Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies, ahead of the release of the US personal consumption and spending data, along with few speeches from few of the top Fed officials.
The EUR is trading higher against the USD despite the recent batch of soft economic releases from Germany and Italy. Also an ECB policymaker, Ignazio Visco indicated that the central bank stands prepared to act if Euro-zone’s inflation forecast remains below the ECB’s 2.0% inflation target over the next two years.
The JPY gained ground as a jump in Japan’s April core consumer price index dampened speculation for an additional stimulus measure by the BoJ. However, the IMF urged the Japanese central bank to opt for more aggressive steps to avoid Abenomics from failing.
Yesterday, in the New York session, the greenback traded mostly lower against the key currencies, after the US GDP fell more-than-expected 1.0% in the first quarter. Separately, the Kansas City Fed President, Esther George urged to Fed to raise its key interest rates sharply soon after it end its QE measure to minimize the risks in financial markets.
In the UK, the BoE Deputy Governor, Charlie Bean opined that raising interest rates in small “baby steps” could mitigate the risks of complications in the future.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3615 against the USD, 0.10% higher from the New York close. Earlier today, ECB’s Ignazio Visco hinted that policymakers are ready to act if inflation outlook remains below the central bank’s 2.0% target over the next two years. In economic data, retail sales in Germany unexpectedly declined in April while Italy’s consumer and producer prices missed market expectations. During the session, the pair traded at a high of 1.3618 and a low of 1.3600. Yesterday, the EUR traded a tad lower against the USD in the New York session, and closed at 1.3601.
The pair is expected to find its first support at 1.3598 and first resistance at 1.3629.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6736 against the USD, 0.11% higher from the New York close. Late Thursday, the Gfk reported that its index on UK’s consumer confidence improved to a nine-year high reading in May while a BoE policymaker, Charlie Bean opined that raising interest rates in small “baby steps” could help the BoE avoid making a mistake. During the session, the pair traded at a high of 1.6759 and a low of 1.6718. Yesterday, the British Pound traded marginally higher versus the Dollar in the New York session, and closed at 1.6718.
The pair is expected to find its first support at 1.6708 and first resistance at 1.6761.
USD JPY
The USD is trading at 101.63 against the JPY at 9:40 GMT this morning, 0.11% lower from the New York close, as the latter advanced amid speculation that the BoJ would not add to its stimulus measures after Japan’s core consumer inflation rate jumped to 23-year high level in April. During the session, the pair traded at a high of 101.77 and a low of 101.55. In the New York session yesterday, the USD traded a tad higher against the JPY, and closed at 101.74.
The pair is expected to find its first support at 101.42 and first resistance at 101.84.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8964 against the Swiss Franc, 0.17% lower from the New York close. In economic news, the Swiss KOF leading indicator registered a fall for the third consecutive month in May. During the session, the pair traded at a high of 0.8984 and a low of 0.8966. Yesterday, the USD ended the New York session flat against the CHF, and closed at 0.8979.
The pair is expected to find its first support at 0.8950 and first resistance at 0.8981.
USD CAD
At 9:40 GMT, the USD is trading at 1.0826 against the CAD, 0.12% lower from the New York close. Traders keenly await the release of Canada’s GDP data for further cues in the Canadian Dollar. During the session, the pair traded at a high of 1.0843 and a low of 1.0831. Yesterday, the USD traded 0.19% lower against the CAD in the New York session, and closed at 1.0839, as the latter advanced after data showed that Canada’s current account deficit narrowed to C$12.4 billion in the first quarter, the lowest since the end of 2011.
The pair is expected to find its first support at 1.0810 and first resistance at 1.0856.
AUD USD
The AUD is trading at 0.9310 against the USD, at 9:40 GMT this morning, 0.05% higher from the New York close. Data released overnight showed that the value of loans outstanding to the Australian private sector rose 0.5% on a month-on-month basis in April. During the session, the pair traded at a high of 0.9329 and a low of 0.9306. AUD traded 0.24% higher against the USD in the New York session, and closed at 0.9305.
The pair is expected to find its first support at 0.9279 and first resistance at 0.9335.
Gold
At 9:40 GMT, Gold is trading at $1254.00 per ounce, 0.12% lower from the New York close. This morning, Gold traded at a high of $1259.60 and a low of $1252.00 per ounce. In the New York session yesterday, the yellow metal traded 0.07% higher, and closed at $1255.50, as a lackluster US GDP data fuelled demand for safe-haven assets. Meanwhile, a leading broker expressed an optimistic short-term outlook on the gold prices amid ongoing geo-political tensions in Ukraine.
Gold has its first support at $1250.27 and first resistance at $1259.17.
Silver
Silver is trading at $19.01 per ounce, 0.13% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.09 and a low of $18.94. Silver traded 0.77% higher against the USD in the New York session, and closed at $19.03, tracking gains in gold prices.
Silver has its first support at $18.83 and first resistance at $19.14.
Crude Oil
At 9:40 GMT, Oil is trading at $103.14 per barrel, 0.40% lower from the New York close. This morning, Oil traded at a high of $103.53 and a low of $103.07. Yesterday, Oil traded 0.50% higher in the New York session, and closed at $103.53, benefitting from a sharp fall in the US gasoline inventories and a drop in Libya’s oil output. However, a more-than-expected rise of 1.7 million barrels in the US crude supplies last week, kept the commodity’s losses in check.
It has its first support at $102.52 and first resistance at $103.85.
Economic Snapshot
German retail sales increased more than expected in April
On an annual basis, retail sales in Germany rose 3.4% in April, following a revised fall of 1.1% recorded in the preceding month. Markets were expecting retail sales to rise 1.5% in April.
Italy’s producer price index fell more than expected in April
On a monthly basis, Italy’s producer price index dropped 0.3% in April, compared to a 0.2% fall recorded in the previous month. Markets were expecting the producer price index to decline 0.2% in April.
Italian consumer price index fell unexpectedly in May
On a monthly basis, the preliminary consumer price index in Italy fell 0.1% in May, compared to 0.2% rise in the previous month. Markets were expecting the consumer price index to remain unchanged in May. On a monthly basis, the EU normalised consumer price index in Italy fell 0.1% in May, compared to 0.5% rise in the previous month.
Spain current account deficit narrowed in March
The current account deficit of Spain narrowed to €1.8 billion in March from a deficit of €2.8 billion recorded in the previous month.
Swiss KOF leading indicator declined unexpectedly in May
The KOF leading economic indicator in Switzerland declined to a level of 99.8 in May, compared to a revised reading of 101.8 reported in the previous month. Markets had expected the KOF leading indicator to rise to 102.1 in May.
Fed should raise interest rates sharply, indicated Fed’s George
The Kansas City Federal Reserve (Fed) Bank President, Esther George, stated the central bank should begin raising interest rates soon after it winds down its asset purchase programme. George further opined that the Fed should increase interest rates more sharply than some of her fellow policymakers expect.
Japan may have to maintain loose policy stance for an extended period, indicated IMF
Officials from the International Monetary Fund (IMF) have opined that given the steadily accelerating inflation in Japan, the Bank of Japan might not need to expand its monetary stimulus measures in the near future.
Japan construction orders rose sharply in April
On an annual basis, construction orders in Japan rose 104.9% in April, compared to an 8.8% decline recorded in the previous month. Additionally, the housing starts in Japan dropped less than expected by 3.3% in April, following a 2.9% decline recorded in the preceding month.
Private sector credit in Australia rose more than expected in April
On an annual basis, private sector credit in Australia rose 4.6% in April, compared to a 4.4% increase recorded in the previous month. Markets had expected private sector credit in Australia to rise 4.5% in April.
Good trades.
