Forex Market Update
This morning, the greenback is trading mixed against most of the major currencies, ahead of the outcome of the Fed’s two-day policy meeting.
The GBP advanced for a brief period of time after the minutes from the BoE’s June policy meeting signaled that policymakers could hike interest rates in the UK economy by the year end. The minutes also highlighted that the policymakers were "surprised" by the low probability investors attached to a shift in interest rates this year.
In Japan, minutes from BoJ’s latest policy meeting highlighted policymakers’ expectations for the Japanese economy to continue with its moderate pace of recovery in the near future while cautioning that political unrest in Thailand could hamper the nation’s export sector activities. Separately, Moody’s opined that slow progress made after the implementation of Abenomics, could dampen Japan’s long-term economic prospects.
In Yesterday’s New York session, the greenback traded mostly lower against the key currencies, paring its initial gains, spurred by an upbeat US consumer inflation data, which showed that consumer prices in the nation posted its largest 12-month increase since October 2012 in May.
In a noteworthy event, the IMF, citing the nation’s fragile economic growth, urged the Italian Government to take quick policy action to boost growth and reduce public debt in the economy.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3558 against the USD, 0.07% higher from the New York close. On the economic front, construction output in the Euro-zone rebounded 0.8% (MoM) in April, after contracting in March. During the session, the pair traded at a high of 1.3566 and a low of 1.3544. Yesterday, the EUR traded marginally higher against the USD in the New York session, and closed at 1.3548.
The pair is expected to find its first support at 1.3538 and first resistance at 1.3576.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6940 against the USD, 0.12% lower from the New York close. Earlier today, minutes from BoE’s June policy meeting hinted that interest rate in the UK could rise before the end of 2014, provided the economy indicates sustainable growth. The minutes also highlighted the central bank’s surprise to the low probability of a “Bank Rate” increase this year. During the session, the pair traded at a high of 1.7004 and a low of 1.6945. Yesterday, the British Pound traded a tad higher versus the Dollar in the New York session, and closed at 1.6961.
The pair is expected to find its first support at 1.6915 and first resistance at 1.6985.
USD JPY
The USD is trading at 102.25 against the JPY at 9:40 GMT this morning, 0.08% higher from the New York close. The BoJ minutes, released overnight, projected moderate pace of recovery to continue in Japan while cautioning that political turmoil in Thailand could weigh on the nation’s export sector. In other economic news, Japan’s total merchandised trade deficit widened less than market expectations in May. During the session, the pair traded at a high of 102.32 and a low of 102.15. In the New York session yesterday, the USD traded slightly higher against the JPY, and closed at 102.17.
The pair is expected to find its first support at 102.02 and first resistance at 102.40.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8988 against the Swiss Franc, 0.07% lower from the New York close. On the economic front, ZEW’s survey on economic expectation in the Swiss economy deteriorated to an 11-month low reading in June. During the session, the pair traded at a high of 0.9001 and a low of 0.8989. In the New York session yesterday, the USD traded 0.08% lower against the CHF, and closed at 0.8994.
The pair is expected to find its first support at 0.8975 and first resistance at 0.9003.
USD CAD
At 9:40 GMT, the USD is trading at 1.0866 against the CAD, marginally higher from the New York close. Market participants are expected to keep a tab on Canada’s wholesale sales data, slated for releases later today. During the session, the pair traded at a high of 1.0874 and a low of 1.0862. Yesterday, the USD traded 0.07% lower against the CAD in the New York session, and closed at 1.0861.
The pair is expected to find its first support at 1.0849 and first resistance at 1.0879.
AUD USD
The AUD is trading at 0.9341 against the USD, at 9:40 GMT this morning, 0.05% higher from the New York close. Early morning, data from Australia showed that, the CB leading index dipped 0.1% in April while the Westpac leading indicator edged up 0.1% (MoM) in May. During the session, the pair traded at a high of 0.9348 and a low of 0.9332. AUD traded marginally lower against the USD in the New York session, and closed at 0.9336.
The pair is expected to find its first support at 0.9322 and first resistance at 0.9364.
Gold
At 9:40 GMT, Gold is trading at $1269.20 per ounce, 0.17% lower from the New York close, ahead of the conclusion of the Fed’s FOMC policy meeting. This morning, Gold traded at a high of $1271.70 and a low of $1266.50 per ounce. In the New York session yesterday, the yellow metal traded 0.70% higher, and closed at $1271.40, amid lingering unrest in Iraq and Libya.
Gold has its first support at $1260.53 and first resistance at $1275.33.
Silver
Silver is trading at $19.71 per ounce, 0.18% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.77 and a low of $19.66. Silver traded 1.05% higher against the USD in the New York session, and closed at $19.74, as global geo-political tensions spurred demand for safe-haven assets.
Silver has its first support at $19.50 and first resistance at $19.84.
Crude Oil
At 9:40 GMT, Oil is trading at $106.64 per barrel, a tad higher from the New York close. Late Tuesday, API reported a more-than-expected 5.7 million barrels drop in the US crude stockpiles, last week. This morning, Oil traded at a high of $106.97 and a low of $106.40. Yesterday, Oil traded 0.19% higher in the New York session, and closed at $106.62, amid continued tensions in Iraq. However, gains in oil prices were capped for a brief period of time after official agency confirmed that southern region in Iraq, which produces 90% of the nation’s total oil output, were safe from Sunni insurgent.
It has its first support at $106.11 and first resistance at $107.18.
Economic Snapshot
BoE policymakers voted unanimously to keep the monetary policy steady, indicated BoE minutes
The minutes of the Bank of England’s (BoE) monetary policy meeting held on 04 and 05 June, 2014, indicated that the central bank officials voted unanimously to keep the benchmark interest rate unchanged at 0.5% and maintain the assets purchase programme at £375.0 billion. However, the minutes also revealed that officials signaled a hike in interest rates before the end of 2014, but only if the nation’s economy maintains an expected pace of growth.
Euro-zone construction output rebounded in April
On a seasonally adjusted monthly basis, construction output in the Euro-zone rose 0.8% in April, following a revised decline of 0.3% recorded in the preceding month.
Swiss ZEW economic expectations declined unexpectedly in June
The ZEW economic expectations index in Switzerland fell to a level of 4.8 in June, compared to a reading of 7.4 reported in the previous month. Markets had expected the index to rise to a level of 10.0 in June.
Japan nationwide department store sales declined at a slower pace in May
On an annual basis, nationwide department store sales in Japan declined 4.2% in May, following a decrease of 12.0% recorded in the preceding month.
Australia’s CB leading index declined in April
The CB leading economic index in Australia fell 0.1% in April, compared to a flat reading recorded in the previous month.
Australia’s Westpac leading index rebounded in May
On a monthly basis, the Westpac leading index in Australia advanced 0.1% in May, compared to a 0.5% decrease recorded in the previous month.
China house price index rose at a slower pace in May
On an annual basis, the house price index in China rose 5.6% in May, following an increase of 6.7%, recorded in the preceding month.
Good trades.
