Forex Market Update
This morning, the USD is trading mostly higher against most of the major currencies.
This morning, the BoJ kept its monetary stance unchanged at its March policy meeting but raised concerns over the weakness in the nation’s export sector. However, the BoJ Governor, Haruhiko Kuroda stated that the weakness in the nation’s exports is temporary and that the BoJ need not adjust its policy as of now.
Yesterday, in the New York session, the greenback traded mostly higher against the key currencies. The Chicago Fed President, Charles Evans indicated that the US Fed would continue trimming its asset purchase at a $10 billion pace while hinting that policymakers were discussing a new forward guidance, which would give more emphasis on “qualitative” aspect rather than the current numerical threshold.
The EUR declined against the USD after an ECB official, Christian Noyer highlighted policymaker’s grief over the strengthening Euro, which according to them was creating additional downward pressure on the economy and inflation. Separately, IMF’s Olivier Blanchard opined that the Euro-zone economy is still exposed to deflation risks and that prolonged low inflation could make necessary adjustments more difficult.
The GBP lost ground after the BoE policymaker Charlie Bean warned that a hike in interest rate may be delayed if the currency continued to rise, as it could impact the nation’s export-driven ability.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3861 against the USD, 0.12% lower from the New York close. Early morning, an official data showed that Germany’s trade surplus narrowed in January, as imports in the nation grew faster than exports. During the session, the pair traded at a high of 1.3880 and a low of 1.3853. Yesterday, the EUR traded 0.06% lower against the USD in the New York session, and closed at 1.3877, after the ECB’s Christian Noyer stated that a stronger Euro created downward pressure on the economy and inflation.
The pair is expected to find its first support at 1.3842 and first resistance at 1.3885.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6638 against the USD, marginally lower from the New York close. Data showed that UK industrial production came in below expectations, while the manufacturing production rose more than forecast in January. During the session, the pair traded at a high of 1.6655 and a low of 1.6623. Yesterday, the British Pound traded tad lower versus the Dollar in the New York session, and closed at 1.6643, after the BoE’s Charlie Bean hinted that a further appreciation in the GBP could hamper Britain’s trading performance and compel the BoE to keep its interest rate lower for a longer time.
The pair is expected to find its first support at 1.6610 and first resistance at 1.6670.
USD JPY
The USD is trading at 103.32 against the JPY at 9:40 GMT this morning, slightly higher from the New York close. Earlier today, the BoJ kept its monetary policies intact but cited weakness in the nation’s export sector. However, later, the BoJ Governor, Haruhiko Kuroda stated that the slackness in the export sector is temporary and that the central bank did not see any reason to alter its policy as of now. During the session, the pair traded at a high of 103.44 and a low of 103.25. In the New York session yesterday, the USD traded marginally lower against the JPY, and closed at 103.29.
The pair is expected to find its first support at 103.16 and first resistance at 103.45.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8787 against the Swiss Franc, 0.11% higher from the New York close. In economic news, on a quarterly basis, industrial production in Switzerland rose at a slower pace than expected in the fourth quarter. During the session, the pair traded at a high of 0.8805 and a low of 0.8779. In the New York session yesterday, the USD traded flat against the CHF, and closed at 0.8777.
The pair is expected to find its first support at 0.8771 and first resistance at 0.8804.
USD CAD
At 9:40 GMT, the USD is trading at 1.1125 against the CAD, 0.17% higher from the New York close. During the session, the pair traded at a high of 1.1133 and a low of 1.1109. Yesterday, the USD traded slightly lower against the CAD in the New York session, and closed at 1.1106. The Canadian Dollar benefited from a report that showed housing starts in Canada rose more than market estimates in February.
The pair is expected to find its first support at 1.1098 and first resistance at 1.1142.
AUD USD
The AUD is trading at 0.9030 against the USD, at 9:40 GMT this morning, 0.10% higher from the New York close. Data releases overnight showed that, the NAB business conditions in Australia registered a flat reading in February while the NAB business confidence fell to a reading of 7.0 in the previous month. During the session, the pair traded at a high of 0.9052 and a low of 0.9016. AUD traded 0.21% lower against the USD in the New York session, and closed at 0.9021.
The pair is expected to find its first support at 0.9009 and first resistance at 0.9052.
Gold
At 9:40 GMT, Gold is trading at $1348.26 per ounce, 0.62% higher from the New York close. Separately, the SPDR Gold Trust reported that the gold holdings in the world’s largest exchange-traded product backed by the metal rose to its highest level since December 20, 2013. This morning, Gold traded at a high of $1349.21 and a low of $1337.95 per ounce. In the New York session yesterday, the yellow metal traded 0.17% higher, and closed at $1340.00, as demand for safe-haven assets rose after reports showed that Russian army attacked Ukraine military post in Crimea.
Gold has its first support at $1338.65 and first resistance at $1353.54.
Silver
Silver is trading at $21.03 per ounce, 0.83% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $21.05 and a low of $20.80. Silver traded 0.19% lower against the USD in the New York session, and closed at $20.85, mirroring losses in the prices of industrial metals.
Silver has its first support at $20.86 and first resistance at $21.12.
Crude Oil
At 9:40 GMT, Oil is trading at $101.47 per barrel, 0.60% higher from the New York close, as escalating tensions in Ukraine weighed on the supply prospect of the commodity. This morning, Oil traded at a high of $101.50 and a low of $100.86. Yesterday, Oil traded 0.11% lower in the New York session, and closed at $100.90, as a fall in China’s exports sparked fresh concerns on the demand-outlook of the commodity.
It has its first support at $101.03 and first resistance at $101.73.
Economic Snapshot
UK BRC retail sales declined unexpectedly in February
On an annual basis, the BRC like-for-like retail sales in the UK dropped 1.0% in February, compared to a 3.9% rise recorded in the previous month. Markets were expecting the UK retail sales to rise 1.8% in February.
UK’s industrial production rose at a slower pace than expected in January
On a month-on-month basis, industrial production in the UK rose 0.1% in January, less than analysts’ call for a 0.2% rise and compared to a 0.5% increase recorded in the preceding month. Meanwhile, on a monthly basis, manufacturing production in the UK rose more-than-expected 0.4% in January, compared to a similar pace of rise witnessed in the previous month.
German trade surplus narrowed less than expected in January
On a seasonally adjusted basis, Germany’s trade surplus narrowed to €17.2 billion in January, less than market forecasts and compared to a revised surplus of €18.3 billion recorded in the previous month. On a monthly basis, seasonally adjusted imports in Germany rose 4.1% in January, following a revised fall of 1.4% in the preceding month. On a seasonally adjusted monthly basis, exports in Germany rose 2.2% in January, following a revised fall of 1.0% recorded in the preceding month.
Germany labor costs rose at a faster pace in the Q4 2013
On a working day adjusted annual basis, labor costs in Germany rose 2.0% in Q4 2013, compared to a revised increase of 1.9% in the previous quarter.
Italy’s GDP declined more than forecast in the fourth quarter
On an annual basis, Italy’s GDP declined 0.9% in the fourth quarter, more than market expectations for a 0.8% drop and compared to a revised 0.8% fall registered in the preceding quarter.
Switzerland industrial production rose at a slower pace in Q4 2013
On an annual basis, industrial production in Switzerland rose 0.4% in Q4 2013, compared to a revised increase of 0.5% in the previous quarter. Markets were expecting industrial production to climb 1.0% in the Q4 2013.
BoJ kept its monetary policy unchanged
The Bank of Japan (BoJ) left its benchmark interest rate unchanged at 0.10% and has maintained its asset purchase program. The central bank has also kept its inflation outlook unchanged while reiterating that the nation's economy continues to recover at a moderate pace and that “inflation expectations appear to be rising on the whole.”
Japan machine tool orders rose at a slower pace in February
On an annual basis, preliminary machine tool orders in Japan rose 26.0% in February, following an increase of 40.3% recorded in the preceding month.
No need to adjust monetary policy, indicated BoJ’s Haruhiko Kuroda
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, in his press conference, stated that there is need to adjust monetary policy as the economy would continue to exceed its potential growth rate. He reiterated that the nation’s economy is on track to achieve the central bank's 2.0% inflation target.
Australia NAB business confidence fell in February
The NAB business confidence in Australia has dropped to a level of 7.0 in February, compared to a revised reading of 9.0 recorded in the previous month. Meanwhile, business conditions in Australia remained flat in February, from a revised level of 5.0 in the previous month.
Happy pips.
