Forex Market Update
This morning, the greenback is trading mostly higher against most of the major currencies.
The Euro is trading lower this morning, after indexes measuring the manufacturing activities in Germany, France and the Euro zone missed expectations in February, spurring fresh doubts on the recovery of the Euro-zone economy. Yesterday, the IMF suggested the ECB to consider lowering its key interest rate below 0% to support the fragile and uneven growth in the region’s economy, as it warned the possibility of deflation in the region.
Yesterday, the greenback traded mostly higher against the key currencies, after the minutes from the Federal Reserve’s (Fed) latest policy meeting, highlighted policymakers’ upbeat view on the recovery of the US economy and hinted no change towards its tapering policy in its QE measure. The USD also drew some support from hawkish comments of three leading Fed officials.
During the New York session yesterday, the Bank of England’s (BoE), Paul Fisher revealed that no policymakers in the BOE MPC “pushed” for a rake hike in the policy meeting. He further opined that a premature hike in the nation’s benchmark interest rate could prove fatal for Britain’s economic recovery.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3692 against the USD, 0.32% lower from the New York close, following the latest batch of lackluster Markit PMI data from the Euro-zone and its key member nations, Germany and France. During the session, the pair traded at a high of 1.3763 and a low of 1.3695. Yesterday, the EUR traded 0.06% lower against the USD in the New York session, and closed at 1.3736. The IMF urged the ECB to consider slashing its key interest rate to below 0% with a view to dampen deflation threats and support the fragile economic recovery in the Euro-zone.
The pair is expected to find its first support at 1.3663 and first resistance at 1.3744.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6646 against the USD, 0.22% lower from the New York close, amid concerns that a report tomorrow would reveal a drop in UK retail sales. During the session, the pair traded at a high of 1.6697 and a low of 1.6645. Yesterday, the British Pound traded 0.17% higher versus the Dollar in the New York session, and closed at 1.6682. BoE’s Paul Fisher opined that an early rise in the interest rate could hamper Britain’s economic recovery.
The pair is expected to find its first support at 1.6612 and first resistance at 1.6704.
USD JPY
The USD is trading at 102.00 against the JPY at 10:40 GMT this morning, 0.33% lower from the New York close. The Yen is trading higher against major peers amid risk aversion among traders. In economic news, Japan’s total trade merchandised deficit widened more than market expectations to a record level in January, with a surge in the nation’s imports and a less-than-expected increase in the nation’s exports. During the session, the pair traded at a high of 102.43 and a low of 101.74. In the New York session yesterday, the USD traded 0.40% higher against the JPY, and closed at 102.34.
The pair is expected to find its first support at 101.62 and first resistance at 102.43.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8914 against the Swiss Franc, 0.33% higher from the New York close. In economic news, data showed that a trade surplus in Switzerland widened more than market estimates in January, helped by a surge in the nation’s exports. During the session, the pair traded at a high of 0.8916 and a low of 0.8863. In the New York session yesterday, the USD traded tad lower against the CHF, and closed at 0.8885.
The pair is expected to find its first support at 0.8874 and first resistance at 0.8935.
USD CAD
At 10:40 GMT, the USD is trading at 1.1073 against the CAD, 0.05% lower from the New York close. During the session, the pair traded at a high of 1.1094 and a low of 1.1071. Yesterday, the USD traded 1.22% higher against the CAD in the New York session, and closed at 1.1078. The Canadian Dollar slid against its US counterpart after data showed that wholesale sales in the nation dropped around three-times more than analysts’ expectations for December.
The pair is expected to find its first support at 1.0959 and first resistance at 1.1141.
AUD USD
The AUD is trading at 0.8977 against the USD, at 10:40 GMT this morning, 0.27% lower from the New York close, after China’s HSBC manufacturing PMI slowed to a seven-month low in February. During the session, the pair traded at a high of 0.9014 and a low of 0.8943. AUD traded 0.33% lower against the USD in the New York session, and closed at 0.9001.
The pair is expected to find its first support at 0.8927 and first resistance at 0.9036.
Gold
At 10:40 GMT, Gold is trading at $1313.52 per ounce, 0.14% higher from the New York close. This morning, Gold traded at a high of $1315.99 and a low of $1308.77 per ounce. In the New York session yesterday, the yellow metal traded 0.47% lower, and closed at $1311.65, after the release of Fed’s minutes indicated that majority of the policymakers want to end the bond buying program as soon as possible and amid hawkish comments by a key Fed member.
Gold has its first support at $1307.42 and first resistance at $1320.96.
Silver
Silver is trading at $21.62 per ounce, 0.33% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.72 and a low of $21.41. Silver traded 1.00% lower against the USD in the New York session, and closed at $21.55. Late Tuesday the Silver Institute reported that the US Mint sold around 42.68 million of American eagle silver bullion coins in 2013, 26% more than what it sold in the preceding year.
Silver has its first support at $21.35 and first resistance at $21.90.
Crude Oil
At 10:40 GMT, Oil is trading at $103.19 per barrel, 0.20% lower from the New York close, after China’s manufacturing activity hit its lowest level in seven months in February. This morning, Oil traded at a high of $103.50 and a low of $102.97. Yesterday, Oil traded 0.34% higher in the New York session, and closed at $103.43. Late Wednesday, the American Petroleum Institute (API) reported that weekly US crude supplies dropped unexpectedly by 473,000 barrels for the week ended February 14.
It has its first support at $102.46 and first resistance at $103.86.
Economic Snapshot
CBI Industrial Trends Survey - Orders rose less than market expectations for February
On a month-on-month basis, the CBI industrial trends survey - orders in the UK rose to a reading of 3.0 in February, less than analysts’ expectations for a rise to a level of 5.0, from previous month’s level of -2.0.
Euro-zone manufacturing PMI fell unexpectedly in February
The Markit manufacturing Purchasing Managers’ Index (PMI) PMI in the Euro-zone fell to a reading of 53.0 in February, following a reading of 54.0 in the previous month. Markets had expected the index to remain steady at a reading of 54.0. Meanwhile, preliminary services PMI in Euro-zone rose to a reading of 51.7 in February, compared to a final reading of 51.6 reported in the previous month. However, preliminary composite PMI fell unexpectedly to a reading of 52.7 in February, from a reading of 52.9 in the previous month.
German services PMI rose more than expected in February
The Markit services PMI in Germany rose to a reading of 55.4 in February, following a reading of 53.1 in the previous month. Markets had expected the index to rise to a reading of 53.4 in February. The preliminary manufacturing PMI in Germany fell to a level of 54.7 in February, from a reading of 56.5 in the previous month.
French EU normalised consumer price index rose less than expected in January
On an annual basis, EU normalised consumer price index in France increased 0.8% in January, compared to a similar rise recorded in the previous month. Markets were expecting the EU normalised consumer price index to rise 0.9% in January.
France manufacturing PMI fell unexpectedly in February
The Markit manufacturing PMI in France dropped unexpectedly to a reading of 48.5 in February, from a reading of 49.3 in the previous month. Market had expected the index to rise to a reading of 49.5. Meanwhile, the services PMI fell unexpectedly to a level of 46.9 in February, compared to a reading of 48.9 in January.
Switzerland’s trade surplus widened in January
Switzerland’s trade surplus widened to CHF 2.59 billion in January, from a revised surplus of CHF 0.52 billion recorded in the previous month. Market had expected Switzerland’s trade surplus to narrow to CHF 0.2 billion in January.
Australia RBA foreign exchange transaction declined in January
The Reserve Bank of Australia (RBA) foreign exchange transaction dropped to A$362.0 million in January, from a level of A$884.0 million in the previous month.
China preliminary Markit manufacturing PMI declined in February
The Markit manufacturing PMI in China fell to a reading of 48.3 in February, compared to a final reading of 49.5 reported in the previous month. Market had expected the index to fall to a reading of 49.4 in February.
Happy pips.
