Forex Market Update
This morning, the USD is trading mostly lower against most of the major currencies.
Market participants keenly await policy decision from the Bank of England (BoE) and the European Central Bank (ECB) for further guidance in the GBP and the EUR, respectively.
The JPY is trading lower against the USD after a panel at Japan’s labor ministry highlighted the possibility for the nation’s pension fund to diversify out of Japanese bonds due to quickening inflation.
Demand for the AUD rose after data from Australia showed that retail sales and trade surplus in the nation rose above market expectations in January. Separately, the Reserve Bank of Australia’s (RBA) John Edwards opined that upbeat GDP data has overshadowed threats of a serious economic downturn and has proved that the nation is gradually shifting its focus from mining driven activities to other sources of demand.
Yesterday, in the New York session, the USD traded lower against the key currencies. The Fed Chief, Janet Yellen pledged to emphasize more on jobs and stable price to ensure that the US economic growth meets Congress-mandate goals. Separately, the Fed’s Beige Book revealed that eight of the twelve regions in the US managed to show “modest to moderate” improvement even as harsh winter subdued the nation’s economic growth as a whole.
In the Euro-zone, the IMF urged the ECB to slash its key interest rate and opt for more alternative measures to combat deflation risks in the region.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3734 against the USD, flat from the New York close, ahead of the ECB’s interest rate decision. In economic news, Germany’s factory orders rose more than market estimates for January. During the session, the pair traded at a high of 1.3739 and a low of 1.3725. Yesterday, the EUR traded marginally higher against the USD in the New York session, and closed at 1.3734.
The pair is expected to find its first support at 1.3711 and first resistance at 1.3754.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6724 against the USD, steady from the New York close, as market participants keenly await the BoE’s decision on its benchmark interest rate and asset-purchase facility. On the economic front, the Halifax house prices in the UK registered the fastest growth in five years in February. During the session, the pair traded at a high of 1.6731 and a low of 1.6711. Yesterday, the British Pound traded slightly higher versus the Dollar in the New York session, and closed at 1.6722.
The pair is expected to find its first support at 1.6675 and first resistance at 1.6758.
USD JPY
The USD is trading at 102.67 against the JPY at 10:40 GMT this morning, 0.35% higher from the New York close. The Yen lost ground against the Dollar after comments from Japan’s government panel spurred speculation that the nation’s pension fund would diversify its portfolio by purchasing foreign assets on a large scale. A panel at the labor ministry suggested that the nation’s giant pension fund need not concentrate on bonds, due to rising inflation. During the session, the pair traded at a high of 102.83 and a low of 102.31. In the New York session yesterday, the USD traded 0.14% lower against the JPY, and closed at 102.31.
The pair is expected to find its first support at 102.33 and first resistance at 102.92.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8878 against the Swiss Franc, 0.09% higher from the New York close. During the session, the pair traded at a high of 0.8893 and a low of 0.8871. In the New York session yesterday, the USD traded 0.07% lower against the CHF, and closed at 0.8870.
The pair is expected to find its first support at 0.8859 and first resistance at 0.8897.
USD CAD
At 10:40 GMT, the USD is trading at 1.1024 against the CAD, 0.07% lower from the New York close. Traders await the Canada’s Ivey PMI and building permit data for further cues in the loonie. During the session, the pair traded at a high of 1.1048 and a low of 1.1025. Yesterday, the USD traded 0.30% lower against the CAD in the New York session, and closed at 1.1032. The Canadian Dollar advanced after the BoC kept its interest rate unchanged at 1% and hinted gradual strength in the nation’s fundamental drivers of growth and inflation.
The pair is expected to find its first support at 1.0995 and first resistance at 1.1077.
AUD USD
The AUD is trading at 0.9045 against the USD, at 10:40 GMT this morning, 0.62% higher from the New York close, after data showed that Australia’s retail sales and trade surplus registered an upbeat rise in January. Positive sentiment was also fuelled after the RBA’s John Edwards expressed optimism on the Australian economy by stating that the recent strong GDP figures prove that the economy has gained momentum. During the session, the pair traded at a high of 0.9059 and a low of 0.8979. AUD traded 0.16% higher against the USD in the New York session, and closed at 0.8989.
The pair is expected to find its first support at 0.8983 and first resistance at 0.9083.
Gold
At 10:40 GMT, Gold is trading at $1335.53 per ounce, 0.12% lower from the New York close, on profit-booking. This morning, Gold traded at a high of $1345.00 and a low of $1331.27 per ounce. In the New York session yesterday, the yellow metal traded 0.14% higher, and closed at $1337.15, as traders favored the safe-haven metal following the release of lackluster ISM service PMI and ADP employment data from the US.
Gold has its first support at $1329.53 and first resistance at $1343.26.
Silver
Silver is trading at $21.17 per ounce, marginally lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.28 and a low of $21.09. Silver traded 0.19% lower against the USD in the New York session, and closed at $21.17.
Silver has its first support at $21.06 and first resistance at $21.30.
Crude Oil
At 10:40 GMT, Oil is trading at $101.30 per barrel, 0.30% higher from the New York close. This morning, Oil traded at a high of $101.45 and a low of $100.86. Yesterday, Oil traded 2.03% lower in the New York session, and closed at $100.99 after a report from the Energy Information Administration (EIA) showed that the US crude stockpiles rose by 1.4 million barrels last week.
It has its first support at $100.36 and first resistance at $102.73.
Economic Snapshot
UK Halifax house price index rose more than expected in February
On an annual basis, the Halifax house price index in the UK rose 7.9% in February, following a rise of 7.3% recorded in the preceding month. Markets were expecting the index to rise 7.3% in February.
France unemployment rate fell in the Q4 2013
The ILO unemployment rate in France declined to 10.2% in Q4 2013, compared to a revised rate of 10.3% recorded in the previous quarter.
US aggressive easing policies creating risks of financial imbalance, indicated Fed’s Fisher
The President of Dallas Federal Reserve (Fed) Bank, Richard Fisher cautioned that US central bank’s aggressive bond buying program, in an attempt to foster the nation’s economic growth, is expected to create significant market imbalances and consequently encourage pre-2008 financial crisis risky behavior.
Fed policies have boosted the US economy, indicated Fed’s Williams
John Williams, the President of the San Francisco Federal Reserve (Fed) Bank, opined that improvement in the interest rate-sensitive sectors like auto and housing have indicated that the central bank’s accommodative monetary policy is working. Williams also expressed confidence that the US economy would continue to expand 2.5% or more annually and that unemployment would likely fall to between 5-6% over the next few years.
BoJ to adjust policy to counter risks to economic outlook, indicated BoJ’s Iwata
The Bank of Japan (BoJ) Deputy Governor, Kikuo Iwata, indicated that the central bank would appropriately adjust its monetary policy if risks to economic outlook threaten its 2% inflation target. Iwata also stated that the Japanese economic recovery would continue at a moderate pace even after the proposed sales tax hike comes into effect in April 2014.
Australia retail sales rose at a faster pace in January
On a seasonally adjusted monthly basis, retail sales in Australia rose 1.2% in January, compared to a revised 0.7% rise in the previous month. Market had expected retail sales to rise 0.4% in January.
Australia’s trade surplus widened unexpectedly in January
Australia’s seasonally adjusted trade surplus widened to A$1433.0 million in January, compared to a revised surplus of A$591.0 million recorded in the previous month. Market had expected Australia’s trade surplus to narrow to A$100.0 million in January.
Happy pips.
