Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies, ahead of the US factory orders data.
The EUR pared its initial losses against the USD after data confirmed that Euro-zone’s unemployment rate fell to the lowest level since November 2012 in April. However, the gains in the EUR were capped as a surprise drop in the Euro-zone’s consumer price index for May strengthened the prospects for ECB’s policy action later during the week.
In Japan, the BoJ Governor, Haruhiko Kuroda warned against any premature talks on the BoJ’s exit from its stimulus measures and indicated that the central bank would not hesitate to alter its QE package should risk materialize and hinder Japan’s progress towards its 2.0% inflation target.
The AUD gained ground as traders reacted positively to RBA’s decision to keep its interest rate unchanged at 2.5% and as Australia posted its lowest quarterly current account deficit since March 2002.
In Yesterday’s New York session, the greenback traded mostly higher against the key currencies, after the ISM revised its US manufacturing PMI data to show that the index rose at the fastest pace of 2014 in May and after Markit Economics reported that its manufacturing PMI rose to a three-month high level last month.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3607 against the USD, 0.08% higher from the New York close, paring its initial losses after data showed that Euro-zone’s unemployment rate unexpectedly edged down to 11.7% in April. However, a surprise drop in the Euro-zone’s May consumer inflation bolstered speculations for ECB’s fresh easing measures in June. During the session, the pair traded at a high of 1.3614 and a low of 1.3597. Yesterday, the EUR traded 0.17% lower against the USD in the New York session, and closed at 1.3596.
The pair is expected to find its first support at 1.3586 and first resistance at 1.3629.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6766 against the USD, 0.11% higher from the New York close, despite data revealing that the UK’s construction PMI fell to a seven-month low level in May. Meanwhile, other data indicated that Britain’s Nationwide housing prices rose to its highest level since June 2007, last month. During the session, the pair traded at a high of 1.6783 and a low of 1.6744. Yesterday, the British Pound traded marginally lower versus the Dollar in the New York session, and closed at 1.6747, hurt by the recent batch of lackluster economic data.
The pair is expected to find its first support at 1.6736 and first resistance at 1.6790.
USD JPY
The USD is trading at 102.40 against the JPY at 9:40 GMT this morning, a tad higher from the New York close. Earlier today, the BoJ Governor, Haruhiko Kuroda warned against premature talks on BoJ’s exit from its QE measures while an official report indicated that Japan’s monetary base rose 45.6% to a record high level of ¥224.37 trillion in May. During the session, the pair traded at a high of 102.47 and a low of 102.31. In the New York session yesterday, the USD traded 0.17% higher against the JPY, and closed at 102.37.
The pair is expected to find its first support at 102.09 and first resistance at 102.61.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8982 against the Swiss Franc, marginally lower from the New York close. During the session, the pair traded at a high of 0.8996 and a low of 0.8982. In the New York session yesterday, the USD traded 0.21% higher against the CHF, and closed at 0.8985, as the latter declined hurt by a more-than-expected fall in the Swiss SVME PMI for May.
The pair is expected to find its first support at 0.8963 and first resistance at 0.8999.
USD CAD
At 9:40 GMT, the USD is trading at 1.0910 against the CAD, 0.08% higher from the New York close. Amid a lack of economic releases from Canada, later today, traders would keenly await the BoC’s interest rate decision, due Wednesday. During the session, the pair traded at a high of 1.0914 and a low of 1.0895. Yesterday, the USD traded 0.09% higher against the CAD in the New York session, and closed at 1.0901. In economic news, the RBC Canadian manufacturing PMI fell to a four-month low reading in May.
The pair is expected to find its first support at 1.0870 and first resistance at 1.0932.
AUD USD
The AUD is trading at 0.9274 against the USD, at 9:40 GMT this morning, 0.34% higher from the New York close, after the RBA kept its benchmark interest unchanged at 2.5% in June and as Australia’s current account deficit narrowed to its lowest quarterly level since the March quarter of 2002. During the session, the pair traded at a high of 0.9289 and a low of 0.9237. AUD traded slightly higher against the USD in the New York session, and closed at 0.9243.
The pair is expected to find its first support at 0.9239 and first resistance at 0.9299.
Gold
At 9:40 GMT, Gold is trading at $1245.30 per ounce, 0.09% higher from the New York close. This morning, Gold traded at a high of $1247.40 and a low of $1241.70 per ounce. In the New York session yesterday, the yellow metal traded 0.22% lower, and closed at $1244.20, hurt by a stronger US Dollar and amid easing tensions over Ukraine crisis. Adding to the pressure was a rally in the US equity and a public holiday in China and Hong Kong, which weighed on the demand prospect of physical gold.
Gold has its first support at $1241.00 and first resistance at $1250.30.
Silver
Silver is trading at $18.81 per ounce, 0.37% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $18.92 and a low of $18.74. Silver traded 0.27% lower against the USD in the New York session, and closed at $18.74, tracking losses in gold prices.
Silver has its first support at $18.69 and first resistance at $18.92.
Crude Oil
At 9:40 GMT, Oil is trading at $102.28 per barrel, 0.20% lower from the New York close. This morning, Oil traded at a high of $102.67 and a low of $102.26. Yesterday, Oil traded 0.16% lower in the New York session, and closed at $102.49, as concerns on the supply-outlook of the commodity somewhat eased after data showed that Iraq’s oil exports rose 8.0% in May and that the nation inaugurated a terminal to expand its oil shipping capacity by 800,000 barrels per day.
It has its first support at $101.86 and first resistance at $102.94.
Economic Snapshot
UK Nationwide house prices rose in May
Nationwide reported that on a non-seasonally adjusted annual basis, the house price index in the UK rose 11.1% in May, compared to a 10.9% rise in the previous month.
UK construction PMI declined unexpectedly in May
The construction Purchasing Managers’ Index (PMI) in the UK fell unexpectedly to 60.0 in May from a reading of 60.8 reported in the previous month. Markets had expected the index to rise to a reading of 61.0 in May.
Euro-zone preliminary consumer price index rose less than forecasts in May
On an annual basis, the preliminary consumer price index in the Euro-zone rose 0.5% in May, compared to a 0.7% rise reported in the previous month. Markets were expecting the consumer price index to rise 0.6% in May.
Euro-zone unemployment rate declined unexpectedly in April
Unemployment rate in the Euro-zone fell to 11.7% in April, compared to a rate of 11.8% recorded in the previous month. Markets were expecting the unemployment rate to remain steady at 11.8% in April.
Italian unemployment rate remained unexpectedly steady in April
The unemployment rate in Italy remained unchanged at 12.6% in April, compared to a revised similar rate in the previous month. Markets had expected the unemployment rate to rise to 12.8% in April.
Spain unemployment declined in May
The number of people unemployed in Spain declined 111.9K in May, compared to a fall of 111.6K reported in the previous month.
Australia retail sales rose less than expected in April
On a seasonally adjusted monthly basis, retail sales in Australia rose 0.2% in April, compared to a 0.1% rise recorded in the previous month. Markets were expecting Australian retail sales to rise 0.3% in April.
Australia’s current account deficit narrowed more than anticipated in Q1 2014
Australia’s seasonally adjusted current account deficit narrowed to A$5.7 billion in Q1 2014, more than market forecasts of a deficit of A$ 7.0 billion and compared to a revised deficit of A$ 11.7 billion recorded in the previous quarter.
RBA maintained its key interest rate steady
The Reserve Bank of Australia (RBA) kept its key interest rate unchanged at 2.50%, in line with market expectations. The RBA Governor, Glenn Stevens, reiterated that the monetary policy continues to remain accommodative, providing support to demand, and helping growth to strengthen.
China final Markit manufacturing PMI rose less than the preliminary estimate in May
Markit final manufacturing Purchasing Managers’ Index (PMI) in China increased to a level of 49.4 in May, less than the flash estimate of a level of 49.7 and compared to a level of 48.1 recorded in April.
China official non-manufacturing PMI rose in May
The NBS non-manufacturing Purchasing Managers’ Index (PMI) in China increased to a reading of 55.5 in May from a reading of 54.8 reported in the previous month.
Good trades.
