Forex Market Update
This morning, the greenback is trading lower against most of the major currencies.
Yesterday, the St. Louis Fed President, James Bullard stated that Fed would be very cautious in altering the tapering pace of its stimulus measure and any change in the course of the taper would give strong signals to the markets. He further opined that the recent batch of lackluster economic US releases would not have any impact on the Fed decision to taper its stimulus.
The Euro is trading higher this morning. Earlier today, the ECB’s monthly report reiterated its forward guidance on keeping interest rates at present or lower levels for an extended period of time and further highlighted that the inflation in the region remained subdued.
Yesterday, the Euro-bloc’s common currency faced resistance following ECB member, Benoit Coeure’s comments that the central bank might consider a negative interest rate in the region to support the fragile recovery of the economy.
In a noteworthy development, the Italian government successfully auctioned its 3-year bond at a record low yield of 1.41%, compared to a 1.51% yield recorded in January 2013.
The Australian Dollar is trading lower against its US counterpart after unemployment in the nation unexpectedly rose to the highest level in more than 10 years and after the IMF stated that the Aussie is overvalued at present.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3673 against the USD, 0.58% higher from the New York close. The greenback came under pressure amid concerns that today’s retail sales report may prove to be a disappointment. The ECB, in its monthly report, emphasized that it would continue with its forward guidance on keeping interest rates at current or lower level for a prolonged period of time in the Euro-zone. During the session, the pair traded at a high of 1.3687 and a low of 1.3589. Yesterday, the EUR traded 0.13% higher against the USD in the New York session, and closed at 1.3594.
The pair is expected to find its first support at 1.3594 and first resistance at 1.3720.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6646 against the USD, 0.30% higher from the New York close, despite a slide in the RICS
York session, and closed at 1.6597, after the BoE’s upbeat growth-forecast on the Britain economy.
York session, and closed at 1.6597, after the BoE’s upbeat growth-forecast on the Britain economy.
The pair is expected to find its first support at 1.6541 and first resistance at 1.6703.
USD JPY
The USD is trading at 101.95 against the JPY at 10:40 GMT this morning, 0.58% lower from the New York close. On the economic front, data from Japan showed that the nation’s domestic corporate goods price index eased in January. During the session, the pair traded at a high of 102.58 and a low of 101.95. In the New York session yesterday, the USD traded 0.25% higher against the JPY, and closed at 102.54.
The pair is expected to find its first support at 101.66 and first resistance at 102.44.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8934 against the Swiss Franc, 0.79% lower from the New York close. Early morning, the Federal Statistical Office reported that, on a monthly basis, producer and import prices in Switzerland stood unchanged in January. During the session, the pair traded at a high of 0.9011 and a low of 0.8936. In the New York session yesterday, the USD traded 0.16% lower against the CHF, and closed at 0.9005.
The pair is expected to find its first support at 0.8892 and first resistance at 0.9007.
USD CAD
At 10:40 GMT, the USD is trading at 1.0985 against the CAD, 0.17% lower from the New York close, ahead of Canada’s new housing price index data. During the session, the pair traded at a high of 1.1019 and a low of 1.0981. Yesterday, the USD traded marginally lower against the CAD in the New York session, and closed at 1.1004. Canadian Finance Minister, Jim Flaherty, hinted towards more stimulus measures if disinflation refuses to budge in the economy.
The pair is expected to find its first support at 1.0966 and first resistance at 1.1011.
AUD USD
The AUD is trading at 0.8966 against the USD, at 10:40 GMT this morning, 0.64% lower from the New York close, after data showed that unemployment in Australia unexpectedly jumped to 6.0% in January and following IMF’s downbeat assessment of the Aussie. During the session, the pair traded at a high of 0.9033 and a low of 0.8934. AUD traded 0.12% lower against the USD in the New York session, and closed at 0.9024.
The pair is expected to find its first support at 0.8909 and first resistance at 0.9039.
Gold
At 10:40 GMT, Gold is trading at $1290.64 per ounce, 0.07% lower from the New York close, ahead of US retail sales data. This morning, Gold traded at a high of $1293.29 and a low of $1286.35 per ounce. In the New York session yesterday, the yellow metal traded slightly higher, and closed at $1291.58.
Gold has its first support at $1285.89 and first resistance at $1295.86.
Silver
Silver is trading at $20.22 per ounce, 0.14% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.33 and a low of $20.15. Silver traded 0.21% lower against the USD in the New York session, and closed at $20.25.
Silver has its first support at $20.10 and first resistance at $20.37.
Crude Oil
At 10:40 GMT, Oil is trading at $99.66 per barrel, 0.60% lower from the New York close. This morning, Oil traded at a high of $100.37 and a low of $99.40. Yesterday, Oil traded 0.20% lower in the New York session, and closed at $100.29, after the Energy Information Administration (EIA) reported a rise of 3.3 million barrels in the US weekly stockpiles, last week.
It has its first support at $98.91 and first resistance at $100.89.
Economic Snapshot
UK RICS house price balance fell unexpectedly in January
The RICS house price balance in the UK dropped to a level of 53.0% in January, following an increase of 56.0% recorded in the preceding month. Markets were expecting house price balance to rise to 58.0% in January.
ECB reiterated forward guidance on interest rates
The European Central Bank (ECB), in its monthly report for February, reiterated its forward guidance on keeping interest rates at present or lower levels for an extended period of time. The central bank, however, stated that it would maintain its monetary accommodation and might take further decisive action if required.
German harmonized consumer price index declined in line with preliminary estimate in January
On an annual basis, final harmonized consumer price (HICP) index in Germany increased 1.2% in January, compared to a similar rise in the previous month. Similarly, on an annual basis, final consumer price index in Germany rose 1.3% in January, following a 1.4% rise in prior month.
Swiss producer and import prices remained flat in January
On a monthly basis, producer and import prices in Switzerland remained flat in January, compared to the previous month. Markets were expecting producer and import prices to drop 0.1% in January.
US Senate approved debt ceiling hike
The US Senate approved a House-passed bill by a vote of 55 to 43 with no conditions or amendments attached to extend the government’s borrowing limit through March 2015 after a prolonged preliminary vote. The bill now awaits President Barack Obama’s signature.
Australia consumer inflation expectation remained unchanged in February
Consumer inflation expectations in Australia remained unchanged at 2.3% in February, compared to the previous month.
Australia’s unemployment rate rose more than expected in January
The Australian Bureau of Statistics has reported that on a seasonally adjusted basis, unemployment rate in Australia rose to 6.0% in January, more than market expectations and compared to a rate of 5.8% reported in the previous month. Meanwhile, seasonally adjusted number of people employed in Australia fell by 3.7K in January, compared to a revised fall of 23.0K in the previous month. Seasonally adjusted full time employment in Australia declined by 7.1K in January, compared to a revised drop of 32.1K employees recorded in the previous month.
Happy pips.
