Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies.
The EUR is trading lower against the USD. Earlier today, ECB’s Erkki Liikanen stated that the central bank is determined to act to contain deflation threats in the economy. Separately, yesterday, another ECB official, Christian Noyer opined that low and falling inflation in the Euro-zone strengthened the deflation risks in the bloc.
The GBP advanced for a brief period of time, earlier today, after data showed that UK industrial production rose at the fastest annual pace since 2011 in April. Yesterday, BoE’s Ian McCafferty hinted that the central was nearing the time to raise its interest rates, even as he felt the economy had some scope to grow.
In Yesterday’s New York session, the greenback traded mostly higher against the key currencies. Fed’s James Bullard projected a sooner-than-expected rise in the US interest rates as, according to him, the economy is presently much closer in attaining its macroeconomic goals than it has been in past 5 years.
In a testimony before the Parliament, the BOJ Deputy Governor, Kikuo Iwata indicated that the central bank’s qualitative and quantitative easing measures (QQE) have had an intended impact on the economy and that the BoJ stands prepared to adjust its policy if risks materialize.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3557 against the USD, 0.26% lower from the New York close. Earlier today, ECB’s Jens Weidmann opined that the ECB has entered “new ground” with its latest policy measures. During the session, the pair traded at a high of 1.3603 and a low of 1.3558. Yesterday, the EUR traded 0.12% lower against the USD in the New York session, and closed at 1.3592, after Euro-zone’s Sentix investors’ confidence unexpectedly dropped to a six-month low in June and as ECB’s Noyer indicated that low and falling inflation could strengthen deflation risks in the Euro-bloc.
The pair is expected to find its first support at 1.3530 and first resistance at 1.3609.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6801 against the USD, a tad lower from the New York close, ahead of the NIESR GDP estimate for the UK economy. On the economic front, Britain’s manufacturing production recorded its fifth successive monthly rise while industrial production in the UK advanced for the third-straight month to post its biggest annual rise since 2011 in April. During the session, the pair traded at a high of 1.6818 and a low of 1.6793. Yesterday, in the New York session, the British Pound finished flat versus the Dollar and closed at 1.6803.
The pair is expected to find its first support at 1.6782 and first resistance at 1.6819.
USD JPY
The USD is trading at 102.36 against the JPY at 9:40 GMT this morning, 0.20% lower from the New York close. Data released overnight showed that Japan’s tertiary index fell more-than-expected by a seasonally adjusted 5.4% in April. During the session, the pair traded at a high of 102.59 and a low of 102.26. In the New York session yesterday, the USD traded 0.10% higher against the JPY, and closed at 102.57. Late Monday, BoJ’s Deputy Governor, Kikuo Iwata reiterated the Governor, Haruhiko Kuroda’s view that the central bank’s QQE measures have had an intended effect on the economy.
The pair is expected to find its first support at 102.18 and first resistance at 102.58.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8994 against the Swiss Franc, 0.26% higher from the New York close, as the latter came under pressure after unemployment rate in Switzerland unexpectedly stood pat in May and as real retail sales in the Swiss economy registered a less-than-expected rise in the month of April. During the session, the pair traded at a high of 0.8997 and a low of 0.8968. In the New York session yesterday, the USD traded 0.12% higher against the CHF, and closed at 0.8971.
The pair is expected to find its first support at 0.8960 and first resistance at 0.9012.
USD CAD
At 9:40 GMT, the USD is trading at 1.0914 against the CAD, 0.07% higher from the New York close. During the session, the pair traded at a high of 1.0916 and a low of 1.0896. Yesterday, the USD traded 0.12% lower against the CAD in the New York session, and closed at 1.0906, as the Loonie benefitted from a report that showed housing starts in Canada rose at the fastest pace in seven-months in May.
The pair is expected to find its first support at 1.0890 and first resistance at 1.0935.
AUD USD
The AUD is trading at 0.9359 against the USD, at 9:40 GMT this morning, 0.09% higher from the New York close, benefited from a strong Chinese inflation data. Separately, data from Australia showed that demand for home loans in the nation remained flat in April while National Australia Bank’s business confidence index stood pat at previous month’s level in May. During the session, the pair traded at a high of 0.9378 and a low of 0.9345. AUD traded marginally lower against the USD in the New York session, and closed at 0.9351.
The pair is expected to find its first support at 0.9337 and first resistance at 0.9379.
Gold
At 9:40 GMT, Gold is trading at $1253.40 per ounce, 0.06% higher from the New York close. This morning, Gold traded at a high of $1256.30 and a low of $1250.10 per ounce. In the New York session yesterday, the yellow metal traded 0.17% lower, and closed at $1252.60, as a rally in the US equity markets dampened the demand for the yellow metal as an alternate investment.
Gold has its first support at $1249.90 and first resistance at $1257.10.
Silver
Silver is trading at $19.03 per ounce, 0.18% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.11 and a low of $19.01. Silver traded 0.24% lower against the USD in the New York session, and closed at $19.06.
Silver has its first support at $18.96 and first resistance at $19.14.
Crude Oil
At 9:40 GMT, Oil is trading at $104.64 per barrel, 0.10% higher from the New York close. This morning, Oil traded at a high of $104.89 and a low of $104.44. Yesterday, Oil traded 0.84% higher in the New York session, and closed at $104.56, amid growing speculations that a US government report would show that crude supplies in the nation declined for another week. Separately, Canadian Association of Petroleum Producers (CAPP) slashed its long-term forecast on Canadian oil production to 6.4 million barrels per day in 2030.
It has its first support at $103.53 and first resistance at $105.32.
Economic Snapshot
UK industrial production rose in line with market estimates in April
On a monthly basis, industrial production in the UK rose 0.4% in April, in line with market expectations and following a revised rise of 0.1% recorded in the preceding month. Meanwhile, on a monthly basis, manufacturing production in the UK rose 0.4% in April, following a rise of 0.5% recorded in the preceding month.
French industrial production rose less than expected in April
On a monthly basis, industrial production in France rose 0.3% in April, following a revised decrease of 0.4% recorded in the preceding month. Markets were expecting industrial production to rise 0.4% in April. Meanwhile, on a monthly basis, manufacturing production in France rose 0.3% in April, following a revised decrease of 0.4% recorded in the preceding month.
Italy’s final GDP declined in line with the preliminary estimate in Q1 2014
On a seasonally and calendar adjusted quarterly basis, GDP in Italy declined 0.1% in Q1 2014, in line with the preliminary estimate and compared to a rise of 0.1% reported in the previous quarter.
Swiss retail sales rose less than expected in April
On an annual basis, retail sales in Switzerland rose 0.4% in April, following a revised increase of 3.4% recorded in the preceding month. Markets were expecting retail sales to rise 2.0% in April.
Swiss unemployment rate remained unexpectedly steady in May
The seasonally adjusted unemployment rate in Switzerland remained steady at 3.2% in May, compared to the previous month. Markets had expected the unemployment rate to decline to 3.1% in May.
Australia NAB business confidence remained unchanged in May
The National Australia Bank (NAB) business confidence index in Australia remained unchanged at a level of 7.0 in May, compared to a revised similar level recorded in the previous month. Meanwhile, the business conditions index in Australia dropped to a level of -1.0 in May, compared to a level of 0.0 recorded in the previous month.
Home loan approvals in Australia remain flat in April
On a seasonally adjusted monthly basis, home loan approvals in Australia remained flat in April, following a revised 0.8% decrease recorded in the preceding month.
China consumer price index rose more than expected in May
On an annual basis, China’s consumer price index (CPI) increased 2.5% in May, more than market expectations of a 2.4% rise and compared to a 1.8% rise recorded in the previous month.
China producer prices declined in May
On an annual basis, China’s producer price index fell 1.4% in May, compared to a 2.0% decline recorded in the previous month.
Good trades.
