Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies. Yesterday, the greenback traded mostly lower against the key currencies, as traders refrained from taking major bets in a holiday-thin trading session.
The Euro pared some of its
The UK Pound is trading lower against its US counterpart, after UK’s inflation rate fell below the BoE’s 2% target for the first time in more than four years. On Monday, the Bank of England’s (BoE) David Miles opined that the UK economy would expand more than the BoE’s projections and interest rates in the nation could rise above its current low level in future.
Earlier today, the Bank of Japan (BoJ), in its February policy meeting, refrained from altering its monetary stance and reiterated its upbeat growth outlook on the Japanese economy. The central bank also expanded its lending programs in order to support the economy’s recovery.
The minutes from the RBA’s February meeting indicated “a period of stability in interest rate” and highlighted policymakers’ upbeat view on growth-outlook of the Australian economy.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3725 against the USD, 0.13% higher from the New York close. In economic news, the ZEW survey showed that economic sentiment in the Euro-zone and Germany unexpectedly declined in February. During the session, the pair traded at a high of 1.3728 and a low of 1.3698. Yesterday, the EUR traded marginally higher against the USD in the New York session, and closed at 1.3707. ECB’s Ewald Nowotny indicated that the central bank would keep its interest rate at present or lower level “as long as” inflation does not rise above its 2% target.
The pair is expected to find its first support at 1.3701 and first resistance at 1.3738.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6695 against the USD, 0.11% lower from the New York close, after UK’s consumer inflation index fell for the first time since November 2009 in January. During the session, the pair traded at a high of 1.6743 and a low of 1.6668. Yesterday, the British Pound traded 0.07% lower versus the Dollar in the New York session, and closed at 1.6714. BoE’s David Miles hinted that current low level of interest rate would not persist for a very long time and further indicated that growth in the nation may speed up more than the BoE’s growth-projection.
The pair is expected to find its first support at 1.6651 and first resistance at 1.6744.
USD JPY
The USD is trading at 102.44 against the JPY at 10:40 GMT this morning, 0.52% higher from the New York close. The JPY came under pressure after the BoJ policymakers, in its monetary policy meeting, enhanced its lending programs and agreed to keep its accommodative policy measure in place. During the session, the pair traded at a high of 102.76 and a low of 101.93. In the New York session yesterday, the USD traded slightly lower against the JPY, and closed at 101.91.
The pair is expected to find its first support at 101.88 and first resistance at 102.88.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8902 against the Swiss Franc, 0.15% lower from the New York close. During the session, the pair traded at a high of 0.8930 and a low of 0.8908. In the New York session yesterday, the USD traded 0.06% lower against the CHF, and closed at 0.8915.
The pair is expected to find its first support at 0.8892 and first resistance at 0.8921.
USD CAD
At 10:40 GMT, the USD is trading at 1.0957 against the CAD, 0.06% lower from the New York close. During the session, the pair traded at a high of 1.0978 and a low of 1.0952. Yesterday, the USD traded marginally lower against the CAD in the New York session, and closed at 1.0964.
The pair is expected to find its first support at 1.0943 and first resistance at 1.0975.
AUD USD
The AUD is trading at 0.9014 against the USD, at 10:40 GMT this morning, 0.21% lower from the New York close. On the economic front, the RBA’s latest policy meeting hinted at “a period of stability in interest rates” and also revealed that the central bank had done “as much as” it can to revive the economy with expectations of economic growth to pick-up by mid-2016. During the session, the pair traded at a high of 0.9083 and a low of 0.9007. AUD traded tad lower against the USD in the New York session, and closed at 0.9033.
The pair is expected to find its first support at 0.8982 and first resistance at 0.9065.
Gold
At 10:40 GMT, Gold is trading at $1314.90 per ounce, 1.05% lower from the New York close after huge outflows from physically backed investment funds more than offset record consumer demand and weighed on the global gold demand which fell 15% in 2013. This morning, Gold traded at a high of $1332.45 and a low of $1312.76 per ounce. In the New York session yesterday, the yellow metal traded 0.11% higher, and closed at $1328.88, as a weaker US Dollar bolstered the demand-outlook of the commodity.
Gold has its first support at $1307.62 and first resistance at $1327.31.
Silver
Silver is trading at $21.42 per ounce, 1.84% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.90 and a low of $21.34. Silver traded 0.42% higher against the USD in the New York session, and closed at $21.82, taking cues from a gain in the prices of precious metals.
Silver has its first support at $21.19 and first resistance at $21.79.
Crude Oil
At 10:40 GMT, Oil is trading at $100.94 per barrel, 0.10% higher from the New York close. This morning, Oil traded at a high of $101.02 and a low of $100.57. Yesterday, Oil traded marginally higher in the New York session, and closed at $100.85, amid speculation that an extreme cold weather in the US would spur demand for heating fuels.
It has its first support at $100.67 and first resistance at $101.12.
Economic Snapshot
UK annual inflation rate falls below 2% threshold in January
On an annual basis, consumer price index in the UK rose 1.9% in January, compared to a 2.0% rise recorded in the previous month. On an annual basis, the core consumer price index in the UK advanced 1.6% in January, compared to a 1.7% rise reported in the previous month.
UK retail price index rose more than expected in January
On an annual basis, retail price index in UK rose 2.8% in January, compared to a 2.7% increase recorded in the previous month. Markets were expecting the retail price index to rise 2.7% in January.
Euro-zone current account surplus widened unexpectedly in December
On a non-seasonally adjusted basis, current account surplus of the Euro-zone widened to €33.2 billion in December, following a revised surplus of €27.2 billion recorded in the previous month. Market had expected the Euro-zone’s current account surplus to narrow to €20.0 billion in December.
Euro-zone economic sentiment fell unexpectedly in February, indicates ZEW
The ZEW survey - economic sentiment in the Euro-zone declined to a level of 68.5 in February, against the market expectation of a level of 73.9 and compared to a reading of 73.3 reported in the previous month.
German economic sentiment declined more than expected in January, indicates ZEW
The ZEW survey - economic sentiment index in Germany fell to a level of 55.7 in February, more than market expectation of a level of 61.5 and compared to a reading of 61.7 reported in the previous month. Meanwhile, ZEW survey - current situation index in Germany climbed to a level of 50.0 in February, higher than market expectations of a level of 44.0 and compared to a reading of 41.2 reported in the previous month.
Italian trade surplus narrowed in December
Italy posted a trade surplus of €0.2 billion in December, lower than revised surplus of €0.7 billion recorded in the previous month. The global trade surplus of Italy widened to €3.6 billion in December, from revised surplus of €3.1 billion recorded in the previous month. Market had expected Italy’s global trade surplus to narrow to €2.8 billion in December.
BoJ kept its monetary policy unchanged
The Bank of Japan (BoJ) left its benchmark interest rate unchanged at 0.10%, in line with market expectations and maintained its asset purchase program. The central bank also kept its inflation outlook unchanged while reiterating that the nation's economy continued to recover at a moderate pace and “inflation expectations appear to be rising on the whole.”
Japan's economy is on track for recovery, indicated BoJ’s Haruhiko Kuroda
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, in a news conference, indicated that Japan's economy was moving in line with the central bank's forecasts, hinting that no imminent expansion of monetary policy was necessary.
RBA minutes hinted at stable interest rate regime
The minutes of the Reserve Bank of Australia’s (RBA) monetary policy meeting held on 4 February revealed that interest rates in the nation are likely to remain stable in the near term if the economy continues to improve. However, the RBA also stated that the economic expansion will be subdued through 2014 and will pick-up pace only by mid-2016.
China’s foreign direct investment rose at a faster pace in January
On a year to date basis, FDI in China rose 16.1% for the first month of 2014, faster compared to a 5.3% rise reported for the January to December 2013 period.
Happy pips.
