Forex Market Update
This morning, the greenback is trading lower against most of the major currencies.
Demand for the EUR rose after data showed that annual consumer inflation rate in the region came in above expectations, thereby removing pressure from the ECB to introduce new stimulus measures at its next week’s policy meeting in order to aid the regions fragile economic recovery.
The GBP is trading higher against its US counterpart after data showed that home prices in the UK rose at the fastest pace in four years in February while consumer confidence stood pat at the highest level since September 2007. Separately, the Bank of England (BoE) Chief Economist, Spencer Dale hinted that policymakers could face a “healthy” split on deciding the timing to raise interest.
Yesterday, the greenback traded lower in the New York session against the key currencies, as the Fed Chief, Janet Yellen opined that the recent weakness in the US economic data could be partly due to extreme cold winter in the US. Additionally, she reiterated that the Fed would continue the current pace of tapering its stimulus measure even if recovery the US labor market shows a lackluster performance.
The Japanese Yen gained ground as a safe haven amid escalating tension in Ukraine and complicated geopolitical situation on the Crimea peninsula. Meanwhile, the JPY received support after the nation’s inflation rate climbed to a 5-year high last month.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3797 against the USD, 0.63% higher from the New York close, after data showed that annual consumer inflation rate in the Euro-zone defied market expectations of a fall and stood pat at previous month’s level of 0.8%. Likewise, unemployment rate in the region also remained unchanged in January at a near-record 12%. During the session, the pair traded at a high of 1.3814 and a low of 1.3698. Yesterday, the EUR traded 0.40% higher against the USD in the New York session, and closed at 1.3711.
The pair is expected to find its first support at 1.3688 and first resistance at 1.3860.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6729 against the USD, 0.25% higher from the New York close, after a report by the UK Nationwide Building Society showed that home prices rose for a 14th straight month in February, depicting a strong recovery in the UK economy and as the GFK consumer confidence continued to stand at its best reading since September 2007. During the session, the pair traded at a high of 1.6770 and a low of 1.6681. Yesterday, the British Pound traded 0.29% higher versus the Dollar in the New York session, and closed at 1.6688.
The pair is expected to find its first support at 1.6640 and first resistance at 1.6794.
USD JPY
The USD is trading at 101.83 against the JPY at 10:40 GMT this morning, 0.35% lower from the New York close as ongoing violence in Ukraine boosted demand for the yen as a safe-haven asset. In Japan, CPI rose 1.4% (YoY) while unemployment rate remained unchanged at previous month’s level of 3.7% in January. Retail sales rose for the sixth-straight month in January and industrial production grew the most since 2011 last month. During the session, the pair traded at a high of 102.22 and a low of 101.65. In the New York session yesterday, the USD traded 0.30% higher against the JPY, and closed at 102.18.
The pair is expected to find its first support at 101.51 and first resistance at 102.19.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8816 against the Swiss Franc, 0.77% lower from the New York close. In economic news, the KOF leading indicator in Switzerland advanced to a reading of 2.03 in February, from a level of 2.01 registered in the preceding month. During the session, the pair traded at a high of 0.8891 and a low of 0.8819. In the New York session yesterday, the USD traded 0.25% lower against the CHF, and closed at 0.8884.
The pair is expected to find its first support at 0.8777 and first resistance at 0.8885.
USD CAD
At 10:40 GMT, the USD is trading at 1.1127 against the CAD, flat from the New York close. Market participants keenly await Canada’s fourth-quarter GDP data for further cues in the loonie. During the session, the pair traded at a high of 1.1136 and a low of 1.1119. Yesterday, the USD traded marginally lower against the CAD in the New York session, and closed at 1.1127. The Canadian Dollar pared its initial losses against the US Dollar after data showed that Canada’s current account deficit widened less than analysts’ expectations for the fourth quarter.
The pair is expected to find its first support at 1.1106 and first resistance at 1.1154.
AUD USD
The AUD is trading at 0.8961 against the USD, at 10:40 GMT this morning, 0.06% lower from the New York close. Data released overnight showed that private sector credit in Australia grew at a slower pace in January, compared to previous month’s growth. During the session, the pair traded at a high of 0.8992 and a low of 0.8947. AUD traded 0.41% higher against the USD in the New York session, and closed at 0.8966.
The pair is expected to find its first support at 0.8917 and first resistance at 0.8998.
Gold
At 10:40 GMT, Gold is trading at $1329.09 per ounce, 0.19% lower from the New York close. This morning, Gold traded at a high of $1334.00 and a low of $1325.35 per ounce. In the New York session yesterday, the yellow metal traded flat, and closed at $1331.58. However, earlier during the session, gold prices advanced after the Fed Chief pointed towards the recent softness in the US economic data and after violence escalated in Ukraine.
Gold has its first support at $1324.19 and first resistance at $1335.14.
Silver
Silver is trading at $21.30 per ounce, 0.07% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.35 and a low of $21.14. Silver traded 0.19% lower against the USD in the New York session, and closed at $21.28, hurt by a broad decline in the prices of industrial metals.
Silver has its first support at $21.12 and first resistance at $21.48.
Crude Oil
At 10:40 GMT, Oil is trading at $102.33 per barrel, 0.20% higher from the New York close. This morning, Oil traded at a high of $102.40 and a low of $101.87. Yesterday, Oil traded 0.37% lower in the New York session, and closed at $102.11, as retreating winter in the US and concerns on the China’s growth outlook weighed on the demand prospect of the commodity. However, a weaker US Dollar kept the commodity’s losses in check. Separately, a survey indicated that the OPEC crude production declined to the lowest level in more than two years in February, due to supply disruptions in Saudi Arabia and Libya.
It has its first support at $101.69 and first resistance at $103.02.
Economic Snapshot
UK Gfk consumer confidence remained steady in February
The GfK consumer confidence index in the UK remained unchanged at a level of -7.0 in February, compared to the previous month, in line with market expectations.
Nationwide house prices in the UK rose more than market estimate in February
On an annual basis, the non-seasonally adjusted house prices in the UK climbed 9.4% in February, higher than market estimate of a 9.0% rise and compared to an 8.8% increase recorded in the previous month.
Euro-zone CPI rose unexpectedly in February
On an annual basis, the Euro-zone’s preliminary consumer price inflation (CPI) rose 0.8% in February, compared to a similar rate in the previous month. Market had expected the annual inflation rate to fall to 0.7% in February.
Euro-zone unemployment rate remained unchanged in January
The unemployment rate in the Euro-zone remained unchanged at 12.0% in January, compared to the previous month and in line with market expectations.
German retail sales rebounded in January
On a monthly basis, real retail sales in Germany climbed 2.5% in January, more than market forecast of a rise of 1.0% and compared to a revised 2.1% fall recorded in the previous month.
France consumer spending and producer prices declined in January
On a monthly basis, consumer spending in France fell 2.1% in January, following a revised rise of 0.2% in the preceding month. Additionally, on a monthly basis, producer prices in France dropped 0.6% in January, following an increase of 0.1% recorded in the preceding month.
Italy unemployment rate rose in January
Unemployment rate in Italy climbed to 12.9% in January, compared to a rate of 12.7% recorded in the previous month. Market had expected the unemployment rate to remain steady at 12.7% in January.
Italy CPI rose less than expected in February
On a monthly basis, the preliminary Italian CPI fell 0.1% in February, compared to a 0.2% rise recorded in the previous month. Meanwhile, on a monthly basis, the preliminary EU normalised consumer price index in Italy fell 0.3% in February, compared to 2.1% fall in the preceding month.
Swiss KOF leading indicator rose more than market estimate in February
The KOF leading indicator in Switzerland rose to a level of 2.03 in February, higher than market expectation of a level of 2.00 and compared to a reading of 2.01 reported in the previous month.
Japan construction orders advanced in January
On an annual basis, construction orders in Japan increased 15.2% in January, compared to a 4.9% rise recorded in the previous month. Additionally, housing starts on an annual basis in Japan rose 12.3% in January, following an increase of 18.0% in the preceding month.
Private sector credit in Australia rose in January
On an annual basis, private sector credit in Australia rose 4.1% in January, compared to a 3.8% rise recorded in the previous month. Markets were expecting private sector credit to rise 4.1% in January.
Happy pips.
