Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies, ahead of the US fourth-quarter GDP and weekly jobless claims data.
Demand for the GBP rose after retail sales in the UK economy rose almost three times more than what economists had forecasted in February as spending on food surged.
The NZD is trading higher against its US counterpart after official data showed that strong Chinese demand for local primary products enabled New Zealand to post its biggest ever trade surplus in February. Meanwhile, the nation’s Finance Minister, Bill English revealed that the NZD is too strong at current level and may be unfavorable for exporters.
In yesterday’s New York trading session the greenback traded mostly lower against the key currencies. However, the USD pared some of its initial losses after data showed that durable goods orders rose at a faster pace than market expectations for February. Meanwhile, the St. Louis Fed Chief, James Bullard hinted towards the possibility of a bubble formation in the US economy as the Fed unwinds its stimulus measures while opining that raising inflation target from 2% to 4% would not be a good idea.
In the Euro-zone, an ECB Governing Council member, Luis Maria Linde stated that at present he sees a low risk of deflation in the Euro-zone economy, but at the same time he also warned that the economy could witness deflation in the coming future.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3756 against the USD, 0.22% lower from the New York close. In economic news, M3 money supply in the Euro-zone grew at an annual pace of 1.3% last month while lending to households and firms shrank further in February. During the session, the pair traded at a high of 1.3798 and a low of 1.3758. Yesterday, the EUR traded marginally lower against the USD in the New York session, and closed at 1.3787, as traders mulled the prospect of additional stimulus measures by the ECB amid lack of strong economic signals from the Euro-zone economy.
The pair is expected to find its first support at 1.3736 and first resistance at 1.3793.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6623 against the USD, 0.24% higher from the New York close, after data showed that retail sales rose in the UK rose more than expected in February. During the session, the pair traded at a high of 1.6641 and a low of 1.6564. Yesterday, the British Pound traded 0.24% higher versus the Dollar in the New York session, and closed at 1.6583, after a BoE policymaker, Martin Weale hinted that a pick-up in Britain’s economic recovery could lead to a gradual rise in the nation’s benchmark interest rate.
The pair is expected to find its first support at 1.6551 and first resistance at 1.6668.
USD JPY
The USD is trading at 102.17 against the JPY at 9:40 GMT this morning, 0.11% higher from the New York close. During the session, the pair traded at a high of 102.30 and a low of 101.80. In the New York session yesterday, the USD traded 0.35% lower against the JPY, and closed at 102.06. Late yesterday, Japan’s Economics Minister Akira Amari stated that the BoJ still has a role to play in the y eradication of deflation in the economy to a great extent. However, he did not pressurize the central bank for additional stimulus measures immediately.
The pair is expected to find its first support at 101.77 and first resistance at 102.53.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8862 against the Swiss Franc, 0.15% higher from the New York close. During the session, the pair traded at a high of 0.8872 and a low of 0.8847. In the New York session yesterday, the USD traded 0.10% lower against the CHF, and closed at 0.8849. Yesterday, the SNB, in its quarterly bulletin, indicated that it would maintain its minimum exchange rate of CHF 1.20 per EUR as the CHF at current level remains still high. The central bank also highlighted its readiness to undertake further policy measures to keep the minimum exchange rate intact.
The pair is expected to find its first support at 0.8839 and first resistance at 0.8878.
USD CAD
At 9:40 GMT, the USD is trading at 1.1095 against the CAD, 0.08% lower from the New York close. During the session, the pair traded at a high of 1.1108 and a low of 1.1085. Yesterday, the USD traded 0.51% lower against the CAD in the New York session, and closed at 1.1104.
The pair is expected to find its first support at 1.1055 and first resistance at 1.1153.
AUD USD
The AUD is trading at 0.9231 against the USD, at 9:40 GMT this morning, 0.08% higher from the New York close. During the session, the pair traded at a high of 0.9246 and a low of 0.9219. AUD traded 0.17% lower against the USD in the New York session, and closed at 0.9224, giving back its initial gains, arising from the RBA Governor, Glenn Stevens’ optimistic outlook on the growth of the Australian economy.
The pair is expected to find its first support at 0.9214 and first resistance at 0.9247.
Gold
At 9:40 GMT, Gold is trading at $1294.29 per ounce, 0.79% lower from the New York close. This morning, Gold traded at a high of $1306.95 and a low of $1291.61 per ounce. In the New York session yesterday, the yellow metal traded 0.57% lower, and closed at $1304.56, as the latest batch of upbeat economic releases from the US dampened the demand for safe-haven assets. However, the losses were limited after a leading broking house upped its 2014 gold-price forecast to $1,250 per ounce from $1,205.
Gold has its first support at $1285.10 and first resistance at $1309.98.
Silver
Silver is trading at $19.67 per ounce, 0.54% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.86 and a low of $19.58. Silver traded 1.23% lower against the USD in the New York session, and closed at $19.78, mirroring losses in the prices of industrial metals.
Silver has its first support at $19.45 and first resistance at $20.01.
Crude Oil
At 9:40 GMT, Oil is trading at $100.20 per barrel, tad higher from the New York close. This morning, Oil traded at a high of $100.41 and a low of $100.03. Yesterday, Oil traded 0.48% higher in the New York session, and closed at $100.18, after data showed that crude stockpiles at Cushing, Oklahoma, declined for an eighth week and after another report showed that political unrest triggered a fall in Libya’s oil output. However, the gains were capped after the EIA reported a more-than-expected rise of 6.6 million barrels in the US crude supplies last week.
It has its first support at $99.46 and first resistance at $100.70.
Economic Snapshot
UK retail sales rose more than market estimate in February
On an annual basis, retail sales in UK rose 3.7% in February, compared to a revised rise of 3.9% recorded in the previous month. Markets were expecting retail sales to rise 2.4% in February. Meanwhile, on an annual basis, retail sales ex-fuel in UK rose 4.2% in February, compared to a revised rise of 4.4% recorded in the previous month.
Euro zone M3 money supply rose in line with market expectation
On an annual basis, M3 money supply in the Euro-zone rose 1.3% in February, in line with market expectations, following a rise of 1.2% recorded in the preceding month. Meanwhile, on an annual basis, private sector loans in the Euro-zone fell 2.2% in February, compared to a revised fall of 2.3% recorded in the previous month.
France consumer confidence rose unexpectedly in March
The consumer confidence index in France advanced to a level of 88.0 in March, compared to a reading of 85.0 reported in the previous month. Market had expected the consumer confidence index to remain steady in March.
Italy business confidence rose less than market estimate
Business confidence index in Italy edged up to a level of 99.2 in March, less than market expectation of a level of 99.5 but higher than a reading of 99.1 reported in the previous month.
Enough room for debate on efficiency of the Fed policies, indicated Fed’s Bullard
The Federal Reserve (Fed) Bank of St. Louis President, James Bullard, opined that although the central bank’s unconventional monetary policy has been effective, it has contributed to unnecessary global volatility and there remains sufficient room for debate on the issue.
Australia’s housing affordability index fell in the Q4 2013
The Commonwealth Bank of Australia Housing Industry Association (CBAHIA) has reported that the CBAHIA house affordability index in Australia dropped to a reading of 74.7 in Q4 2013, from a level of 75.1 in the previous quarter.
China industrial profits rose at a slower pace in February
On a year to date basis, industrial profits in China rose 9.4% for the first two months of 2014, compared to a 12.2% increase reported for the year 2013.
Happy pips.
