Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies. Earlier today, the Chicago Fed President, Charles Evans, citing current low inflation and high unemployment rate in the US economy, projected the Fed to keep its interest rates at rock bottom until late 2015.
The EUR pared some of its initial losses after data showed that economic sentiment indicator in the Euro-zone rose more than expected in March to reach its highest level since July 2011.
The GBP initially came under pressure after the UK’s current account deficit barely narrowed in the fourth quarter from the record wide gap in the third quarter. However, the GBP reversed its losses after data showed that GDP came in line with market estimates for the fourth quarter.
The greenback traded mixed in the New York session yesterday, against the key currencies, amid a mixed batch of economic releases in the US economy. Data showed that US GDP rose faster than the preliminary estimate in the fourth quarter while the jobless claims unexpectedly came in at a four-month low reading last week. However, pending home sales in the US fell for an eighth consecutive month in February.
Separately, the Cleveland Fed President, Sandra Pianalto projected an optimistic outlook for the US economy but at the same time also opined that the economy is still short of the Fed’s employment and inflation goal.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3724 against the USD, 0.13% lower from the New York close, after data revealed that Spanish retail sales disappointed in February and consumer prices registered its first decline since October 2009. Meanwhile, the Euro-zone’s economic sentiment indicator and consumer confidence both showed an improvement in March. During the session, the pair traded at a high of 1.3753 and a low of 1.3714. Yesterday, the EUR traded 0.14% lower against the USD in the New York session, and closed at 1.3742.
The pair is expected to find its first support at 1.3693 and first resistance at 1.3768.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6611 against the USD, tad higher from the New York close, after data showed that UK’s fourth-quarter GDP rose 2.7% (YoY) in line with market estimates while the Gfk consumer confidence in the UK improved to a level best seen since August 2007 in March. During the session, the pair traded at a high of 1.6632 and a low of 1.6607. Yesterday, the British Pound traded 0.09% lower versus the Dollar in the New York session, and closed at 1.6608.
The pair is expected to find its first support at 1.6589 and first resistance at 1.6640.
USD JPY
The USD is trading at 102.30 against the JPY at 9:40 GMT this morning, 0.07% higher from the New York close. Data released overnight showed that, Japan’s annual national CPI rose 1.5% in February while unemployment rate declined to 3.6% last month. Separately, retail sales in Japan also rose more than market expectation in February. During the session, the pair traded at a high of 102.33 and a low of 102.11. In the New York session yesterday, the USD traded 0.07% lower against the JPY, and closed at 102.22.
The pair is expected to find its first support at 102.04 and first resistance at 102.50.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8884 against the Swiss Franc, 0.18% higher from the New York close. During the session, the pair traded at a high of 0.8900 and a low of 0.8866. In the New York session yesterday, the USD traded 0.10% higher against the CHF, and closed at 0.8868. Late Thursday, SNB’s Fritz Zurbruegg indicated that the central bank is ready to use variety of measures, including a negative interest rate to defend its cap on the Swiss franc.
The pair is expected to find its first support at 0.8850 and first resistance at 0.8909.
USD CAD
At 9:40 GMT, the USD is trading at 1.1014 against the CAD, 0.18% lower from the New York close. During the session, the pair traded at a high of 1.1036 and a low of 1.1005. Yesterday, the USD traded 0.58% lower against the CAD in the New York session, and closed at 1.1034.
The pair is expected to find its first support at 1.0973 and first resistance at 1.1081.
AUD USD
The AUD is trading at 0.9264 against the USD, at 9:40 GMT this morning, marginally higher from the New York close, benefited from China's Premier, Li Keqiang supportive comments on the growth-outlook of the Chinese economy. During the session, the pair traded at a high of 0.9297 and a low of 0.9259. AUD traded 0.29% higher against the USD in the New York session, and closed at 0.9260.
The pair is expected to find its first support at 0.9227 and first resistance at 0.9299.
Gold
At 9:40 GMT, Gold is trading at $1297.15 per ounce, 0.46% higher from the New York close. This morning, Gold traded at a high of $1299.02 and a low of $1290.92 per ounce. In the New York session yesterday, the yellow metal traded 0.36% lower, and closed at $1291.17, on the back of a strong US Dollar. Meanwhile, one of the leading broking houses trimmed its 2014 average price for spot gold by 8% to $1,225 an ounce.
Gold has its first support at $1290.86 and first resistance at $1301.80.
Silver
Silver is trading at $19.84 per ounce, 0.62% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.93 and a low of $19.72. Silver traded 0.17% higher against the USD in the New York session, and closed at $19.72. A leading broker cut its 2014 spot silver price forecast by 5% to $19.40.
Silver has its first support at $19.65 and first resistance at $19.98.
Crude Oil
At 9:40 GMT, Oil is trading at $101.74 per barrel, 0.50% higher from the New York close, amid lingering concerns on the supply outlook of the commodity. This morning, Oil traded at a high of $101.76 and a low of $101.18. Yesterday, Oil traded 0.09% higher in the New York session, and closed at $101.25, amid speculation that a strong domestic GDP data could spur demand for crude oil in the US.
It has its first support at $100.63 and first resistance at $102.30.
Economic Snapshot
UK Gfk consumer confidence improved more than anticipated in March
The GfK consumer confidence index in UK improved to a level of -5.0 in March, more than market forecasts and compared to a level of -7.0 recorded in the previous month.
UK economy expanded in line with the preliminary estimate in Q4 2013
On an annual basis, the final GDP in UK rose 2.7% in the Q4 2013, in line with preliminary estimate, following a 1.9% rise recorded in the previous quarter. Additionally, on a quarterly basis, final total business investment in the UK rose 2.4% in the Q4 2013, in line with preliminary estimate, following an increase of 2.0% recorded in the preceding quarter.
UK current account deficit narrowed in Q4 2013
The National Statistics has reported that UK’s current account deficit narrowed to £22.4 billion in Q4 2013, less than market estimates and compared to a revised deficit of £22.8 billion recorded in the previous quarter.
Industrial confidence in the Euro-zone improved unexpectedly in March
The industrial confidence index in the Euro-zone rose to a level of -3.3 in March, contradicting market estimates for the index to remain unchanged at previous month’s revised reading of -3.5. Meanwhile, the economic sentiment indicator in the Euro-zone rose to a level of 102.4 in March, compared to reading of 101.2 reported in the previous month. Additionally, the final consumer confidence in the Euro-zone came in unchanged at previous month’s revised reading of -9.3 in March.
Spain’s CPI unexpectedly fell in March
On an annual basis, the preliminary consumer price index (CPI) in Spain fell 0.2% in March, compared to a flat change recorded in the previous month. Market had expected the index to remain steady in March. Meanwhile, on a seasonally adjusted basis, retail sales in Spain dropped 0.5% in February on a yearly basis, in line with market expectations and following a rise of 0.5% recorded in the preceding month.
Swiss economy likely to witness steady growth until the next year, indicated KOF Institute spring economic forecast
According to KOF Institute spring economic forecast 2014, the Swiss economy is anticipated to grow steadily until the end of next year. The report indicated that the gross domestic product of Switzerland is expected to rise 2.0% in 2014 and 2.1% in 2015.
No rise in interest rate likely until second half of 2015, indicated Fed’s Evans
The Federal Reserve (Fed) Bank of Chicago President, Charles Evans, opined that the US Fed would have to maintain interest rates at the present record low levels until late 2015, given the low inflation and still-high unemployment rate in the US.
Happy pips.
