Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
The JPY is trading higher against the USD as lingering tensions in Ukraine and growing concerns on China’s economic growth spurred demand for safe-haven assets. Meanwhile, the minutes from the BoJ’s February 17-18 policy meeting projected the Japanese economy to continue to expand at a moderate pace in future while indicating that the economy and price movement were on track with the central bank’s expectations.
The AUD is trading lower against its US counterpart after a leading broking house revised down its forecast for the exchange rate of the AUD, on speculation that the RBA could lower its interest rate in the future.
Yesterday in the New York session, the USD traded mostly higher against key currencies after data showed that retail sales in the US rose for the first time in three months in February while weekly jobless claims declined to the lowest level to since November in the previous week.
The EUR came under pressure after the ECB Chief, Mario Draghi indicated that the central bank’s forward guidance on interest rate could possibly depreciate the EUR. Furthermore, he eased concerns on deflation in the economy by stating that the policymakers would undertake additional measures to counter deflation risks to the economy. Meanwhile, another ECB policymaker, Jens Weidmann urged the central bank to not react to the daily changes in exchange rates.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3881 against the USD, 0.08% higher from the New York close. In economic news, consumer inflation rate in Germany declined to 1.2% (YoY) in February, from previous month’s level of 1.3%. During the session, the pair traded at a high of 1.3893 and a low of 1.3853. Yesterday, the EUR traded 0.52% lower against the USD in the New York session, and closed at 1.3870, after the ECB President, Mario Draghi hinted that the central bank’s forwards guidance on interest rate could weaken the EUR.
The pair is expected to find its first support at 1.3828 and first resistance at 1.3950.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6612 against the USD, slightly lower from the New York close, after the total trade deficit in the UK widened to £2.565 billion in January, compared to a deficit of £0.668 billion registered in the previous month. During the session, the pair traded at a high of 1.6630 and a low of 1.6602. Yesterday, the British Pound traded 0.40% lower versus the Dollar in the New York session, and closed at 1.6621, as upbeat US retail sales and jobless claims data benefited the US Dollar.
The pair is expected to find its first support at 1.6564 and first resistance at 1.6690.
USD JPY
The USD is trading at 101.62 against the JPY at 9:40 GMT this morning, 0.24% lower from the New York close. Early morning, the minutes from the BoJ’s February policy meeting indicated that the economy and prices were moving in-line with the central bank’s forecast. The minutes also dismissed concerns on the impact of a sales tax hike on the economy and projected the economy to continue to expand at a moderate pace. During the session, the pair traded at a high of 101.89 and a low of 101.58. In the New York session yesterday, the USD traded 0.79% lower against the JPY, and closed at 101.86.
The pair is expected to find its first support at 101.14 and first resistance at 102.46.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8745 against the Swiss Franc, tad lower from the New York close. On the economic front, Swiss producer and import prices registered a 0.4% (MoM) fall in February, defying market expectations for the prices to remain unchanged at previous month’s flat reading. During the session, the pair traded at a high of 0.8763 and a low of 0.8747. In the New York session yesterday, the USD traded 0.26% higher against the CHF, and closed at 0.8746, following a strong US retail sales and weekly jobless claims data.
The pair is expected to find its first support at 0.8709 and first resistance at 0.8773.
USD CAD
At 9:40 GMT, the USD is trading at 1.1086 against the CAD, 0.13% higher from the New York close. During the session, the pair traded at a high of 1.1112 and a low of 1.1073. Yesterday, the USD traded tad lower against the CAD in the New York session, and closed at 1.1072. The CAD benefited from an official report that showed new housing prices in Canada rose at the fastest pace in 20 months in January.
The pair is expected to find its first support at 1.1048 and first resistance at 1.1118.
AUD USD
The AUD is trading at 0.9024 against the USD, at 9:40 GMT this morning, 0.11% lower from the New York close, after one of the leading brokers highlighted the possibility for a hike in RBA’s benchmark interest rate and slashed its 12-month and 6-month estimates on the Aussie to 80 cents and 82 cents, respectively. During the session, the pair traded at a high of 0.9044 and a low of 0.9004. AUD traded 0.37% lower against the USD in the New York session, and closed at 0.9034, hurt by the latest batch of downbeat economic releases from its largest trading partner, China.
The pair is expected to find its first support at 0.8978 and first resistance at 0.9088.
Gold
At 9:40 GMT, Gold is trading at $1371.05 per ounce, marginally higher from the New York close. This morning, Gold traded at a high of $1376.64 and a low of $1367.94 per ounce. In the New York session yesterday, the yellow metal traded 0.26% higher, and closed at $1370.72, as ongoing tensions in Ukraine and lingering concerns on China’s economic growth, lured investors to the safe-haven metal. However, a stronger US Dollar capped the gains in the commodity.
Gold has its first support at $1364.91 and first resistance at $1376.92.
Silver
Silver is trading at $21.31 per ounce, 0.47% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $21.33 and a low of $21.13. Silver traded 0.31% higher against the USD in the New York session, and closed at $21.21, amid strong demand for safe-haven assets. However, the gains were limited after the US Dollar advanced on the back of an upbeat batch of economic releases.
Silver has its first support at $21.13 and first resistance at $21.47.
Crude Oil
At 9:40 GMT, Oil is trading at $98.33 per barrel, 0.10% higher from the New York close. This morning, Oil traded at a high of $98.39 and a low of $98.06. Yesterday, Oil traded 0.15% higher in the New York session, and closed at $98.22, as upbeat economic data from the US bolstered the demand-outlook of the commodity while lingering tensions in Ukraine weighed on the supply prospects of crude oil.
It has its first support at $97.80 and first resistance at $98.73.
Economic Snapshot
UK visible trade deficit widened more than market estimate in January
Visible trade deficit in the UK widened to £9.8 billion in January, from a revised deficit reading of £7.7 billion in the previous month. Market had expected the UK’s visible trade deficit to widen to £8.6 billion in January. Meanwhile, the non-EU trade deficit of UK widened to £4.0 billion in January, compared to a revised deficit of £2.3 billion in the previous month. The total trade deficit increased to £2.6 billion in January, compared to a revised deficit reading of £0.7 billion in the previous month.
UK CB leading index rose in January
The CB leading economic index in the UK rose 0.7% in January, compared to a 0.1% decrease recorded in the previous month.
Euro-zone employment rose in the fourth quarter of 2013
On a quarterly basis, the number of persons employed in the Euro-zone climbed 0.1% in Q4 2013, compared to a flat change in the previous quarter.
German final consumer price index rose in line with the preliminary estimate
On an annual basis, the final consumer price index in Germany increased 1.2% in February, in line with the preliminary estimate, compared to a 1.3% rise reported in the previous month. Meanwhile, on an annual basis, the final harmonized consumer price (HICP) index in Germany rose 1.0% in February, in line with the preliminary estimate, following a 1.2% rise in the previous month.
Switzerland producer and import prices fell more than market estimate in February
On an annual basis, producer and import prices in Switzerland declined 0.8% in February, compared to a 0.3% fall recorded in the previous month. Markets were expecting the Swiss producer and import prices to fall 0.5% in February.
Japan’s capacity utilization rose in January
On a monthly basis, capacity utilization in Japan increased 5.9% in January, following a 2.2% rise recorded in the previous month.
Japan’s final industrial production rose less than the preliminary estimate in January
On an annual basis, final industrial production in Japan increased 10.3% in January, less than the preliminary estimate of a 10.6% rise and compared to a rise of 7.1% recorded in December.
Happy pips.
