Forex Market Update
This morning, the greenback is trading mostly higher against most of the major currencies.
The EUR is trading lower against its US counterpart, extending its previous session’s losses which were triggered by dovish comments from the ECB President, Mario Draghi, who again expressed willingness of the central bank to ease its policy further at its next policy meeting in June to fight deflation threats in the region. Separately, another ECB policymaker, Ewald Nowotny opined that a prolonged period of low inflation in the Euro-zone has contributed to the deflation risks in the economy.
The NZD lost ground against the USD after data showed that the ANZ business confidence in New Zealand deteriorated for the third-straight month in May even as outlook on general business prospects remained positive.
Yesterday, in the New York session, the greenback traded mostly higher against the key currencies, buoyed by the latest batch of strong economic releases from the US economy. However, the Atlanta Fed President, Dennis Lockhart indicated that the US central bank was not at all in a rush to raise its interest rates despite his expectations for the US economy to expand around 3.0% this year.
In a noteworthy development, the IMF expressed an optimistic outlook on the growth of the Spanish economy but, at the same time, urged the ECB to ease its policy further to assist recovery in Spain and in the Euro-zone economy as a whole.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3625 against the USD, 0.08% lower from the New York close, as the number of unemployed people in Germany unexpectedly rose by 24,000 in May. However, economic sentiment and business confidence in the Euro-zone economy rose more than market estimates while consumer confidence came in line with the initial reading in May. During the session, the pair traded at a high of 1.3639 and a low of 1.3620. Yesterday, the EUR traded a tad lower against the USD in the New York session, and closed at 1.3636.
The pair is expected to find its first support at 1.3605 and first resistance at 1.3652.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6773 against the USD, 0.21% lower from the New York close. During the session, the pair traded at a high of 1.6817 and a low of 1.6768. Yesterday, the British Pound traded marginally lower versus the Dollar in the New York session, and closed at 1.6809. Late Tuesday, the BoE Governor, Mark Carney, urged authorities to formulate measures to curb growing global inequalities while indicating that policymakers have developed tools to address the “too big to fail” issue without disrupting the financial system.
The pair is expected to find its first support at 1.6744 and first resistance at 1.6819.
USD JPY
The USD is trading at 101.89 against the JPY at 9:40 GMT this morning, 0.13% lower from the New York close. Early morning, the BoJ Governor, Haruhiko Kuroda, in a BoJ conference, highlighted the possibility for the central bank to implement easing policy even when the policy rate is around 0.0%. During the session, the pair traded at a high of 102.05 and a low of 101.85. In the New York session yesterday, the USD traded 0.08% higher against the JPY, and closed at 102.02.
The pair is expected to find its first support at 101.74 and first resistance at 102.10.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8980 against the Swiss Franc, 0.14% higher from the New York close. In economic news, the Swiss economy expanded by a seasonally adjusted 0.5% (QoQ) in the first quarter while the UBS consumption indicator in Switzerland edged down to a reading of 1.72 in April, but yet remained as the second highest reading since January 2011. During the session, the pair traded at a high of 0.8984 and a low of 0.8967. In the New York session yesterday, the USD traded 0.08% higher against the CHF, and closed at 0.8967.
The pair is expected to find its first support at 0.8955 and first resistance at 0.8995.
USD CAD
At 9:40 GMT, the USD is trading at 1.0853 against the CAD, 0.06% lower from the New York close. During the session, the pair traded at a high of 1.0867 and a low of 1.0847. Yesterday, the USD traded 0.13% higher against the CAD in the New York session, and closed at 1.0860.
The pair is expected to find its first support at 1.0831 and first resistance at 1.0875.
AUD USD
The AUD is trading at 0.9247 against the USD, at 9:40 GMT this morning, 0.12% lower from the New York close. Data released overnight showed that the Westpac leading index in Australia fell 0.5% to a reading of 98.0 in April while the total construction work done in the Australian economy in the first quarter rose 0.3%. During the session, the pair traded at a high of 0.9273 and a low of 0.9241. AUD traded slightly higher against the USD in the New York session, and closed at 0.9258.
The pair is expected to find its first support at 0.9228 and first resistance at 0.9269.
Gold
At 9:40 GMT, Gold is trading at $1265.80 per ounce, 0.08% higher from the New York close. This morning, Gold traded at a high of $1266.60 and a low of $1260.80 per ounce. In the New York session yesterday, the yellow metal traded 0.98% lower and closed at $1264.80, amid strong economic releases from the US economy and following a rally in the US equity markets. However, a rise in the holding of the SPDR Gold Trust and escalating violence in Ukraine underpinned losses in gold prices.
Gold has its first support at $1256.13 and first resistance at $1280.13.
Silver
Silver is trading at $19.15 per ounce, 0.39% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.15 and a low of $19.04. Silver traded 0.31% lower against the USD in the New York session, and closed at $19.08, taking cues from losses in gold prices.
Silver has its first support at $19.02 and first resistance at $19.30.
Crude Oil
At 9:40 GMT, Oil is trading at $104.33 per barrel, 0.20% higher from the New York close, ahead of the API weekly data on the US crude stockpiles. This morning, Oil traded at a high of $104.39 and a low of $104.05. Yesterday, Oil traded 0.17% lower in the New York session, and closed at $104.10, amid profit-taking. However, mounting concerns on Libya’s supply outlook and escalating violent clash between Ukraine and pro-Russian rebels, kept the commodity’s losses in check.
It has its first support at $103.80 and first resistance at $104.62.
Economic Snapshot
Euro-zone M3 money supply rose at a slower pace in April
On an annual basis, M3 money supply in the Euro-zone rose 0.8% in April, less than market forecasts and following a rise of 1.1% recorded in the preceding month.
Euro-zone final consumer confidence rose in line with the preliminary estimate in May
The final consumer confidence index in the Euro-zone rose to a level of -7.1 in May, in line with the preliminary estimate and compared to a reading of -8.6 reported in the previous month.
Euro-zone business climate rose more than expectations in May
The business climate indicator in the Euro-zone rose to a level of 0.37 in May, more than market expectations of a rise to a level of 0.30 and compared to a revised reading of 0.28 reported in the previous month. Additionally, the economic sentiment indicator in the Euro-zone rose to a level of 102.7 in May, compared to a reading of 102.0 reported in the previous month.
Germany’s unemployment rate remained steady in May
On a seasonally adjusted basis, unemployment rate in Germany remained unchanged at 6.7% in May. However, the number of people unemployed in Germany rose by 24.0K in May, compared to a decline of 25.0K reported in the previous month.
French consumer spending declined in April
On a monthly basis, consumer spending in France fell 0.3% in April, following a revised rise of 0.6% recorded in the preceding month.
Italy business confidence remained steady in May
The business confidence index in Italy remained steady at 99.7 in May, compared to a revised similar reading in the previous month.
Spanish retail sales rose in April
On an annual basis, seasonally adjusted retail sales in Spain rose 0.7% in April, compared to a 0.5% decline in the previous month.
Swiss UBS consumption indicator eased in April
The UBS consumption indicator in Switzerland fell to a reading of 1.72 in April from a level of 1.84 in the previous month.
Swiss economy grew at a slower than anticipated pace in the Q1 2014
On a seasonally adjusted quarterly basis, Swiss Gross Domestic Product (GDP) rose 0.5% in the Q1 2014, less than markets expectations of a 0.6% rise and compared to a 0.2% rise posted in the Q4 2013.
Australia Westpac leading index declined in April
On a monthly basis, the Westpac leading index in Australia dropped 0.5% in April, compared to a flat change recorded in the previous month.
China industrial profits rose at a slower pace in April
On a year to date basis, industrial profits in China rose 10.0% for the first four months of 2014, compared to a 10.1% increase reported for the January-March 2014 period.
Good trades.
