Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies.
The EUR is trading lower against the USD. Earlier today, an ECB policymaker, Ardo Hansson opined that the central bank should mull over QE measures and “keep it on shelf for possible use.” Meanwhile, yesterday, ECB’s Jozef Makuch indicated that the central bank stands ready to act should its last week’s policy actions prove insufficient while German Finance Minister, Wolfgang Schaeuble applauded ECB’s recent policy measures amid low inflation rate in the region.
Demand for the GBP rose after the ILO unemployment rate fell to its lowest level in more than five years in the three months to April while employment rose 345,000, the biggest increase since records began in 1971, thereby resulting in a fall in claimant count.
The NZD is trading higher, ahead of the RBNZ’s decision on its key interest rates, which is widely expected to be raised in June.
In a noteworthy event, the World Bank slashed its global growth projection to 2.8% in 2014, from earlier estimate of 3.2%, citing concerns on factors such as, Ukraine crisis and unusually cold weather in the US. Furthermore, it also downgraded US economic-growth estimates to 2.1% this year from 2.8%.
Yesterday, in the New York session, the greenback traded mixed against the key currencies, amid lack of major economic releases in the US.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3534 against the USD, 0.09% lower from the New York close. Earlier today, the World Bank, in its semi annual report, projected economic growth to pick-up in the Euro-zone and to meet its 1.1% target in 2014. During the session, the pair traded at a high of 1.3548 and a low of 1.3524. Yesterday, the EUR traded a tad higher against the USD in the New York session, and closed at 1.3546. However, earlier the EUR came under pressure as few ECB policymakers hinted that the ECB stands prepared to act further should it realize that its recent policy actions were insufficient.
The pair is expected to find its first support at 1.3517 and first resistance at 1.3555.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6789 against the USD, 0.21% higher from the New York close, as UK’s April claimant count rate declined to 3.2% and after the UK ILO unemployment rate fell more than forecast to reach its lowest level in more than five years in the three months to April. During the session, the pair traded at a high of 1.6798 and a low of 1.6745. Yesterday, the British Pound traded 0.07% lower versus the Dollar in the New York session, and closed at 1.6754. The NIESR indicated that growth in the UK economy accelerated to reach its pre-recession peak in the three months to May.
The pair is expected to find its first support at 1.6750 and first resistance at 1.6815.
USD JPY
The USD is trading at 102.06 against the JPY at 9:40 GMT this morning, 0.28% lower from the New York close. Data released overnight showed that the BSI index on Japanese large manufacturers’ sentiment fell to a negative territory in the second quarter while an index measuring prices of Japanese domestic corporate goods rose at a faster than anticipated pace in May. During the session, the pair traded at a high of 102.41 and a low of 102.09. In the New York session yesterday, the USD traded 0.08% higher against the JPY, and closed at 102.35.
The pair is expected to find its first support at 101.91 and first resistance at 102.32.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.9002 against the Swiss Franc, 0.11% higher from the New York close. Amid a lack of major economic releases in Switzerland, traders would eye global economic news for further cues in the currency pair. During the session, the pair traded at a high of 0.9013 and a low of 0.8993. In the New York session yesterday, the USD traded 0.07% lower against the CHF, and closed at 0.8992.
The pair is expected to find its first support at 0.8989 and first resistance at 0.9014.
USD CAD
At 9:40 GMT, the USD is trading at 1.0896 against the CAD, 0.07% lower from the New York close. Traders are expected to keep a tab on global economic news for further guidance in the currency pair amid a lack of major economic releases in Canada. During the session, the pair traded at a high of 1.0906 and a low of 1.0891. Yesterday, the USD traded 0.06% lower against the CAD in the New York session, and closed at 1.0904.
The pair is expected to find its first support at 1.0880 and first resistance at 1.0918.
AUD USD
The AUD is trading at 0.9395 against the USD, at 9:40 GMT this morning, 0.26% higher from the New York close. In economic news, the Australian Westpac consumer confidence improved in June. Separately, RBA’s Sarv Girn urged Australian companies to adapt to new technology in order to avert a potential extinction. Meanwhile, the World Bank slashed its 2014 growth-forecast on China, Australia’s largest trading partner, to 7.6% in 2014. During the session, the pair traded at a high of 0.9402 and a low of 0.9370. AUD traded marginally lower against the USD in the New York session, and closed at 0.9371.
The pair is expected to find its first support at 0.9364 and first resistance at 0.9414.
Gold
At 9:40 GMT, Gold is trading at $1263.50 per ounce, 0.35% higher from the New York close. This morning, Gold traded at a high of $1264.90 and a low of $1258.80 per ounce. In the New York session yesterday, the yellow metal traded 0.20% lower, and closed at $1259.10. However, a weakness in the US equity markets kept the commodity’s losses in check.
Gold has its first support at $1255.63 and first resistance at $1268.13.
Silver
Silver is trading at $19.25 per ounce, 0.37% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.30 and a low of $19.17. Silver traded 0.16% higher against the USD in the New York session, and closed at $19.18, on increased off take by industrial units.
Silver has its first support at $19.05 and first resistance at $19.37.
Crude Oil
At 9:40 GMT, Oil is trading at $104.69 per barrel, 0.40% higher from the New York close, ahead of EIA’s weekly crude supplies data and the outcome of OPEC meeting in Vienna. This morning, Oil traded at a high of $104.79 and a low of $104.25. Yesterday, Oil traded 0.33% lower in the New York session, and closed at $104.32, as API reported a 1.45 million barrels rise in the US crude inventories last week and after the EIA revealed that US May crude production rose to its highest level in 26 years.
It has its first support at $104.09 and first resistance at $105.17.
Economic Snapshot
World Bank trimmed its 2014 global growth forecast
The World Bank lowered its 2014 global growth forecast to 2.8% from the 3.2% growth rate estimated in January 2014, citing the unusually cold winter in the US and the geopolitical tensions in Ukraine. The agency slashed its growth forecast for the US to 2.1% from its earlier estimate of 2.8% expansion.
UK ILO unemployment rate fell more than market expectations in April
The ILO unemployment rate in the UK fell to 6.6% for the February to April 2014 period, more than market expectations and compared to a rate of 6.8% recorded for January to March 2014.
Employment in the UK rose more than expected in April
The number of people employed in the UK rose by 345.0K for February to April 2014, more than market estimates of a rise of 270.0K and compared to a rise of 283.0K recorded for January to March 2014.
UK claimant count rate declined as expected in May
The claimant count rate in the UK fell to 3.2% in May, in line with market expectations and compared to a rate of 3.3% recorded in the previous month. Additionally, the number of people claiming unemployment benefits in the UK declined by 27.4K in May, compared to a revised fall of 28.4K recorded in the previous month.
UK average earnings rose less than expected in April
On an annual basis, average earnings excluding bonus in the UK rose 0.9% % for the February to April 2014 period, less than market expectations of a rise of 1.2% and compared to a 1.3% increase recorded for January to March 2014. Meanwhile, on an annual basis, average earnings including bonus in the UK rose 0.7% for February to April 2014, following a revised 1.9% increase recorded for January to March 2014.
Australia Westpac consumer confidence rebounded in June
On a seasonally adjusted monthly basis, the Westpac consumer confidence index in Australia climbed 0.2% in June to a level of 93.2, compared to a 6.8% decrease and a level of 92.9 reported in the previous month.
Good trades.
