Forex Market Update
This morning, the USD is trading mostly higher against most of the major currencies ahead of Janet Yellen’s speech tomorrow which is expected to offer clarity on the central bank’s view on the economic impact of winter weather.
The GBP is trading higher this morning against the USD after revised data confirmed an expansion in UK’s GDP for the fourth quarter.
The AUD continued to be under pressure following a 7 month low in prices of one of its major exports, iron ore, and the weakest level since July in Yuan, its largest trading partner’s currency.
Early morning, in Japan, the Bank of Japan (BoJ) Governor, Haruhiko Kuroda commended the central bank’s stimulus measure and opined that the Japanese economy is on track to achieve its 2% inflation target.
The USD traded mostly higher in the New York session yesterday, against the key currencies. Yesterday, the Fed Governor, Daniel Tarullo suggested the central bank to consider certain alterations in its monetary policy tools to combat risks to the nation’s financial stability.
Yesterday, the European commission, in its winter forecast, upgraded its growth-forecast on the Euro-zone economy but trimmed its inflation-outlook in the region for 2014 and 2015. Additionally, EU’s Olli Rehn warned that persistent low inflation could harm the Euro-zone’s fragile recovery.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3741 against the USD, marginally lower from the New York close. In economic news, Germany’s Gfk consumer confidence index for March rose to a level of 8.5, the highest level in seven years. During the session, the pair traded at a high of 1.3758 and a low of 1.3739. Yesterday, the EUR traded marginally lower against the USD in the New York session, and closed at 1.3745. The European Commission upgraded its growth-outlook on the Euro-zone economy for 2014 and 2015 but at the very same time slashed its 2014 and 2015 projections for inflation.
The pair is expected to find its first support at 1.3715 and first resistance at 1.3768.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6694 against the USD, 0.07% higher from the New York close, as traders cheered a confirmation of expansion in UK’s fourth-quarter GDP data. However the gains in the UK Pound were limited after two of the BoE’s policymakers, David Miles and Spencer Dale hinted that the central bank would not raise its key interest rate in the near future. During the session, the pair traded at a high of 1.6703 and a low of 1.6671. Yesterday, the British Pound traded 0.07% lower versus the Dollar in the New York session, and closed at 1.6682.
The pair is expected to find its first support at 1.6648 and first resistance at 1.6733.
USD JPY
The USD is trading at 102.37 against the JPY at 10:40 GMT this morning, 0.13% higher from the New York close. Earlier today, the BoJ Governor, Haruhiko Kuroda highlighted the positive impact of the central bank’s QE and stated that the economy is on track to achieve its 2% inflation target. Separately, the BoJ’s Koji Ishida stated that the sales tax hike in April would not hurt Japan’s economic recovery. During the session, the pair traded at a high of 102.42 and a low of 102.18. In the New York session yesterday, the USD traded slightly lower against the JPY, and closed at 102.24.
The pair is expected to find its first support at 102.11 and first resistance at 102.52.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8880 against the Swiss Franc, 0.14% higher from the New York close. On the economic front, the UBS consumption indicator in Switzerland edged down to a reading of 1.44 in January, from previous month’s level of 1.80. During the session, the pair traded at a high of 0.8884 and a low of 0.8869. In the New York session yesterday, the USD traded tad higher against the CHF, and closed at 0.8868.
The pair is expected to find its first support at 0.8858 and first resistance at 0.8897.
USD CAD
At 10:40 GMT, the USD is trading at 1.1078 against the CAD, 0.06% lower from the New York close. During the session, the pair traded at a high of 1.1098 and a low of 1.1081. Yesterday, the USD traded marginally higher against the CAD in the New York session, and closed at 1.1085.
The pair is expected to find its first support at 1.1061 and first resistance at 1.1097.
AUD USD
The AUD is trading at 0.9004 against the USD, at 10:40 GMT this morning, 0.16% lower from the New York close. Data releases overnight showed that construction work done in Australia fell against market expectations in the fourth quarter. During the session, the pair traded at a high of 0.9027 and a low of 0.8988. AUD traded 0.14% lower against the USD in the New York session, and closed at 0.9018, hurt by a decline in iron-ore prices.
The pair is expected to find its first support at 0.8967 and first resistance at 0.9041.
Gold
At 10:40 GMT, Gold is trading at $1340.35 per ounce, tad lower from the New York close. This morning, Gold traded at a high of $1345.45 and a low of $1337.83 per ounce. In the New York session yesterday, the yellow metal traded 0.38% higher, and closed at $1340.72, as a downbeat US consumer confidence data bolstered the safe-haven appeal of the metal. Adding to positive sentiment were reports that showed holdings in SPDR Gold Trust climbed for a third day yesterday, heading towards the first monthly gain since December 2012.
Gold has its first support at $1332.71 and first resistance at $1346.72.
Silver
Silver is trading at $21.91 per ounce, 0.20% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $22.06 and a low of $21.78. Silver traded 0.13% higher against the USD in the New York session, and closed at $21.87, benefited from strong demand for haven assets.
Silver has its first support at $21.71 and first resistance at $22.09.
Crude Oil
At 10:40 GMT, Oil is trading at $102.08 per barrel, flat from the New York close, ahead of the Energy Information Administration’s (EIA) weekly report on the US crude inventory. This morning, Oil traded at a high of $102.26 and a low of $101.58. Yesterday, Oil traded 0.68% higher in the New York session, and closed at $102.08, drawing support from the American Petroleum Institute’s (API) report, which showed a less-than-expected rise in the US crude supplies, last week. However, the gains were capped after a weaker Chinese Yuan fuelled concerns on the demand-outlook of the commodity.
It has its first support at $101.31 and first resistance at $102.55.
Economic Snapshot
UK economy expanded in line with the first estimate in the fourth quarter of 2013
On a quarterly basis, GDP in the UK advanced 0.7% in the Q4 2013, in line with the first estimate and compared to a 0.8% rise reported in the Q3 2013. Additionally, on an annual basis, second estimate of GDP rose 2.7% in the Q4 2013, compared to a rise of 1.9% recorded in the Q3 2013.
UK business investment rose more than market estimate in the fourth quarter of 2013
On a quarterly basis, preliminary total business investment in UK rose 2.4% in the Q4 2013, higher than market expectation for a rise of 1.3% and compared to a 2.0% rise reported in the previous quarter.
Imports in UK fell less than market estimate in Q4 2013
On a quarterly basis, imports in UK dropped 0.9% in Q4 2013, compared to a 0.7% increase recorded in the previous quarter. Markets were expecting imports to drop 1.0% in the Q4 2013. Meanwhile, on a quarterly basis, exports in UK advanced 0.4% in Q4 2013, compared to a revised fall of 2.8% posted in the previous quarter.
Gfk consumer confidence in Germany rose more than forecast for March
The Gfk consumer confidence index in Germany rose to a level of 8.5 in March, higher than market expectation of a level of 8.2 and compared to a reading of 8.3 reported in the previous month.
Italy’s wage inflation advanced in January
On an annual basis the wage inflation in Italy climbed to 1.4% in January, compared to a rate of 1.3% recorded in the previous month.
Swiss UBS consumption indicator fell in January
The UBS consumption indicator in Switzerland declined to a level of 1.44 in January, following a reading of 1.80 recorded in the previous month.
BoJ’s Ishida reiterated 2% inflation target
A board member of the Bank of Japan (BoJ), Koji Ishida, reinforced that Japan will attain its 2% stable inflation target until the end of fiscal year 2015. Ishida also stated that the nation will remain on the track of recovery even if the economy contracts after the proposed sales tax hike in April 2014.
Australia’s construction work done declined unexpectedly in Q4 2013
On a seasonally adjusted quarterly basis, construction work done in Australia fell 1.0% in Q4 2013, compared to a 3.0% rise recorded in the previous quarter. Markets were expecting construction work done to rise 0.2% in the fourth quarter of 2013.
Happy pips.
