Forex Market Update
This morning, the USD is trading mixed against most of the major currencies.
The EUR is trading on a lower footing as investors remained cautious ahead of the ECB’s monetary policy meeting scheduled tomorrow. Meanwhile, upbeat data from the Euro-zone and after easing crisis in Ukraine, did little to change the “risk-off” sentiment existing in the market. An official data confirmed that the Euro-zone’s economy expanded in-line with market estimates for the fourth quarter while annual retail sales rebounded in January. Meanwhile, the Markit economics reported that the region’s private sector registered its busiest month in over two and a half years in February.
The AUD witnessed a strong demand after Australia’s GDP surpassed market expectations for the fourth quarter and after the performance of service index in Australia improved to the highest level in six years in February. The Aussie also benefited from a report that showed China’s HSBC service PMI in February rose to a level best seen in three months.
Yesterday, the USD traded higher in the New York session against the key currencies. The Richmond Fed President, Jeffrey Lacker hinted that the US Fed could hike its interest rate in the early 2015 while stating that the potential risks to the US economy from Ukraine crisis seem quite manageable at this point. Separately, the former Fed Chairman, Ben Bernanke, in a speech at Abu Dhabhi, opined that the probability for the US economy to register a 3% growth this year remains very high.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3718 against the USD, 0.17% lower from the New York close. On the macro economic front, Euro-zone’s Q4 GDP rose in-line with market expectations while retail sales in the region registered an upbeat rise in January. Separately, Markit Economics reported its service and composite PMI for the Euro-zone surpassed analysts’ expectations in February. During the session, the pair traded at a high of 1.3746 and a low of 1.3716. Yesterday, the EUR traded 0.12% lower against the USD in the New York session, and closed at 1.3742.
The pair is expected to find its first support at 1.3689 and first resistance at 1.3765.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6671 against the USD, marginally higher from the New York close, as traders cheered a less-than-expected fall in the UK Markit service PMI data for February. During the session, the pair traded at a high of 1.6696 and a low of 1.6661. Yesterday, the British Pound traded 0.19% lower versus the Dollar in the New York session, and closed at 1.6666.
The pair is expected to find its first support at 1.6646 and first resistance at 1.6702.
USD JPY
The USD is trading at 102.42 against the JPY at 10:40 GMT this morning, 0.15% higher from the New York close. Earlier today, the BoJ Governor, Haruhiko Kuroda reiterated that the central bank’s monetary policy is aimed at ending deflation in the domestic economy at soon as possible. During the session, the pair traded at a high of 102.45 and a low of 102.15. In the New York session yesterday, the USD traded 0.38% higher against the JPY, and closed at 102.26. The JPY declined as demand for safe-haven assets declined following Russia’s withdrawal of army troops from Ukraine’s borders.
The pair is expected to find its first support at 101.96 and first resistance at 102.66.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8881 against the Swiss Franc, 0.08% higher from the New York close. During the session, the pair traded at a high of 0.8894 and a low of 0.8871. In the New York session yesterday, the USD traded 0.31% higher against the CHF, and closed at 0.8874.
The pair is expected to find its first support at 0.8843 and first resistance at 0.8907.
USD CAD
At 10:40 GMT, the USD is trading at 1.1077 against the CAD, 0.14% lower from the New York close, ahead of the BoC’s interest rate decision. During the session, the pair traded at a high of 1.1101 and a low of 1.1079. Yesterday, the USD traded 0.21% higher against the CAD in the New York session, and closed at 1.1092.
The pair is expected to find its first support at 1.1050 and first resistance at 1.1112.
AUD USD
The AUD is trading at 0.8972 against the USD, at 10:40 GMT this morning, 0.23% higher from the New York close, after data showed that the Australian economy expanded at a faster pace than market expectations’ for the fourth quarter and after the AiG reported that activities in Australia’s service sector rose at the fastest pace in six years in February. During the session, the pair traded at a high of 0.8998 and a low of 0.8949. AUD traded marginally higher against the USD in the New York session, and closed at 0.8951.
The pair is expected to find its first support at 0.8936 and first resistance at 0.9003.
Gold
At 10:40 GMT, Gold is trading at $1333.97 per ounce, 0.05% lower from the New York close. This morning, Gold traded at a high of $1341.50 and a low of $1332.74 per ounce. In the New York session yesterday, the yellow metal traded 0.08% higher, and closed at $1334.59. However the gains were capped as demand for safe-haven assets declined following Russia’s decision to back-off from Ukraine’s borders.
Gold has its first support at $1329.71 and first resistance at $1339.87.
Silver
Silver is trading at $21.25 per ounce, 0.35% higher from the New York close, at 10:40 GMT this morning. Overnight, media reports indicated that easing of import curbs on gold in India could weigh on the demand-outlook of silver as an alternative asset. This morning, Silver traded at a high of $21.28 and a low of $21.14. Silver traded 0.15% higher against the USD in the New York session, and closed at $21.17.
Silver has its first support at $21.08 and first resistance at $21.36.
Crude Oil
At 10:40 GMT, Oil is trading at $102.84 per barrel, 0.50% lower from the New York close, ahead of the Energy Information Administration (EIA) weekly report on the US crude inventories. This morning, Oil traded at a high of $103.53 and a low of $102.81. Yesterday, Oil traded 0.38% lower in the New York session, and closed at $103.36, as easing tensions in Ukraine lifted some concerns on the supply-outlook of the commodity. Separately, the American Petroleum Institute (API) reported that US crude supplies rose less-than-expected by 1.2 million barrels last week.
It has its first support at $102.44 and first resistance at $103.61.
Economic Snapshot
UK BRC shop price index declined in February
On an annual basis, the BRC shop price index in the UK fell 1.4% in February, compared to a 1.0% fall in the previous month.
UK services PMI declined in February
The Markit services purchasing managers’ index (PMI) in the UK eased to a reading of 58.2 in February, compared to a final reading of 58.3 reported in the previous month. Market had expected the index to fall to a reading of 58.0 in February.
Euro-zone services PMI rose more than preliminary estimate February
The final Markit services PMI in the Euro-zone increased to a reading of 52.6 in February, higher than preliminary estimate of a level of 51.7 and following a reading of 51.6 recorded in the previous month. Additionally, the final composite PMI in the Euro-zone rose to a reading of 53.3 in February from a reading of 52.9 posted in January.
Euro-zone economy expanded in line with previous estimate in the Q4 2013
On a seasonally adjusted quarterly basis, GDP in the Euro-zone rose 0.3% in the fourth quarter of 2013, in line with the preliminary estimate and compared to a 0.1% rise recorded in the third quarter of 2013
Euro-zone retail sales rose more than expected in January
On a monthly basis, retail sales in the Euro-zone rose 1.6% in January, after recording a revised fall of 1.3% in the previous month. Market had expected retail sales to rise 0.8% in January.
Germany services PMI advanced more than preliminary estimate in February
The final Markit services PMI in Germany climbed to a reading of 55.9 in February, more than preliminary estimate of a level of 55.4 and compared to a reading of 53.1 in January.
France final services PMI declined less than the preliminary estimate in February
The final services PMI in France fell to a reading of 47.2 in February, from a reading of 48.9 in the previous month, but less than the preliminary estimate of a level of 46.9.
Italy services PMI rose in February
Markit services PMI in Italy climbed to a reading of 52.9 in February, following a reading of 49.4 in the previous month.
Spain services PMI fell unexpectedly in February
Markit services PMI in Spain dropped unexpectedly to a reading of 53.7 in February, from a reading of 54.9 in the previous month. Market had expected Spain’s services PMI to rise to a level of 55.0 in February.
Australia GDP rose more than expected in the Q4 2013
On a seasonally adjusted annual basis, GDP in Australia rose 2.8% in the fourth quarter of 2013, more than market estimate of a rise of 2.5% and compared to a revised 2.4% increase recorded in the third quarter of 2013.
China services sector activity rose in February
China’s services PMI increased to a level of 51.0 in February, from a level of 50.7 reported in the previous month.
China reiterated 7.5% growth target for 2014
China’s Premier, Li Keqiang, speaking at the annual parliament meeting, maintained the nation’s growth target of 7.5% for 2014. Li also announced that the government would continue to focus on reforms and rebalancing the economy.
Happy pips.
