further added that the central bank would raise interest rates gradually, only after the central bank is satisfied with the performance of the various growth indicators.
Earlier today, the Bank of Japan (BoJ) Board Member, Takahide Kiuchi and the IMF opined that, at present, Japan was in no need of any additional stimulus measures. However, the BoJ Governor, Haruhiko Kuroda indicated that the central bank would not hesitate to make adjustments to its stimulus measure if upside or downside risks to the economy and prices appear.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3643 against the USD, marginally higher from the New York close, ahead of the ECB President, Mario Draghi’s speech. During the session, the pair traded at a high of 1.3653 and a low of 1.3628. Yesterday, the EUR traded 0.28% lower against the USD in the New York session, and closed at 1.3638. ECB Governing Council member, Erkki Liikanen, raised the prospect of negative interest rates in the Euro-zone, in case the region’s inflation outlook deteriorates.
The pair is expected to find its first support at 1.3619 and first resistance at 1.3674.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6513 against the USD, 0.38% higher from the New York close, after the BoE, in its quarterly inflation report, raised its growth forecast for the Britain economy and hinted at the prospect of a hike in interest rate next year. During the session, the pair traded at a high of 1.6542 and a low of 1.6437. Yesterday, the British Pound traded 0.07% lower versus the Dollar in the New York session, and closed at 1.6451.
The pair is expected to find its first support at 1.6441 and first resistance at 1.6564.
USD JPY
The USD is trading at 102.40 against the JPY at 10:40 GMT this morning, 0.21% lower from the New York close. Even though BoJ’s Takahide Kiuchi and IMF opposed additional stimulus measures for the nation’s economy, Governor Haruhiko Kuroda stated that the central bank would not hesitate to make adjustments to its stimulus measure if risks arises. During the session, the pair traded at a high of 102.70 and a low of 102.41. In the New York session yesterday, the USD traded 0.22% higher against the JPY, and closed at 102.62.
The pair is expected to find its first support at 102.13 and first resistance at 102.70.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8973 against the Swiss Franc, 0.13% lower from the New York close. In economic news, data showed that consumer prices on an annual basis in Switzerland inched up for a third consecutive month in January. During the session, the pair traded at a high of 0.8990 and a low of 0.8974. In the New York session yesterday, the USD traded 0.41% higher against the CHF, and closed at 0.8985.
The pair is expected to find its first support at 0.8947 and first resistance at 0.8995.
USD CAD
At 10:40 GMT, the USD is trading at 1.0979 against the CAD, 0.28% lower from the New York close. During the session, the pair traded at a high of 1.1027 and a low of 1.0981. Yesterday, the USD traded 0.28% lower against the CAD in the New York session, and closed at 1.1010.
The pair is expected to find its first support at 1.0944 and first resistance at 1.1043.
AUD USD
The AUD is trading at 0.9051 against the USD, at 10:40 GMT this morning, 0.20% higher from the New York close, following a wider-than-expected trade surplus in China, Australia’s largest trading partner, in January. On the economic front, the Westpac consumer confidence index in Australia fell to its lowest level in seven months in February. During the session, the pair traded at a high of 0.9069 and a low of 0.9015. AUD traded flat against the USD in the New York session, and closed at 0.9033.
The pair is expected to find its first support at 0.9009 and first resistance at 0.9081.
Gold
At 10:40 GMT, Gold is trading at $1286.98 per ounce, 0.33% lower from the New York close. This morning, Gold traded at a high of $1291.91 and a low of $1284.15 per ounce. In the New York session yesterday, gold traded 0.28% higher, and closed at $1291.20, as Fed Chief Janet Yellen’s cautious comments about the recovery in the US labor market increased the safe haven appeal of the yellow metal.
Gold has its first support at $1277.56 and first resistance at $1295.17.
Silver
Silver is trading at $20.20 per ounce, 0.17% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.28 and a low of $20.10. Silver traded marginally lower against the USD in the New York session, and closed at $20.24, amid a decline in the prices of industrial metals.
Silver has its first support at $19.99 and first resistance at $20.36.
Crude Oil
At 10:40 GMT, Oil is trading at $100.57 per barrel, 0.10% higher from the New York close. This morning, Oil traded at a high of $100.69 and a low of $99.94. Yesterday, Oil traded 0.23% higher in the New York session, and closed at $100.42. The Energy Information Administration (EIA) slashed its projection on the US crude oil production for 2014 and 2015 by 100,000 barrels per day. Additionally, the API reported that crude supplies last week rose less than expected.
It has its first support at $99.88 and first resistance at $100.97.
Economic Snapshot
UK CB leading economic index fell in December
The CB leading economic index in the UK dropped 0.1% to a level of 108.2 in December, after recording an increase of 0.5% in the previous month.
BoE lifted UK’s 2014 growth forecast
The Bank of England, in its latest inflation report, forecasted the UK’s economy to expand by 3.4% in 2014, above its previous projection for a 2.8% expansion. Furthermore, the central bank indicated that the unemployment rate in the UK has fallen much faster than anticipated and the 7% threshold is likely to be reached by the spring of this year. The BoE governor, Mark Carney, renewed his pledge to keep interest rates at a record low and stated that the interest rates will stay record low until 2015.
Euro-zone industrial production declined more than anticipated in December
On a monthly basis, industrial production in the Euro-zone eased 0.7% in December, compared to a revised rise of 1.6% recorded in the previous month. Markets had expected industrial production to fall 0.3% in December.
France current account deficit narrowed in December
Current account deficit in France narrowed to €1.2 billion in December, following a deficit of €1.9 billion recorded in the previous month.
Swiss harmonised consumer price index fell more than expected in January
On an annual basis, the EU harmonised consumer price inflation in Switzerland eased 0.2% in January, compared to a 0.3% rate recorded in the previous month. Meanwhile, on an annual basis, the consumer price index in Switzerland rose 0.1% in January, compared to a similar rise reported in the previous month.
US House voted to raise the debt ceiling until March 2015
The House of Representatives voted to raise the government’s borrowing limit until March 2015, without any conditions and now the bill is headed to the Democratic led Senate where it is expected to pass without any conditions attached.
Japanese machine tool orders rose in January
On an annual basis, preliminary machine tool orders in Japan rose 39.6% in January, compared to a 28.1% increase recorded in the previous month.
China’s trade surplus surprisingly widened in January
Trade surplus of China widened to $31.86 billion in January, from a surplus of $25.64 billion recorded in the previous month. Markets had expected China’s trade surplus to narrow to $23.45 billion in January. On an annual basis, imports in China rose 10.0% in January, following a rise of 8.3% recorded in the preceding month, while exports in China climbed 10.6% in January, following an increase of 4.3% recorded in the preceding month.
Happy pips.
