Forex Market Update
This morning, the greenback is trading lower against most of the major currencies amid concerns over today’s reports of industrial output and Reuters/Michigan consumer sentiment.
Yesterday, the US dollar declined against major counterparts in the New York session, as an unexpected fall in the US retail sales data for January and a surprise rise in the weekly US jobless claims during the previous week, spurred fresh concerns on the growth prospect of the US economy.
The Euro is trading higher against the US Dollar, as growth in the Euro-zone economy expanded at a faster pace than expected in the fourth quarter. Additionally, France and Germany, both reported a better than expected economic growth in the fourth quarter, raising hopes of a broader recovery in the region.
The UK Pound today extended its yesterday’s gains arising from BoE Chief Economist, Spencer Dale’s comments about 2015 interest rate hike as UK construction output expanded during the fourth quarter.
Earlier today, in Australia, the Reserve Bank of Australia Assistant Governor, Christopher Kent, welcomed a further depreciation in the Australian Dollar, suggesting that such a scenario would add a little to inflation. Furthermore, he opined that a weaker Aussie could prove beneficial for the economic growth of the nation. Meanwhile, today’s upbeat inflation report from China veered the positive market sentiment towards the Aussie.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3694 against the USD, 0.11% higher from the New York close, as traders cheered better-than-expected fourth-quarter GDP data from the Euro-zone as well as Germany and France. During the session, the pair traded at a high of 1.3714 and a low of 1.3677. Yesterday, the EUR traded 0.07% higher against the USD in the New York session, and closed at 1.3679.
The pair is expected to find its first support at 1.3662 and first resistance at 1.3720.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6702 against the USD, 0.26% higher from the New York close, and hovered near its strongest level since May 2011, as UK construction output increased 0.2% QoQ in the fourth quarter. During the session, the pair traded at a high of 1.6717 and a low of 1.6649. Yesterday, the British Pound finished 0.10% higher versus the Dollar in the New York session, and closed at 1.6658, after the BoE Chief Economist, Spencer Dale, hinted that investors’ bets for an interest-rate hike in the UK economy within two years were reasonable.
The pair is expected to find its first support at 1.6644 and first resistance at 1.6739.
USD JPY
The USD is trading at 101.85 against the JPY at 10:40 GMT this morning, 0.33% lower from the New York close, as investors speculated that US industrial output growth would slow and consumer sentiment would come under pressure. During the session, the pair traded at a high of 102.42 and a low of 101.66. In the New York session yesterday, the USD traded 0.16% higher against the JPY, and closed at 102.19.
The pair is expected to find its first support at 101.47 and first resistance at 102.33.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8928 against the Swiss Franc, 0.06% lower from the New York close. During the session, the pair traded at a high of 0.8942 and a low of 0.8914. In the New York session yesterday, the USD traded marginally lower against the CHF, and closed at 0.8933, hurt by a lackluster US retail sales and weekly jobless claims data.
The pair is expected to find its first support at 0.8904 and first resistance at 0.8952.
USD CAD
At 10:40 GMT, the USD is trading at 1.0951 against the CAD, 0.28% lower from the New York close. During the session, the pair traded at a high of 1.0984 and a low of 1.0950. Yesterday, the USD traded 0.08% lower against the CAD in the New York session, and closed at 1.0982. On the economic front, data from Canada showed that new housing price index rose 0.1%, on a monthly basis in December.
The pair is expected to find its first support at 1.0921 and first resistance at 1.1005.
AUD USD
The AUD is trading at 0.9026 against the USD, at 10:40 GMT this morning, 0.61% higher from the New York close. Earlier today, the RBA Assistant Governor, Christopher Kent acknowledged the recent fall in the Aussie and opined that a further deprecation in the local currency would assist the nation’s economic growth. During the session, the pair traded at a high of 0.9045 and a low of 0.8973. AUD traded 0.07% higher against the USD in the New York session, and closed at 0.8971.
The pair is expected to find its first support at 0.8968 and first resistance at 0.9065.
Gold
At 10:40 GMT, Gold is trading at $1310.97 per ounce, 0.65% higher from the New York close. This morning, Gold traded at a high of $1312.65 and a low of $1300.00 per ounce. In the New York session yesterday, the yellow metal traded 0.80% higher, and closed at $1302.50, as investors favored the safe-haven metal amid the latest batch of downbeat US economic data.
Gold has its first support at $1296.56 and first resistance at $1319.01.
Silver
Silver is trading at $20.94 per ounce, 2.19% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.96 and a low of $20.46. Silver traded 1.09% higher against the USD in the New York session, and closed at $20.50, amid a weaker US Dollar.
Silver has its first support at $20.45 and first resistance at $21.20.
Crude Oil
At 10:40 GMT, Oil is trading at $99.90 per barrel, 0.50% lower from the New York close. This morning, Oil traded at a high of $100.47 and a low of $99.78. Yesterday, Oil traded 0.55% higher in the New York session, and closed at $100.36, as a winter storm in the US bolstered the demand prospect of the commodity while a social unrest in Libya weighed on the supply outlook of the commodity.
It has its first support at $99.37 and first resistance at $100.55.
Economic Snapshot
UK construction output rose less than market expectations in December
On an annual basis, construction output in the UK rose 6.3% in December, following a downwardly revised rise of 2.0% recorded in the preceding month. Markets were expecting construction output to rise 6.4% in December.
Euro-zone trade surplus narrowed more than expected in December
On a non-seasonally adjusted basis, Euro-zone trade surplus narrowed to €13.9 billion in December from a revised surplus of €17.0 billion recorded in the previous month. Market had expected the Euro-zone’s trade surplus to narrow to €14.5 billion in December.
Euro-zone economy expanded more than anticipated in Q4 2013
On a seasonally adjusted quarterly basis, the preliminary GDP in the Euro-zone rose 0.3% in Q4 2013, higher than the market estimate of 0.2% rise and compared to a final estimate of growth of 0.1% recorded in the third quarter of 2013. Meanwhile, on a seasonally adjusted annual basis the GDP rose by 0.5% in Q4 2013, compared to a revised decline of 0.3% recorded in the third quarter of 2013.
German economy expanded more than expectations in the fourth quarter of 2013
On a seasonally adjusted quarterly basis, Germany’s GDP rose 0.4% in the Q4 2013, more than market estimates of 0.3% rise and compared to a 0.3% rise reported in the preceding quarter. On a non-seasonally adjusted annual basis, German economy grew 1.3% in the Q4 2013, more than the 1.1% increase recorded in the Q3 2013. On an annual working day adjusted basis, German GDP increased 1.4% in the Q4 2013, compared to a 0.6% rise reported in the previous quarter.
France GDP rises more than expected in Q4 2013
On a quarterly basis, French GDP advanced 0.3% in the fourth quarter of 2013, compared to a revised flat growth in the previous quarter. Markets had expected France’s GDP to rise 0.2% in Q4 2013. On an annual basis, the preliminary French GDP rose 0.8% in the fourth quarter of 2013, after a revised increase of 0.3% recorded in previous quarter.
Italian economy expanded in line with market forecasts in the Q4 2013
On a seasonally and calendar adjusted quarterly basis, GDP in Italy rose 0.1% in the fourth quarter of 2013, in line with market estimates and compared to a flat change reported in the previous quarter. On a seasonally and calendar adjusted annual basis, GDP in Italy dropped 0.8% in the Q4 2013, as compared to a revised fall of 1.9% recorded in the Q3 2013.
Spain CPI fell in line with market estimates in January
Spain’s final consumer price index on an annual basis rose 0.2% in January, following a 0.3% rise recorded in the previous month. Meanwhile, on an annual basis, Spain’s final harmonized consumer prices (HICP) index rose 0.3% in January, compared to similar rise recorded in the previous month.
China consumer price index rose more than market forecasts in January
Consumer price index (CPI) in China rose 2.5% in January on a yearly basis, compared to a similar rise recorded in the previous month. Markets were expecting the consumer price index to increase 2.4% in January. On a monthly basis, the consumer price index in China increased 1.0% in January, compared to a 0.3% rise reported in the previous month. Additionally, on an annual basis, producer price index in China fell 1.6% in January, compared to a 1.4% decline recorded in the previous month.
Happy pips.
