Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
In Japan, the BoJ Governor, Kuroda indicated that there is high chances for the economy to reach its 2% inflation goal somewhere in the end of fiscal 2014 to the beginning of fiscal 2015.
The CHF is trading lower against the USD after the SNB kept its interest rate unchanged at 0.0% and maintained its cap on the Franc at 1.20 per EUR, stating that that the Swiss Franc at current level still remains high. The Swiss central bank also reiterated its expectations for the economy to expand 2% this year.
In yesterday’s New York trading session, the greenback traded higher against the key currencies, following Fed’s decision to slow-down the pace of its stimulus measure by another $10 billion and to drop 6.5% unemployment threshold as its sole factor in deciding the future of interest rate. Adding to the positive sentiment were comments from the Fed Chief, Janet Yellen, who projected an earlier-than-expected rise in the interest rates by the mid of 2015.
In the UK, the Chancellor, George Osborne projected Britain’s economy to grow faster than earlier estimates this year. Furthermore, he estimated the economy to add more 1.5 million jobs over next five year and revised down UK budget deficit to 6.6% this year, forecasting the deficit to turn in to a 0.2% surplus by 2018-19.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3802 against the USD, 0.14% lower from the New York close. In economic news, on an annual basis, Germany’s producer price index declined for the seventh successive month in February. During the session, the pair traded at a high of 1.3846 and a low of 1.3804. Yesterday, the EUR traded 0.68% lower against the USD in the New York session, and closed at 1.3822. The USD rose after the Fed in its policy meeting decided to further trim its monthly bond purchased by another $10 billion and gave a hawkish guidance.
The pair is expected to find its first support at 1.3754 and first resistance at 1.3890.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6546 against the USD, 0.08% higher from the New York close. During the session, the pair traded at a high of 1.6571 and a low of 1.6536. Yesterday, the British Pound traded 0.60% lower versus the Dollar in the New York session, and closed at 1.6533. However, losses were limited after the UK Chancellor, George Osborne in his 2014 budget speech, projected a better than previously estimated growth in the UK economy.
The pair is expected to find its first support at 1.6483 and first resistance at 1.6632.
USD JPY
The USD is trading at 102.43 against the JPY at 9:40 GMT this morning, tad higher from the New York close. Earlier today, the BoJ Chief, Kuroda raised the chances for the Japanese economy to reach its 2% inflation target by the end of fiscal 2014 to the beginning of fiscal 2015. During the session, the pair traded at a high of 102.51 and a low of 102.25. In the New York session yesterday, the USD traded 0.82% higher against the JPY, and closed at 102.40.
The pair is expected to find its first support at 101.70 and first resistance at 102.93.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8836 against the Swiss Franc, 0.20% higher from the New York close. The CHF declined after the SNB kept its interest rate unchanged at 0.0% and vowed to keep its cap on the Franc, citing strength in its domestic currency. On the economic front, Swiss trade surplus unexpectedly widened to CHF2.6 billion in February, from a surplus of CHF2.5 billion in the previous month. During the session, the pair traded at a high of 0.8840 and a low of 0.8804. In the New York session yesterday, the USD traded 0.86% higher against the CHF, and closed at 0.8818.
The pair is expected to find its first support at 0.8767 and first resistance at 0.8872.
USD CAD
At 9:40 GMT, the USD is trading at 1.1249 against the CAD, 0.06% higher from the New York close. During the session, the pair traded at a high of 1.1265 and a low of 1.1242. Yesterday, the USD traded 0.64% higher against the CAD in the New York session, and closed at 1.1242. The Loonie came under pressure after Jim Flaherty announced his resignation as the Canadian Finance Minister and after Canada’s wholesales sales data failed to match analysts’ expectations for January.
The pair is expected to find its first support at 1.1176 and first resistance at 1.1297.
AUD USD
The AUD is trading at 0.9035 against the USD, at 9:40 GMT this morning, 0.06% higher from the New York close. A report from the RBA, released overnight, showed that the a 10% real depreciation in the Aussie could increase the nation’s GDP by 1% over the next 2-3 years while a temporary 10% depreciation in the AUD could add 0.25% - 0.5% to the GDP over the next 1-2 years. During the session, the pair traded at a high of 0.9041 and a low of 0.9010. AUD traded 0.97% lower against the USD in the New York session, and closed at 0.9030.
The pair is expected to find its first support at 0.8981 and first resistance at 0.9107.
Gold
At 9:40 GMT, Gold is trading at $1328.08 per ounce, 0.09% lower from the New York close, as traders continued to cheer the Fed’s yesterday’s forecast for an interest rate hike. This morning, Gold traded at a high of $1334.78 and a low of $1325.34 per ounce. In the New York session yesterday, the yellow metal traded 1.05% lower, and closed at $1329.33, as the USD advanced after the Fed’s tapered its stimulus package by another $10 billion and after the Fed Chief, Janet Yellen predicted an interest rate hike in 2015.
Gold has its first support at $1319.38 and first resistance at $1342.73.
Silver
Silver is trading at $20.33 per ounce, 1.40% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $20.72 and a low of $20.24. Silver traded 0.42% lower against the USD in the New York session, and closed at $20.62, as a stronger USD weighed on the demand-outlook of the commodity.
Silver has its first support at $20.08 and first resistance at $20.75.
Crude Oil
At 9:40 GMT, Oil is trading at $100.12 per barrel, 0.30% lower from the New York close. This morning, Oil traded at a high of $100.82 and a low of $100.10. Yesterday, Oil traded 0.28% higher in the New York session, and closed at $100.40, after an official report showed that inventories at Cushing, Oklahoma dropped for a seventh week and after Fed’s optimistic view on the US growth-outlook bolstered the demand-outlook of the commodity. However, the gains were capped after the EIA reported a more-than-expected rise of 5.85 million barrels in the US stockpiles, last week.
It has its first support at $99.45 and first resistance at $100.81.
Economic Snapshot
Germany producer price index remained flat in February
On a monthly basis, the producer price index in Germany remained flat in February, compared to a 0.1% fall reported in the previous month. Markets were expecting the producer price index to rise 0.1% in February.
Switzerland trade surplus rose in February
The Swiss Statistics Office reported that Switzerland posted a trade surplus of CHF 2.62 billion in February, compared to a revised surplus of CHF 2.55 billion recorded in the previous month.
Switzerland kept its interest rate steady
The Swiss National Bank kept its key interest rate unchanged at 0.00%, in line with market expectations.
Japan convenience store sales rose in February
On an annual basis, convenience store sales in Japan climbed 1.0% in February, following a decrease of 0.1% recorded in the preceding month.
Japan is moving steadily toward 2% inflation target, says BoJ’s Kuroda
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, indicated that there is a high chance that consumer prices would reach the central bank's 2.0% inflation target sometime from the end of 2014 to the beginning of 2015. He further highlighted that upward pressure on consumer prices would rise helped by improvements in the supply demand balance, but the positive impact from energy prices would start to fade.
Australia RBA foreign exchange transaction rose in February
The RBA foreign exchange transaction rose to A$369.0 million in February, from a level of A$362.0 million in the previous month.
Happy pips.
