Forex Market Update
This morning, the greenback is trading lower against most of the major currencies, ahead of the US first-quarter GDP and weekly jobless claims data.
The JPY gained ground against the USD, following an overnight declined in the US 10-year bond yields, thus narrowing the US-Japan interest differentials. Also, BoJ’s Sayuri Shirai stated that the Japanese economy might need the central bank’s stimulus measures well beyond 2015 as the economy would require more than two-years to achieve its 2.0% inflation target.
The AUD rose against the USD after the Australian Bureau of Statistics reported that firms planned to spend more-than-expected in the year to June 2015, even as capital spending in the first-quarter of 2014 declined 4.2%.
In Yesterday’s New York session, the USD extended its previous session gains and traded higher against major counterparts.
Late Wednesday, in an interview, a BoE policymaker Martin Weale opined that the BoE needs to start its process of hiking interest rates sooner than later to avoid painful hikes in the future.
In the Euro-zone, the ECB, in its semi-annual Financial Stability Review, cautioned against the risk of a reversal of “fickle” capital inflows in the region while an ECB policymaker, Yves Mersch indicated that the central bank could use a combination of policy tools to tackle low inflation in the economy.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3619 against the USD, 0.19% higher from the New York close. During the session, the pair traded at a high of 1.3621 and a low of 1.3591. Yesterday, the EUR traded 0.20% lower against the USD in the New York session, and closed at 1.3593. Late Wednesday, ECB’s Vitor Constancio expressed concerns on the risks arising from a prolonged period of low inflation in the economy while another policymaker, Yves Mersch hinted that the ECB could use conventional as well as unconventional measures to fight deflation threats.
The pair is expected to find its first support at 1.3593 and first resistance at 1.3638.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6725 against the USD, 0.07% higher from the New York close. During the session, the pair traded at a high of 1.6743 and a low of 1.6701. Yesterday, the British Pound traded 0.19% lower versus the Dollar in the New York session, and closed at 1.6714. The CBI, in its monthly survey, reported that retail sales in the UK economy grew at a slower pace in May. A BoE policymaker, Martin Weale urged the central bank to hike its interest rates sooner than later to avoid painful hikes in the future.
The pair is expected to find its first support at 1.6687 and first resistance at 1.6768.
USD JPY
The USD is trading at 101.53 against the JPY at 9:40 GMT this morning, 0.30% lower from the New York close, after US Treasury 10-year yields declined to a nine-month low overnight. Early morning, BoJ’s Sayuri Shirai opined that the central bank would have to extend its stimulus measures beyond 2015. Separately, data showed retail sales in Japan dropped at the fastest pace in nearly 14 years last month. During the session, the pair traded at a high of 101.85 and a low of 101.53. In the New York session yesterday, the USD traded 0.14% higher against the JPY, and closed at 101.83.
The pair is expected to find its first support at 101.33 and first resistance at 101.86.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8964 against the Swiss Franc, 0.22% lower from the New York close, in a subdued trading session on account of an Ascension Day holiday in Switzerland. During the session, the pair traded at a high of 0.8985 and a low of 0.8966. In the New York session yesterday, the USD traded 0.14% higher against the CHF, and closed at 0.8984.
The pair is expected to find its first support at 0.8953 and first resistance at 0.8983.
USD CAD
At 9:40 GMT, the USD is trading at 1.0864 against the CAD, 0.07% lower from the New York close. Traders keenly await the release of Canada’s current account data for further cues in the Canadian Dollar. During the session, the pair traded at a high of 1.0879 and a low of 1.0859. Yesterday, the USD traded 0.14% higher against the CAD in the New York session, and closed at 1.0872.
The pair is expected to find its first support at 1.0844 and first resistance at 1.0886.
AUD USD
The AUD is trading at 0.9300 against the USD, at 9:40 GMT this morning, 0.71% higher from the New York close, after the Australian Bureau of Statistics projected a brighter spending-outlook in Australia for fiscal 2015 despite a fall in capital expenditure in the first quarter of 2014. Additionally, the HIA reported a 2.9% rise in Australian new home sales in April. During the session, the pair traded at a high of 0.9315 and a low of 0.9228. AUD traded marginally lower against the USD in the New York session, and closed at 0.9234.
The pair is expected to find its first support at 0.9236 and first resistance at 0.9340.
Gold
At 9:40 GMT, Gold is trading at $1253.60 per ounce, 0.47% lower from the New York close. This morning, Gold traded at a high of $1259.90 and a low of $1250.90 per ounce. In the New York session yesterday, the yellow metal traded 0.51% lower, and closed at $1259.50, amid broad gains in the US Dollar. Meanwhile, mounting expectations for the newly elected President, Petro Poroshenko would ease geo-political tensions in Ukraine further weighed on the demand prospect of the safe-haven metal.
Gold has its first support at $1247.23 and first resistance at $1263.63.
Silver
Silver is trading at $18.92 per ounce, 0.66% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.08 and a low of $18.83. Silver traded 0.31% lower against the USD in the New York session, and closed at $19.04.
Silver has its first support at $18.78 and first resistance at $19.10.
Crude Oil
At 9:40 GMT, Oil is trading at $102.85 per barrel, 0.20% lower from the New York close. This morning, Oil traded at a high of $103.07 and a low of $102.68. Yesterday, Oil traded 0.89% lower in the New York session, and closed at $103.07, after the API reported a more-than-expected 3.5 million barrels rise in the US crude inventories last week. However, lingering uncertainty over Libya’s supply outlook, kept the commodity’s losses in check.
It has its first support at $102.20 and first resistance at $103.93.
Economic Snapshot
UK Lloyds business barometer dropped in May
The Lloyds business barometer in the UK fell to 41.0 in May from a level of 66.0 reported in the previous month.
Spain’s final GDP rose less than the preliminary estimate in Q1 2014
On an annual basis, the final Gross Domestic Product (GDP) in Spain rose 0.5% in Q1 2014, less than the preliminary estimate of a 0.6% rise and compared to a decline of 0.2% recorded in Q4 2013.
Australia HIA new home sales rose at a faster pace in April
The Housing Industry Association (HIA) reported that on a monthly basis, new home sales in Australia climbed 2.9% in April, compared to a 0.2% rise in the previous month.
Australia’s private capital expenditure declined more than expected in the Q1 2014
On a seasonally adjusted quarterly basis, private capital expenditure in Australia fell 4.2% in Q1 2014, compared to a revised 4.5% decrease recorded in the previous quarter. Markets were expecting Australia’s private capital expenditure to decline 1.9% in the Q1 2014.
Good trades.
