Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
The EUR is trading lower against the USD after data showed that business confidence dropped for the first time in five months in the Euro-zone’s largest economy, Germany, in March. Also earlier today, an ECB official, Jens Weidmann hinted that QE remains an option with the ECB to fight deflation.
The GBP came under pressure after UK’s consumer inflation rate fell to 1.7% in February, the lowest since October 2009. Adding to the negative sentiment was another report that showed the BBA mortgage approvals in the UK unexpectedly declined in February.
In yesterday’s New York session, the USD traded lower against the key currencies, hurt by a downbeat US Markit manufacturing PMI data for March. Negative sentiment was also fuelled after the San Francisco Fed President, John Williams stated that he did not notice any suggestion from the central bank last week on tightening its monetary policy sooner than previously estimated.
In a noteworthy event, the IMF forecasted the Italian economy to expand 0.6%, while the global GDP to rise 3.6% this year. Separately, the IMF also warned the SNB to impose negative interest rate in the economy to curb a further appreciation in the Swiss Franc.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3814 against the USD, 0.16% lower from the New York close. Earlier today, the IFO business climate in Germany declined to a two-month low reading in March. Likewise, the IFO expectations for Germany also fell more than expectations while IFO’s index on Germany’s current assessment surpassed analysts’ estimates for March. During the session, the pair traded at a high of 1.3848 and a low of 1.3816. Yesterday, the EUR traded 0.46% higher against the USD in the New York session, and closed at 1.3836.
The pair is expected to find its first support at 1.3756 and first resistance at 1.3874.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6493 against the USD, tad lower from the New York close. On the economic front, consumer price index in the UK rose in-line with market estimates in February while the BBA mortgage approvals came in below analysts’ expectations for February. During the session, the pair traded at a high of 1.6511 and a low of 1.6490. Yesterday, the British Pound traded tad higher versus the Dollar in the New York session, and closed at 1.6496
The pair is expected to find its first support at 1.6464 and first resistance at 1.6529.
USD JPY
The USD is trading at 102.19 against the JPY at 9:40 GMT this morning, 0.07% lower from the New York close. During the session, the pair traded at a high of 102.36 and a low of 102.17. In the New York session yesterday, the USD traded 0.18% lower against the JPY, and closed at 102.26.
The pair is expected to find its first support at 102.00 and first resistance at 102.46.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8824 against the Swiss Franc, 0.18% higher from the New York close. During the session, the pair traded at a high of 0.8829 and a low of 0.8806. In the New York session yesterday, the USD traded 0.55% lower against the CHF, and closed at 0.8808. Late yesterday, the IMF suggested the Swiss National Bank to opt for negative interest rates to curb a further appreciation in the Swiss Franc, which if not contained could spur deflation threats in the Swiss economy.
The pair is expected to find its first support at 0.8785 and first resistance at 0.8865.
USD CAD
At 9:40 GMT, the USD is trading at 1.1201 against the CAD, 0.07% higher from the New York close. During the session, the pair traded at a high of 1.1208 and a low of 1.1193. Yesterday, the USD traded 0.27% lower against the CAD in the New York session, and closed at 1.1193. The Bank of Canada Deputy Governor, Tim Lane indicated that the central bank is taking steps to shore up governance of CDOR and other important financial benchmarks to contribute to greater financial stability and prevent manipulation scandals.
The pair is expected to find its first support at 1.1176 and first resistance at 1.1234.
AUD USD
The AUD is trading at 0.9147 against the USD, at 9:40 GMT this morning, 0.22% higher from the New York close. During a speech in Sydney, the Reserve Bank of Australia (RBA) Deputy Governor, Philip Lowe, highlighted the need for a weaker exchange rate to promote growth in the economy, however, unlike other RBA officials, he did not mention that the AUD at current level was "uncomfortably high" against its US counterpart. During the session, the pair traded at a high of 0.9160 and a low of 0.9126. AUD traded tad lower against the USD in the New York session, and closed at 0.9127.
The pair is expected to find its first support at 0.9107 and first resistance at 0.9173.
Gold
At 9:40 GMT, Gold is trading at $1314.50 per ounce, 0.43% higher from the New York close, as demand for safe-haven assets rose amid prospects for further sanctions on Russia. This morning, Gold traded at a high of $1317.48 and a low of $1308.75 per ounce. In the New York session yesterday, the yellow metal traded 0.51% lower, and closed at $1308.85, amid bets that rising expectation for an interest rate hike in the US could hamper the demand-outlook of the precious metal.
Gold has its first support at $1306.34 and first resistance at $1324.38.
Silver
Silver is trading at $20.11 per ounce, 0.96% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $20.22 and a low of $19.90. Silver traded 1.05% lower against the USD in the New York session, and closed at $19.91, mirroring losses in the prices of gold.
Silver has its first support at $19.92 and first resistance at $20.28.
Crude Oil
At 9:40 GMT, Oil is trading at $99.87 per barrel, 0.50% higher from the New York close, as lingering tensions between the West and Russia weighed on the supply-outlook of the commodity. This morning, Oil traded at a high of $99.94 and a low of $99.26. Yesterday, Oil traded 0.67% lower in the New York session, and closed at $99.42. However the losses were kept in check after media reports showed that an oil spill caused the closure of the Houston Ship Channel in the US.
It has its first support at $99.29 and first resistance at $100.37.
Economic Snapshot
UK consumer price index rose in line with market estimate in February
On a monthly basis, consumer price index in the UK increased 0.5% in February, in line with market estimates, compared to a 0.6% fall recorded in the previous month. Additionally, on an annual basis, core consumer price index in UK rose 1.7% in February, compared to a 1.6% rise recorded in the previous month.
UK PPI core output rose in February
On a monthly basis, the non-seasonally adjusted PPI core output in the UK rose 0.1% in February, compared to a 0.5% rise recorded in the previous month. Markets were expecting PPI core output to remain flat in February.
Retail price index in UK rose more than market estimate in February
On an annual basis, the retail price index in the UK rose 2.7% in February, higher than market expectation of a 2.6% rise and compared to a 2.8% increase recorded in the previous month.
BBA mortgage approvals in the UK declined unexpectedly in February
The BBA mortgage approvals in the UK dropped to a level of 47.6 K in February, compared to a downwardly revised reading of 49.3 K reported in the previous month. Market had expected mortgage approvals to rise to a level 50.0 K in February.
German Ifo current assessment index climbed in March
The Ifo current assessment index in Germany rose to a level of 115.2 in March, higher than market expectation of a level of 114.6 and compared to a reading of 114.4 reported in the previous month. Meanwhile, the Ifo business climate index in Germany dropped to a level of 110.7 in March, compared to a reading of 111.3 reported in the previous month. Additionally, the Ifo business expectations index in Germany fell to a level of 106.4 in March, compared to a reading of 108.3 reported in the previous month.
France industrial business climate index rose as expected in March
Industrial business climate index in France increased to a level of 95.0 in March, in line with market expectations and compared to a reading of 94.0 reported in the previous month.
Italy Non-EU trade balance swung to a surplus in February
Italy’s (non-EU countries) trade balance has swung to a surplus of €1.4 billion in February, compared to a revised deficit of €0.9 billion reported last month.
Japan small business confidence index rose in March
Small business confidence index in Japan rose to a level of 53.5 in March, compared to a level of 50.6 reported in the previous month.
China CB leading economic index rose at a faster pace in February
The Conference Board (CB) leading economic index for China rose 0.9% in February, following a revised increase of 0.3% recorded in the preceding month.
Happy pips.
