Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies, ahead of the PMI data and update on new home sales in the US.
The EUR is trading higher against the USD, buoyed by upbeat Markit PMI for the Euro-zone and Germany. However, yesterday, the EUR came under pressure after ECB’s Benoit Coeure hinted that the central bank still has room for lower interest rates and several other instruments to loosen policy.
In the UK, the BoE minutes revealed that policymakers voted unanimously to keep policy unchanged at its April policy meeting; however, they remained divided over the amount of slackness in the UK labor market and over the inflation outlook.
The AUD lost ground after Australia’s consumer price index rose less than economists’ forecast for the first quarter and after China’s HSBC manufacturing PMI remained in the contraction territory in April.
In Yesterday’s New York session, the greenback traded mostly higher against the key currencies, following the latest batch of strong economic releases from the US economy. Separately, former Fed Chairman, Ben Bernanke opined that the US was making considerable progress, rebounding from the headwinds that the nation witnessed during the financial crisis.
In a noteworthy event, the DBRS Inc. upgraded its outlook on the US economy’s “AAA” sovereign ranking to “stable” from “negative.”
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3845 against the USD, 0.27% higher from the New York close, after Markit Economics reported that Euro-zone’s composite PMI jumped to a 3-year high reading in April while its manufacturing and service PMI also rose more than expected this month. Additionally, German PMI numbers also topped expectations in April. During the session, the pair traded at a high of 1.3856 and a low of 1.3804. Yesterday, the EUR traded 0.09% lower against the USD in the New York session, and closed at 1.3808.
The pair is expected to find its first support at 1.3803 and first resistance at 1.3871.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6813 against the USD, 0.07% lower from the New York close. Earlier today, minutes from the BoE’s 9 April policy meeting showed that economic recovery in Britain is gaining momentum but also highlighted policymakers’ concerns over the slack in the labor market in the economy. Separately, the UK budget deficit in March sank to its lowest since the financial crisis. During the session, the pair traded at a high of 1.6837 and a low of 1.6805. Yesterday, the British Pound traded tad higher versus the Dollar in the New York session, and closed at 1.6825.
The pair is expected to find its first support at 1.6795 and first resistance at 1.6836.
USD JPY
The USD is trading at 102.48 against the JPY at 9:40 GMT this morning, 0.13% lower from the New York close. Early morning, BoJ Governor, Haruhiko Kuroda opined that consumer inflation in Japan might have exceeded the BoJ’s 0.7% forecast for FY 2013. Separately, the BoJ Dy. Governor, Hiroshi Nakaso stated that the Japanese economy is well able to withstand the effects of a sale-tax hike. During the session, the pair traded at a high of 102.71 and a low of 102.49. In the New York session yesterday, the USD traded 0.11% higher against the JPY, and closed at 102.61.
The pair is expected to find its first support at 102.38 and first resistance at 102.64.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8815 against the Swiss Franc, 0.38% lower from the New York close. Amid lack of economic releases from Switzerland later today, traders await the Swiss trade balance data, slated for release tomorrow. During the session, the pair traded at a high of 0.8855 and a low of 0.8817. In the New York session yesterday, the USD traded 0.12% higher against the CHF, and closed at 0.8849.
The pair is expected to find its first support at 0.8796 and first resistance at 0.8849.
USD CAD
At 9:40 GMT, the USD is trading at 1.1036 against the CAD, 0.05% higher from the New York close, ahead of the Statistics Canada’s report on Canada’s retail sales for February. During the session, the pair traded at a high of 1.1049 and a low of 1.1029. Yesterday, the USD traded 0.18% higher against the CAD in the New York session, and closed at 1.1030. On the economic front, Canada’s monthly wholesale sales rose more than market expectations to the highest level on record in February.
The pair is expected to find its first support at 1.1006 and first resistance at 1.1058.
AUD USD
The AUD is trading at 0.9280 against the USD, at 9:40 GMT this morning, 0.90% lower from the New York close, hurt by downbeat Australian consumer inflation and China’s manufacturing PMI data. During the session, the pair traded at a high of 0.9379 and a low of 0.9277. AUD traded marginally lower against the USD in the New York session, and closed at 0.9364.
The pair is expected to find its first support at 0.9239 and first resistance at 0.9350.
Gold
At 9:40 GMT, Gold is trading at $1284.10 per ounce, tad lower from the New York close. However, earlier the yellow metal rose as lingering concerns on the Ukraine crisis overshadowed optimism on the US economic recovery. This morning, Gold traded at a high of $1287.50 and a low of $1282.10 per ounce. In the New York session yesterday, the yellow metal traded 0.38% lower, and closed at $1284.20, as traders favored the rally in the US equity markets over the safe-haven metal.
Gold has its first support at $1275.57 and first resistance at $1292.87.
Silver
Silver is trading at $19.47 per ounce, 0.15% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.54 and a low of $19.42. Silver traded slightly higher against the USD in the New York session, and closed at $19.44, amid strong demand for industrial metals.
Silver has its first support at $19.35 and first resistance at $19.57.
Crude Oil
At 9:40 GMT, Oil is trading at $101.27 per barrel, 0.60% lower from the New York close, following a lackluster Chinese manufacturing PMI data for April and on growing speculation that the government weekly report on the US crude stockpiles to be released later today could exceed an all-time high, on the back of rise in domestic oil production. This morning, Oil traded at a high of $101.99 and a low of $101.20. Yesterday, Oil traded 0.62% lower in the New York session, and closed at $101.91. Late Tuesday, the API reported a climb of 519,000 barrels in the US crude supplies last week.
It has its first support at $100.54 and first resistance at $102.66.
Economic Snapshot
UK public sector net borrowing lower than expected in March
UK public sector net borrowing recorded a deficit of £4.9 billion in March, following a revised deficit of £7.0 billion reported in February. Market had expected UK public sector net borrowing deficit of £9.1 billion in March.
BoE MPC members voted unanimous to keep the monetary policy unchanged, indicated BoE minutes
The minutes of the Bank of England’s (BoE) monetary policy meeting held on 9 April 2014 indicated that the central bank officials voted unanimously to keep the benchmark interest rate unchanged at 0.5% and maintain the assets purchase programme at £375.0 billion.
Euro-zone preliminary services PMI rose in April
The Markit preliminary services purchasing managers’ index (PMI) in the Euro-zone rose to a reading of 53.1 in April, following a final reading of 52.2 in the previous month. Meanwhile, the preliminary manufacturing PMI in the Euro-zone rose to reading of 53.3 in April, from a final reading of 53.0 in the previous month. Likewise, Euro-zone’s preliminary composite PMI rose to a reading of 54.0 in April, compared to a final reading of 53.1 in the previous month.
German preliminary services and manufacturing PMIs rose more than expected in April
Markit Economics reported that the preliminary services purchasing managers’ index (PMI) in Germany increased to a reading of 55.0 in April, compared to a final reading of 53.0 reported in the previous month. Market had expected the index to rise to a reading of 53.3 in April. Meanwhile, the preliminary manufacturing purchasing managers’ index (PMI) in Germany rose to reading of 54.2 in April, more than market forecasts and compared to a final reading of 53.7 reported in the previous month.
France preliminary services and manufacturing PMIs fell in April
Markit Economics reported that the preliminary services purchasing managers’ index (PMI) in France dropped to a reading of 50.3 in April, compared to a final reading of 51.5 reported in the previous month. Meanwhile, the preliminary manufacturing purchasing managers’ index (PMI) in France fell to a reading of 50.9 in April, following a reading of 52.1 in the previous month.
Kuroda reiterated 2% inflation target
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, reinforced that the central bank is on track to achieve its 2% inflation target, while stating that inflation in the previous fiscal ended March may slightly exceed the BoJ’s projection.
Australia CPI rose less than anticipated in the Q1 2014
On an annual basis, Australia’s consumer price index (CPI) increased 2.9% in Q1 2014, compared to a 2.7% rise recorded in the previous quarter. Market had expected the consumer price index to rise 3.2% in the first quarter of 2014. Additionally, the Reserve Bank of Australia (RBA) reported that on an annual basis, the RBA weighted median consumer price index in Australia advanced 2.7% in Q1 2014, following a revised rise of 2.5% recorded in the preceding quarter.
China preliminary Markit manufacturing PMI rose as expected in April
Markit Economics reported that the preliminary manufacturing Purchasing Managers’ Index (PMI) in China rose to a reading of 48.3 in April, in line with market forecasts and compared to a final reading of 48.0 reported in the previous month.
Good trades.
