Forex Market Update
This morning, the USD is trading lower against most of the major currencies. However the greenback headed for its biggest weekly gain in three months against the yen amid hawkish statements by few Fed officials and ahead of the nonfarm payrolls data.
The AUD is trading higher against the USD after the Reserve Bank of Australia Governor, Glenn Stevens, dismissed expectations of a rate cut.
During the New York session yesterday, the USD traded mostly lower against the key currencies, hurt by a soft factory orders data. However, despite the recent batch of soft US economic data, three eminent Fed policymakers, Dennis Lockhart, Charles Plosser and William Dudley expressed optimism on the growth-outlook of the US economy and urged the central bank to continue with its tapering plans in the future.
The EUR rose against the USD as traders’ appetite for risk-taking increased after the ECB Chief, Mario Draghi, dismissed concerns on deflation by opining that inflation could gradually reach its 2% target by the end of 2016. Market participants also reacted positively to the ECB’s decision of keeping its interest rate unchanged at 0.25% and upgrading its 2014 growth outlook on the region’s economy by 0.1% to 1.2%.
In the UK, the Bank of England (BoE) kept its interest rate at a record-low of 0.5% and maintained the size of its asset-purchase facility at £375 billion.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3885 against the USD, 0.17% higher from the New York close. During the session, the pair traded at a high of 1.3885 and a low of 1.3857. Yesterday, the EUR traded 0.81% higher against the USD in the New York session, and closed at 1.3862, after the ECB upgraded its 2014 growth-outlook on the Euro-zone economy by 0.1% to 1.2% and after the ECB President, Mario Draghi, projected inflation in the region to reach its 2% goal by 2016.
The pair is expected to find its first support at 1.3779 and first resistance at 1.3938.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6746 against the USD, tad higher from the New York close. On the macro economic front, the BoE reported that public expectations for annual consumer inflation rate in the UK economy fell to 2.8%, from an earlier expectation of 3.6%. During the session, the pair traded at a high of 1.6772 and a low of 1.6728. Yesterday, the British Pound traded 0.22% higher versus the Dollar in the New York session, and closed at 1.6741 even as the BoE refrained from altering its record-low interest rate of 0.5% and its asset-purchase facility of £375 billion.
The pair is expected to find its first support at 1.6694 and first resistance at 1.6788.
USD JPY
The USD is trading at 102.95 against the JPY at 10:40 GMT this morning, 0.17% lower from the New York close, ahead of the release of US payrolls data. Japan’s coincident index advanced more than market estimates while leading economic index in the nation registered a less than expected rise in January. Separately, data showed that foreign reserve in Japan rose for the second straight month to $1,288.2 billion in February. During the session, the pair traded at a high of 103.18 and a low of 102.88. In the New York session yesterday, the USD traded 0.38% higher against the JPY, and closed at 103.13.
The pair is expected to find its first support at 102.66 and first resistance at 103.21.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8780 against the Swiss Franc, 0.27% lower from the New York close. In economic news, Switzerland’s unemployment rate came in unchanged at previous month’s level of 3.2%, broadly in-line with market estimates. Meanwhile, Swiss consumer inflation rose less-than-expected 0.1% MoM in February, compared to a 0.3% drop in the previous month. During the session, the pair traded at a high of 0.8806 and a low of 0.8781. In the New York session yesterday, the USD traded 0.69% lower against the CHF, and closed at 0.8804.
The pair is expected to find its first support at 0.8741 and first resistance at 0.8851.
USD CAD
At 10:40 GMT, the USD is trading at 1.0990 against the CAD, 0.05% higher from the New York close. BoC Deputy Governor, John Murray opined that weakness in global economic factors might have impacted Canada’s economic growth. During the session, the pair traded at a high of 1.1007 and a low of 1.0987. Yesterday, the USD traded 0.36% lower against the CAD in the New York session, and closed at 1.0985. The Canadian Dollar advanced after a report revealed that building permits in Canada soared 8.5% (MoM) in January and after the Ivey PMI rose to a four-month high reading of 57.2 in February.
The pair is expected to find its first support at 1.0949 and first resistance at 1.1033.
AUD USD
The AUD is trading at 0.9123 against the USD, at 10:40 GMT this morning, 0.37% higher from the New York close, as traders speculated that the RBA would not slash its interest rate in future after the central bank hinted towards a period of stability in interest rates. During the session, the pair traded at a high of 0.9130 and a low of 0.9081. AUD traded 0.35% higher against the USD in the New York session, and closed at 0.9089.
The pair is expected to find its first support at 0.9067 and first resistance at 0.9155.
Gold
At 10:40 GMT, Gold is trading at $1348.28 per ounce, 0.16% lower from the New York close. This morning, Gold traded at a high of $1353.05 and a low of $1346.43 per ounce. In the New York session yesterday, the yellow metal traded 1.16% higher, and closed at $1350.50, as traders favored the yellow metal as a hedge against inflation after the ECB President, Mario Draghi hinted towards a gradual pick-up in the region’s inflation rate in the near future.
Gold has its first support at $1336.47 and first resistance at $1356.90.
Silver
Silver is trading at $21.33 per ounce, 0.64% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.59 and a low of $21.29. Silver traded 1.42% higher against the USD in the New York session, and closed at $21.47, amid a weakness in the US Dollar.
Silver has its first support at $21.08 and first resistance at $21.62.
Crude Oil
At 10:40 GMT, Oil is trading at $101.71 per barrel, 0.30% lower from the New York close. This morning, Oil traded at a high of $102.03 and a low of $101.56. Yesterday, Oil traded 1.22% higher in the New York session, and closed at $101.98, as a weaker US Dollar and lingering tension over Ukraine crisis bolstered the demand prospect of the commodity.
It has its first support at $100.53 and first resistance at $102.48.
Economic Snapshot
UK’s consumer inflation expectations declined
The consumer median inflation expectations for the next 12 months in the UK declined to 2.8%, compared to a rate of 3.6% recorded in November survey.
German wholesale price index fell unexpectedly in January
On a monthly basis, wholesale price index in Germany fell 0.1% in January, compared to a revised 0.3% rise in the previous month. Markets were expecting the wholesale price index to rise 0.6% in January.
Germany’s industrial production rose in-line with market estimates for January
On a seasonally adjusted monthly basis, industrial production in Germany rose 0.8% in January, in-line with market estimates and compared to a revised 0.1% increase witnessed in the preceding month.
France trade deficit widened in January
Trade deficit of France widened to €5.7 billion in January, following a deficit of €5.2 billion in the previous month. On the other hand, the budget deficit of France narrowed to €12.7 billion in January, following a deficit of €74.9 billion in the previous month.
Italy producer price index fell less than market expectations in January
On an annual basis, Italy’s producer price index fell 1.5% in January, compared to a 1.8% fall recorded in the previous month. Market had expected the producer price index to fall 1.7% in January.
Unemployment rate in Switzerland remained unchanged in February
On a non-seasonally adjusted basis, the unemployment rate in Switzerland remained unchanged at 3.5% in February, in line with market expectation and compared to a similar rate reported in the previous month.
Switzerland foreign currency reserves fell in February
Foreign currency reserves in Switzerland dropped to CHF 433.5 billion in February, from CHF 437.7 billion reported in the previous month.
Switzerland consumer price index rose less than market estimate in February
On a monthly basis, Switzerland’s consumer price index (CPI) increased 0.1% in February, compared to a 0.3% fall recorded in the previous month. Market had expected the consumer price index to rise 0.2% in February.
Japan’s leading economic index rose less than expected in January
The preliminary leading economic index in Japan rose to a level of 112.2 in January, lower than market expectation of a level of 112.4 and compared to a reading of 111.7 reported in the previous month. Meanwhile, the preliminary coincident index climbed to a level of 114.8 in January, compared to a revised level of 112.3 recorded in the prior month and higher than market expectation of a level of 114.6.
Australia foreign exchange reserves declined in February
Foreign exchange reserves in Australia dropped to A$ 51.8 billion in February, compared to reserves of A$ 53.3 billion recorded in the previous month.
Happy pips.
