Forex Market Update
This morning, the greenback is trading higher against most of the major currencies, ahead of the Federal Reserve policy decision.
The GBP jumped higher as claimant count data suggested an improvement in UK job conditions and after minutes of BoE‘s latest meeting revealed no change in its existing monetary policy.
Early morning, the BoJ Governor Haruhiko Kuroda expressed optimism that the Japanese economy was inching towards the central bank's 2% inflation target with expectations of growth above its potential even after a sales tax rise.
The AUD is trading lower against the USD as Australia’s largest export market, China, witnessed the collapse of a private developer, raising concerns of an economic slowdown in the latter.
The CAD came under pressure after the BoC Governor Stephen Poloz projected a weak domestic growth in the first quarter of the year. He further highlighted the possibility of an interest-rate cut if inflation continued to undershoot the BoC’s 2% target.
Yesterday, the USD received support as the US building permits data rose to a four month high in February, and after the consumer price index came in line with expectations. However, gains were kept in check after the US housing starts fell for a third consecutive month.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3907 against the USD, 0.19% lower from the New York close. During the session, the pair traded at a high of 1.3935 and a low of 1.3910. Yesterday, the EUR traded 0.22% higher against the USD in the New York session, and closed at 1.3934, after risk appetite received a boost from President Vladimir Putin’s statement that Russia has no intention to divide Ukraine further.
The pair is expected to find its first support at 1.3876 and first resistance at 1.3941.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6620 against the USD, 0.16% higher from the New York close, after the number of unemployed persons in the UK fell more than expected by 34.6k in January, following a 33.9K drop witnessed in December. The BoE, in its minutes, revealed that all policymakers opted to keep the policies loose. It added that the strengthening GBP was putting pressure on CPI. During the session, the pair traded at a high of 1.6643 and a low of 1.6592. Yesterday, the British Pound traded 0.06% higher versus the Dollar in the New York session, and closed at 1.6593.
The pair is expected to find its first support at 1.6562 and first resistance at 1.6660.
USD JPY
The USD is trading at 101.65 against the JPY at 9:40 GMT this morning, 0.22% higher from the New York close. The JPY came under pressure, after Japan’s trade deficit exceeded market estimates in February. Meanwhile, the BoJ Governor asserted that the Japanese economy was on path to achieve the central bank’s 2% inflation target. During the session, the pair traded at a high of 101.71 and a low of 101.35. In the New York session yesterday, the USD traded 0.07% lower against the JPY, and closed at 101.43.
The pair is expected to find its first support at 101.35 and first resistance at 101.87.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8754 against the Swiss Franc, 0.29% higher from the New York close. On the macro front, economic sentiment indicator in Switzerland tumbled to a reading of 19.0 in March, from a reading of 28.7 reported in the previous month. During the session, the pair traded at a high of 0.8758 and a low of 0.8733. In the New York session yesterday, the USD traded 0.22% lower against the CHF, and closed at 0.8729.
The pair is expected to find its first support at 0.8729 and first resistance at 0.8774.
USD CAD
At 9:40 GMT, the USD is trading at 1.1169 against the CAD, 0.3% higher from the New York close. During the session, the pair traded at a high of 1.1179 and a low of 1.1125. Yesterday, the USD traded 0.92% higher against the CAD in the New York session, and closed at 1.1136. The CAD was weighed down by BoC Governor Stephen Poloz’s tepid economic growth forecast for the first quarter, and further comments that an interest rate cut could not be ruled out.
The pair is expected to find its first support at 1.1069 and first resistance at 1.1224.
AUD USD
The AUD is trading at 0.9114 against the USD, at 9:40 GMT this morning, 0.2% lower from the New York close, as economic outlook of China, its largest trade partner, got clouded following the collapse of a private developer which weighed on China’s stocks and the Yuan. During the session, the pair traded at a high of 0.9140 and a low of 0.9112. AUD traded 0.22% higher against the USD in the New York session, and closed at 0.9132.
The pair is expected to find its first support at 0.9077 and first resistance at 0.9146.
Gold
At 9:40 GMT, Gold is trading at $1347.71 per ounce, 0.66% lower from the New York close, as investors remain cautious ahead of the Federal Reserve monetary policy decision, while also further evaluating the situation in Ukraine. This morning, Gold traded at a high of $1359.93 and a low of $1345.51 per ounce. In the New York session yesterday, the yellow metal traded 0.35% higher, and closed at $1356.65.
Gold has its first support at $1340.88 and first resistance at $1359.17.
Silver
Silver is trading at $20.73 per ounce, 0.63% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $20.96 and a low of $20.67. Silver traded 1.01% higher against the USD in the New York session, and closed at $20.86.
Silver has its first support at $20.54 and first resistance at $21.00.
Crude Oil
At 9:40 GMT, Oil is trading at $99.65 per barrel, 0.20% higher from the New York close. This morning, Oil traded at a high of $99.69 and a low of $99.34. Yesterday, Oil traded 1.21% higher in the New York session, and closed at $99.48, after a pipeline company announced that it would double the capacity of a pipeline connecting Oklahoma storage with Gulf Coast refineries sooner than previously expected. Meanwhile, the API stated that crude inventories rose by 5.9 million barrels for the week ended 14 March.
It has its first support at $98.56 and first resistance at $100.26.
Economic Snapshot
UK average earnings rose higher than market estimate in January
The National Statistics reported that on an annual basis, average weekly earnings including bonus in the UK rose 1.4% in January, compared to a revised rise of 1.2% recorded in the previous month. Markets were expecting average earnings including bonus to rise 1.3% in January. Meanwhile, the average earnings excluding bonus in the UK climbed 1.3% in January, following an increase of 1.0% recorded in the preceding month.
UK unemployment remained steady in January
The National Statistics reported that on a three months basis, the ILO unemployment rate in the UK remained unchanged at 7.2% in January, in line with market expectations and compared to the previous month. Meanwhile, the number of people employed in the UK increased by 105.0 K in January, compared to a rise of 193.0 K employees recorded in the previous month. Additionally, the number of people claiming unemployment benefits in the UK dropped by 34.6 K in February, compared to a revised fall of 33.9 K in the previous month.
Britain's economic recovery is broadening, indicated BoE minutes
The Bank of England (BoE), in its minutes of the monetary policy meeting held on 5-6 March, indicated that the nation’s economic recovery is broadening but has some way to go before it is sustainable. Meanwhile, the minutes showed the central bank officials voted unanimously to keep the benchmark rate unchanged at 0.5% this month and to maintain the assets purchase programme at GBP 375.0 billion.
France current account widened in January
The Bank of France reported that the current account deficit in France widened to €4.5 billion in January, from a revised deficit of €1.6 billion recorded in the previous month.
Swiss economic expectation index dropped more than expected in March, indicated ZEW
The Centre for European Economic Research (ZEW) reported that the economic expectations index in Switzerland declined to a reading of 19.0 in March, more than market expectations for a level of 25.0 and from a reading of 28.7 recorded in the previous month.
Japan’s all industry activity index increased less than anticipated in January
The Ministry of Economy, Trade and Industry reported that on a monthly basis, the all industry activity index in Japan rose 1.0% in January, less than market expectation for a 1.1% increase and following a revised decrease of 0.3% recorded in the preceding month.
Japan final leading economic index advanced more than the preliminary estimate in January
The Cabinet Office of Japan reported that final leading economic index in Japan rose to a level of 113.1 in January, higher than the flash estimate of 112.2 and compared to a revised reading of 111.9 reported in the previous month. Meanwhile, the final coincident index rose to a level of 115.2 in January, more than the preliminary estimate of 114.8 and compared to a revised level of 112.2 recorded in the previous month.
Japan nationwide department store sales rose in February
The Japan Department Store Association reported that on an annual basis, nationwide department store sales in Japan rose 3.0% in February, following a rise of 2.9% recorded in the preceding month.
BoJ’s Kuroda reiterated 2% price stability target
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, reinforced that the Japanese economy is on the path to achieve the central bank’s 2% inflation target and that the BoJ would alter its policy appropriately to attain the same. Kuroda further stated that the central bank is only halfway towards achieving its inflation target and that its focus continues to remain on dispelling deflationary pressures in the nation.
Australia internet skilled vacancies rose at a slower pace in February
The Department of Education, Employment and Workplace Relations (DEEWR) reported that on a monthly basis, internet skilled vacancies in Australia increased 0.2% in February, following a revised increase of 1.0% recorded in the preceding month.
Happy pips.
