Forex Market Update
This morning, the greenback is trading mostly higher against most of the major currencies.
The EUR is trading lower, extending its yesterday’s losses as ECB policymakers, including Yves Mersch and Ewald Nowotny predicted inflation rate in the Euro-zone to remain low for an extended period of time while Bundesbank slashed its growth estimate on Germany.
The GBP benefitted from a report that showed UK’s annual consumer inflation rate surpassed expectations and rose to 1.8% in April. Meanwhile, the UK Prime Minister, David Cameron echoed BoE’s view that booming housing sector would pose a risk to the nation’s recovery and assured that his government would make changes to its 'Help to Buy' programme to contain this risk.
The AUD lost ground after the minutes from the RBA latest policy meeting highlighted policymakers’ view for interest rate in Australia to remain low for some more time and as the RBA’s Assistant Governor, Guy Debelle projected the weakness in capital inflows to trigger depreciation in the Aussie.
In Yesterday’s New York session, the greenback traded higher against the key currencies, as the San Francisco Fed President, John Williams forecasted interest rate in the US to rise sometime in 2015 while highlighting his expectations for the Fed to refrain from altering the tapering pace of its QE programme unless for a dramatic change in economic outlook.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3698 against the USD, 0.08% lower from the New York close. In data, Germany’s producer price index unexpectedly fell 0.1% (MoM) in April while Italy’s industrial orders and sales rose to a seasonally adjusted 1.3% and 0.3%, respectively in March. During the session, the pair traded at a high of 1.3715 and a low of 1.3706. Yesterday, the EUR traded 0.11% lower against the USD in the New York session, and closed at 1.3709, as few ECB policymakers projected inflation rate in the Euro-zone to remain low for a prolonged period of time.
The pair is expected to find its first support at 1.3672 and first resistance at 1.3730.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6834 against the USD, 0.12% higher from the New York close, benefitted from a report that showed consumer inflation rate in the UK rose at a faster than expected pace in April. However, UK’s producer prices and retail price index failed to match analysts’ expectations for last month. During the session, the pair traded at a high of 1.6822 and a low of 1.6812. Yesterday, the British Pound traded 0.14% lower versus the Dollar in the New York session, and closed at 1.6814.
The pair is expected to find its first support at 1.6802 and first resistance at 1.6867.
USD JPY
The USD is trading at 101.32 against the JPY at 9:40 GMT this morning, 0.15% lower from the New York close. Data released overnight showed that, Japan’s leading economic index fell to the lowest level in a year while its coincident index surpassed market estimates for March. Meanwhile Japan’s all industry activity index rebounded at a slower-than-expected pace in March. During the session, the pair traded at a high of 101.61 and a low of 101.43. In the New York session yesterday, the USD traded 0.32% higher against the JPY, and closed at 101.46.
The pair is expected to find its first support at 101.07 and first resistance at 101.58.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8924 against the Swiss Franc, a tad higher from the New York close. Earlier today, the SNB President, Thomas Jordan urged that proper measures should be undertaken in order to bring stability in the Swiss banking industry. During the session, the pair traded at a high of 0.8931 and a low of 0.8921. In the New York session yesterday, the USD traded 0.15% higher against the CHF, and closed at 0.8922.
The pair is expected to find its first support at 0.8906 and first resistance at 0.8942.
USD CAD
At 9:40 GMT, the USD is trading at 1.0889 against the CAD, 0.15% higher from the New York close. Traders look ahead to the releases of Canada’s wholesale sales data, for further cues in the Loonie. During the session, the pair traded at a high of 1.0884 and a low of 1.0874. Yesterday, the USD traded 0.09% higher against the CAD in the New York session, and closed at 1.0873, in a thin-holiday trading session.
The pair is expected to find its first support at 1.0862 and first resistance at 1.0904.
AUD USD
The AUD is trading at 0.9270 against the USD, at 9:40 GMT this morning, 0.65% lower from the New York close, following the release of the minutes from the RBA’s May policy meeting and after the RBA Dy. Governor, Guy Debelle cautioned that a slowdown in capital inflows could trigger a depreciation in the Aussie. Meanwhile, data showed that Australia’s CB leading indicator registered a flat reading in March. During the session, the pair traded at a high of 0.9337 and a low of 0.9277. AUD traded 0.31% lower against the USD in the New York session, and closed at 0.9331.
The pair is expected to find its first support at 0.9229 and first resistance at 0.9340.
Gold
At 9:40 GMT, Gold is trading at $1291.70 per ounce, 0.13% lower from the New York close, after the World Gold Council reported that gold demand in China and India, the world’s largest importers of gold, fell in the first quarter of 2014. This morning, Gold traded at a high of $1294.90 and a low of $1287.80 per ounce. In the New York session yesterday, the yellow metal traded 0.75% lower, and closed at $1293.40. However, speculation for easing of gold-import norms in India kept the commodity’s losses in check.
Gold has its first support at $1284.43 and first resistance at $1302.33.
Silver
Silver is trading at $19.36 per ounce, marginally lower from the New York close, at 9:40 GMT this morning, tracking losses in gold prices. This morning, Silver traded at a high of $19.40 and a low of $19.28. Silver traded 1.25% lower against the USD in the New York session, and closed at $19.37.
Silver has its first support at $19.20 and first resistance at $19.60.
Crude Oil
At 9:40 GMT, Oil is trading at $102.60 per barrel, slightly higher from the New York close. This morning, Oil traded at a high of $102.76 and a low of $102.47. Yesterday, Oil traded 0.23% lower in the New York session, and closed at $102.56. However, fresh outburst of violence in Libya and lingering concerns on the Ukraine crisis weighed on the supply-outlook of the commodity.
It has its first support at $102.35 and first resistance at $102.97.
Economic Snapshot
UK consumer price index rose more than expectations in April
On a monthly basis, the consumer price index in the UK rose 0.4% in April, compared to a 0.2% rise recorded in the previous month. Markets were expecting the consumer price index to rise 0.3% in April.
UK retail price index rose less than market estimates in April
On a monthly basis, the retail price index in the UK rose 0.4% to a level of 255.7 in April, compared to a 0.2% increase in the previous month. Markets were expecting the retail price index to rise 0.5% in April.
UK ONS house price index advanced in March
On an annual basis, the ONS house price index in the UK rose 8.0% in March, following a revised increase of 9.2% recorded in the preceding month.
UK output producer price index unexpectedly remained steady in April
The non-seasonally adjusted monthly output producer price index (PPI) in the UK remained steady (0.0%) in April, compared to a 0.2% rise recorded in the previous month. Markets were expecting the output producer price index to rise 0.2% in April.
Germany’s producer price index declined in April
On a monthly basis, the producer price index in Germany fell 0.1% in April, compared to 0.3% fall in the previous month.
Italy’s industrial sales rebounded in March
On a seasonally adjusted monthly basis, industrial sales in Italy rose 0.3% in March, following a revised decrease of 1.4% recorded in the preceding month. Meanwhile, on a monthly basis, the seasonally industrial orders in Italy climbed 1.3% in March, compared to a revised 3.2% decrease recorded in the previous month.
Japan’s all industry activity index rose less than anticipated in March
On a monthly basis, the all industry activity index in Japan rose 1.5% in March, less than market expectations of a 1.6% increase and compared to a 1.1% decrease recorded in the preceding month.
Japan’s final leading economic index fell in March
The leading economic index in Japan dropped to a level of 107.1 in March, compared to a revised level of 108.5 reported in the previous month. Meanwhile, the final coincident index rose to a level of 114.5 in March, compared to a level of 112.9 recorded in the previous month.
Australia’s CB leading index remained steady in March
The CB leading index in Australia remained steady in March, compared to a revised 0.2% rise recorded in the previous month.
RBA expects low rates to remain in place "for some time yet", indicated RBA minutes
The minutes of the Reserve Bank of Australia’s (RBA) May monetary policy meeting revealed that the current accommodative monetary policy continues to have the “expected effects” on economic activity and is expected to remain in place for some time yet.
Decline in capital inflows could further weaken the Australian dollar, indicated RBA Debelle
The RBA Assistant Governor, Guy Debelle, stated that capital inflow in Australia are likely to weaken in the period ahead, on the back of slowing mining investment which mostly foreign funded.
Good trades.
