Forex Market Update - page 4

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Forex Market Update 28Fev14

This morning, the greenback is trading lower against most of the major currencies.
Demand for the EUR rose after data showed that annual consumer inflation rate in the region came in above expectations, thereby removing pressure from the ECB to introduce new stimulus measures at its next week’s policy meeting in order to aid the regions fragile economic recovery.
The GBP is trading higher against its US counterpart after data showed that home prices in the UK rose at the fastest pace in four years in February while consumer confidence stood pat at the highest level since September 2007. Separately, the Bank of England (BoE) Chief Economist, Spencer Dale hinted that policymakers could face a “healthy” split on deciding the timing to raise interest.
Yesterday, the greenback traded lower in the New York session against the key currencies, as the Fed Chief, Janet Yellen opined that the recent weakness in the US economic data could be partly due to extreme cold winter in the US. Additionally, she reiterated that the Fed would continue the current pace of tapering its stimulus measure even if recovery the US labor market shows a lackluster performance.
The Japanese Yen gained ground as a safe haven amid escalating tension in Ukraine and complicated geopolitical situation on the Crimea peninsula. Meanwhile, the JPY received support after the nation’s inflation rate climbed to a 5-year high last month.

EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3797 against the USD, 0.63% higher from the New York close, after data showed that annual consumer inflation rate in the Euro-zone defied market expectations of a fall and stood pat at previous month’s level of 0.8%. Likewise, unemployment rate in the region also remained unchanged in January at a near-record 12%. During the session, the pair traded at a high of 1.3814 and a low of 1.3698. Yesterday, the EUR traded 0.40% higher against the USD in the New York session, and closed at 1.3711.

The pair is expected to find its first support at 1.3688 and first resistance at 1.3860.

GBP USD
At 10:40 GMT, the GBP is trading at 1.6729 against the USD, 0.25% higher from the New York close, after a report by the UK Nationwide Building Society showed that home prices rose for a 14th straight month in February, depicting a strong recovery in the UK economy and as the GFK consumer confidence continued to stand at its best reading since September 2007. During the session, the pair traded at a high of 1.6770 and a low of 1.6681. Yesterday, the British Pound traded 0.29% higher versus the Dollar in the New York session, and closed at 1.6688.

The pair is expected to find its first support at 1.6640 and first resistance at 1.6794.

USD JPY
The USD is trading at 101.83 against the JPY at 10:40 GMT this morning, 0.35% lower from the New York close as ongoing violence in Ukraine boosted demand for the yen as a safe-haven asset. In Japan, CPI rose 1.4% (YoY) while unemployment rate remained unchanged at previous month’s level of 3.7% in January. Retail sales rose for the sixth-straight month in January and industrial production grew the most since 2011 last month. During the session, the pair traded at a high of 102.22 and a low of 101.65. In the New York session yesterday, the USD traded 0.30% higher against the JPY, and closed at 102.18.

The pair is expected to find its first support at 101.51 and first resistance at 102.19.

USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8816 against the Swiss Franc, 0.77% lower from the New York close. In economic news, the KOF leading indicator in Switzerland advanced to a reading of 2.03 in February, from a level of 2.01 registered in the preceding month. During the session, the pair traded at a high of 0.8891 and a low of 0.8819. In the New York session yesterday, the USD traded 0.25% lower against the CHF, and closed at 0.8884.

The pair is expected to find its first support at 0.8777 and first resistance at 0.8885.

USD CAD
At 10:40 GMT, the USD is trading at 1.1127 against the CAD, flat from the New York close. Market participants keenly await Canada’s fourth-quarter GDP data for further cues in the loonie. During the session, the pair traded at a high of 1.1136 and a low of 1.1119. Yesterday, the USD traded marginally lower against the CAD in the New York session, and closed at 1.1127. The Canadian Dollar pared its initial losses against the US Dollar after data showed that Canada’s current account deficit widened less than analysts’ expectations for the fourth quarter.

The pair is expected to find its first support at 1.1106 and first resistance at 1.1154.

AUD USD
The AUD is trading at 0.8961 against the USD, at 10:40 GMT this morning, 0.06% lower from the New York close. Data released overnight showed that private sector credit in Australia grew at a slower pace in January, compared to previous month’s growth. During the session, the pair traded at a high of 0.8992 and a low of 0.8947. AUD traded 0.41% higher against the USD in the New York session, and closed at 0.8966.

The pair is expected to find its first support at 0.8917 and first resistance at 0.8998.

Gold
At 10:40 GMT, Gold is trading at $1329.09 per ounce, 0.19% lower from the New York close. This morning, Gold traded at a high of $1334.00 and a low of $1325.35 per ounce. In the New York session yesterday, the yellow metal traded flat, and closed at $1331.58. However, earlier during the session, gold prices advanced after the Fed Chief pointed towards the recent softness in the US economic data and after violence escalated in Ukraine.

Gold has its first support at $1324.19 and first resistance at $1335.14.

Silver
Silver is trading at $21.30 per ounce, 0.07% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.35 and a low of $21.14. Silver traded 0.19% lower against the USD in the New York session, and closed at $21.28, hurt by a broad decline in the prices of industrial metals.

Silver has its first support at $21.12 and first resistance at $21.48.

Crude Oil
At 10:40 GMT, Oil is trading at $102.33 per barrel, 0.20% higher from the New York close. This morning, Oil traded at a high of $102.40 and a low of $101.87. Yesterday, Oil traded 0.37% lower in the New York session, and closed at $102.11, as retreating winter in the US and concerns on the China’s growth outlook weighed on the demand prospect of the commodity. However, a weaker US Dollar kept the commodity’s losses in check. Separately, a survey indicated that the OPEC crude production declined to the lowest level in more than two years in February, due to supply disruptions in Saudi Arabia and Libya.

It has its first support at $101.69 and first resistance at $103.02.

Economic Snapshot

UK Gfk consumer confidence remained steady in February
The GfK consumer confidence index in the UK remained unchanged at a level of -7.0 in February, compared to the previous month, in line with market expectations.

Nationwide house prices in the UK rose more than market estimate in February
On an annual basis, the non-seasonally adjusted house prices in the UK climbed 9.4% in February, higher than market estimate of a 9.0% rise and compared to an 8.8% increase recorded in the previous month.

Euro-zone CPI rose unexpectedly in February
On an annual basis, the Euro-zone’s preliminary consumer price inflation (CPI) rose 0.8% in February, compared to a similar rate in the previous month. Market had expected the annual inflation rate to fall to 0.7% in February.

Euro-zone unemployment rate remained unchanged in January
The unemployment rate in the Euro-zone remained unchanged at 12.0% in January, compared to the previous month and in line with market expectations.

German retail sales rebounded in January
On a monthly basis, real retail sales in Germany climbed 2.5% in January, more than market forecast of a rise of 1.0% and compared to a revised 2.1% fall recorded in the previous month. 

France consumer spending and producer prices declined in January
On a monthly basis, consumer spending in France fell 2.1% in January, following a revised rise of 0.2% in the preceding month. Additionally, on a monthly basis, producer prices in France dropped 0.6% in January, following an increase of 0.1% recorded in the preceding month.

Italy unemployment rate rose in January
Unemployment rate in Italy climbed to 12.9% in January, compared to a rate of 12.7% recorded in the previous month. Market had expected the unemployment rate to remain steady at 12.7% in January.

Italy CPI rose less than expected in February
On a monthly basis, the preliminary Italian CPI fell 0.1% in February, compared to a 0.2% rise recorded in the previous month. Meanwhile, on a monthly basis, the preliminary EU normalised consumer price index in Italy fell 0.3% in February, compared to 2.1% fall in the preceding month.

Swiss KOF leading indicator rose more than market estimate in February
The KOF leading indicator in Switzerland rose to a level of 2.03 in February, higher than market expectation of a level of 2.00 and compared to a reading of 2.01 reported in the previous month.

Japan construction orders advanced in January
On an annual basis, construction orders in Japan increased 15.2% in January, compared to a 4.9% rise recorded in the previous month. Additionally, housing starts on an annual basis in Japan rose 12.3% in January, following an increase of 18.0% in the preceding month.

Private sector credit in Australia rose in January
On an annual basis, private sector credit in Australia rose 4.1% in January, compared to a 3.8% rise recorded in the previous month. Markets were expecting private sector credit to rise 4.1% in January.

Happy pips.
 
Weekly Forex Update

The USD traded lower against its key peers last week, following another set of weak economic data from the US and after the Federal Reserve (Fed) President, Janet Yellen admitted before the Senate Banking Committee that monetary authorities were concerned over soft US economic data lately. However, she confirmed that the Fed will stay on the path of QE3 tapering this year.
The US fourth quarter GDP expanded at an annual rate of 2.4%, sharply down from the 3.2% reported last month and the 4.1% logged in the third quarter. However, a couple of top Fed policy-makers indicated that they have not changed their outlook for relatively strong growth in 2014 despite the release of disappointing GDP data. St. Louis Fed chief, James Bullard stated that he remains optimistic about economic growth in 2014, while Charles Plosser, the Philadelphia Fed President indicated that the US economy is in better shape and that he sees steady growth in the nation going forward.
Additionally, the first-time claims for unemployment benefits rose above market estimates, to 348,000 for the week ended February 22, an increase of 14,000 from the previous week's revised figure of 334,000. The Reuters/Michigan consumer sentiment index saw a modest improvement in February, while the Conference Board reported that its consumer confidence index fell to a reading of 78.1 from a downwardly revised 79.4 in January. The US Commerce Department reported that durable goods orders excluding transportation rose 1.1%, the largest increase since May, after slipping 1.9% in December.
Amid improving economic landscape in the Euro-bloc, the European Commission indicated earlier during the week that economic recovery in the Euro-bloc is set to gain momentum as domestic demand improves gradually. Furthermore, upbeat retails sales, employment and consumer confidence data in Germany bolstered market sentiment and led Euro to trade higher against the US Dollar last week. Moreover, steady inflation in the Euro-zone, dampened speculation that the European Central Bank (ECB) will add to monetary stimulus at its policy meeting ahead this week.
The Pound registered gains against the USD, after domestic growth data confirmed that the UK economic recovery remained firmly on track during the final quarter of last year. Additionally, striking an upbeat note, an eminent economist at IHS Global Insight indicated that the British economy is set to grow at a faster pace in 2014, supported mainly by strong improvement in business investment.
The Yen spiked on Friday, after the Japanese industrial production and retail trade data for January, came in better-than market forecast. The Loonie rose sharply on Friday, after data revealed that the Canadian economy grew more-than-expected in the fourth quarter of 2013.

EUR USD
Last week, the EUR traded 0.45% higher against the USD and closed at 1.3802, as economic data from Germany boosted risk appetite. German retail sales rebounded in January, staging a strong recovery from the slump in December. Moreover, the number of unemployed people out of work in Europe's largest economy decreased by 14,000 to 2.914 million, while the jobless rate held steady at 6.8% in February. Additionally, forward looking GfK consumer confidence in the nation rose to a seven-year high in March. Another data revealed that the German economy expanded 0.4% in the final quarter of 2013, as initially estimated. Meanwhile, inflation in the Euro-zone stood unchanged at 0.8% in February, lowering the pressure on the central bank to take action to overcome fears of deflation. Moreover, unemployment in the region held steady at 12% in January. Additionally, economic confidence in the bloc improved for the tenth consecutive month to 101.2 in February. During the week, the pair traded at a high of 1.3825 and a low of 1.3642. The pair is expected to find its first support at 1.3688, with the next support expected at 1.3573. The first resistance is at 1.3871 and the next at 1.3939.

Traders are expecting an action packed week ahead wherein the outcome of the ECB policy meeting is awaited along with key economic data out of the bloc. Additionally, a speech by the central bank President, Mario Draghi is also expected to garner market interest.

GBP USD
In the last week, GBP traded 0.64% higher against the USD and closed at 1.6745, following the release of positive economic data in the UK. The UK GDP expanded 0.7% (QoQ), in line with preliminary estimate, while, on a yearly basis, the economy grew 2.7%, down slightly from the preliminary estimate for 2.8% growth. The Nationwide house price index advanced 9.4% annually, after gaining 8.8% in January. Also, mortgage approvals in the UK increased more-than-expected to 49,972 in January. However, the GBP came under pressure earlier in the week after two of the Bank of England (BoE) policymakers, David Miles and Spencer Dale downplayed concerns of an interest rate hike, stating that the central bank is in no hurry to raise interest rates and will focus more on supporting the economic recovery. The pair traded at a high of 1.6770 and a low of 1.6583 in the previous week. GBPUSD is expected to find its first support at 1.6629, with the next at 1.6512. Resistance exists first at 1.6816, and then at 1.6886.

Going forward, investors have their plate full with a raft of economic data scheduled for release in the UK. Also, investors will closely monitor the BoE monetary policy meeting for further direction.

USD JPY
The USD traded 0.82% lower against the JPY over the past week, closing at 101.80. The Yen rose following upbeat domestic economic data. The Japanese factory output highlighted an upward trend, surging 4.0% (MoM) in January, outpacing forecasts for a 3.1% rise. Consumer prices in the nation rose last month, albeit at a steady pace, a sign that the economy is making progress on ending years of deflation. Household expenditure rose more-than-expected by 1.1% (YoY) in January. Furthermore, Japan’s retail trade soared in January, while the unemployment rate remained steady for January.  The pair traded at a high of 102.70 and a low of 101.55. The pair is expected to find its first support at 101.33, with the next support expected at 100.87. The first resistance is at 102.48, and the next at 103.17.

Traders would focus on leading economic and coincident index from Japan ahead in the week.

USD CHF
USD traded 0.83% lower against the CHF and closed at 0.8803 in the last week. In economic news, real GDP growth in Switzerland slowed more-than-expected to 0.2% in the final quarter of 2013 from 0.5% in the previous quarter. The KOF economic barometer index advanced to a reading of 2.03 in February from 2.01 in January. Meanwhile, the UBS consumption Indicator, declined to 1.44 in January from 1.80 in December. During the period, the pair traded at a high of 0.8931 and a low of 0.8778. The first support is at 0.8744, and the next at 0.8684. Resistance exists first at 0.8897, and then at 0.8990.

Apart from external cues, traders would keep an eye on Swiss economic data which includes manufacturing PMI, unemployment rate, consumer price index and industrial production data.

USD CAD
Last week, the USD traded 0.51% lower against the CAD and closed at 1.1064. The Canadian Dollar finished sharply higher on Friday, after data showed that the economy expanded in the final three months of 2013, recording its biggest annualized gain in over two years, though growth slowed in December. Statistics Canada reported that fourth-quarter economic growth expanded at an annualized pace of 2.9%, better than a 2.5% rise expected. However, the GDP contracted more-than-expected by 0.5% in December. In a separate release, the agency reported that country's current account deficit widened to $16 billion in the fourth quarter of 2013. USDCAD traded at a high of 1.1161 and a low of 1.1040 in the previous week. The first support is at 1.1016, with the next at 1.0967. The first resistance is at 1.1137, while the next is at 1.1209.

All eyes are now set on the Bank of Canada’s interest rate decision this week, after upbeat fourth quarter GDP data reduced the possibility that the central bank would consider cutting interest rates.

AUD USD
AUD traded 0.48% lower against the USD last week, and closed at 0.8924. In economic news, the total value of construction work done in Australia dipped 1.0% (QoQ) in the fourth quarter, while private capital expenditure, a key measure of investment, dipped 5.2% in the last quarter of 2013. Data released by the Reserve Bank of Australia (RBA) on Friday revealed that private sector credit in Australia rose 0.4% in January, missing market forecasts for an increase of 0.5%. During the week, the pair traded at a high of 0.9051 and a low of 0.8903. The first support is at 0.8868, and the next at 0.8811. The first resistance is at 0.9016, and the next at 0.9107.

Looking ahead, traders will closely monitor the RBA monetary policy meeting for further direction in the pair. Additionally, a series of economic data from Australia and China will influence risk sentiment among traders.

Gold
In the prior week, Gold traded 0.16% higher against the USD and closed at USD1326.44, as disappointing US economic data added to concerns that the economic recovery has lost momentum since the beginning of this year. Additionally, a cautious statement from the Fed chief, Janet Yellen that recent weak data indicates softness in the economy, weighed on the greenback. The yellow metal’s appeal as a safe haven asset also increased amid political and economic turmoil in Ukraine. The yellow metal traded at a high of 1345.45 and a low of 1318.78 in the previous week. Gold is expected to find support at 1315.00 and the next at 1303.55. The first resistance is at 1341.67, while the next is at 1356.89.

Ahead in the week, traders would focus on the US nonfarm payrolls data, after last week’s jobless claims data highlighted a fragile state of the recovery in the US labor market.

Crude Oil
Oil prices traded 0.38% higher against the USD in the last week and closed at USD102.59, drawing support from the weekly oil inventory data. The US Energy Information Administration reported the US crude oil inventories rose by 68,000 barrels for the week ended February 21, below expectations for an increase of 1.24 million barrels. Moreover, the American Petroleum Institute, indicated that crude inventories rose by 822,000 barrels compared to expectations for an increase of 1.5 million barrels. However, market sentiment remained under pressure, amid fresh political and military tensions between Russia and Ukraine. Oil traded at a high of 103.45 and a low of 101.02 in the previous week. Oil has its first major support at 101.26, while the next support exists at 99.92. The first resistance is at 103.69 and the next at 104.78.

The global macroeconomic data would remain a key catalyst in this week’s market action. Oil traders would also watch events unfolding in Ukraine, after key Western nations stated that there was an “armed invasion” of Ukraine’s volatile Crimean peninsula by Russian troops.

Happy pips.  "Make love not war"
 
Forex Market Update 04Mar14

This morning, the greenback is trading mostly lower against most of the major currencies.
The JPY trimmed its initial gains against the USD after Russia withdrew its military troops from Ukraine and after the BoJ Governor, Haruhiko Kuroda indicated that low interest rates in Japan is accelerating growth  in the yen carry trade.
The GBP is trading higher against the USD. However gains were limited after the UK construction activity slowed last month, as the difficult weather conditions hit housebuilding.
Earlier today, in Australia, the RBA kept its benchmark interest rate unchanged at 2.5% and reiterated its earlier stance for a period of stability in interest rates. Separately, RBA Governor, Glen Stevens opined that a weakness in the domestic currency could help balanced economic growth in the nation.
Yesterday, in the New York session, the USD traded mostly higher against the key currencies after data indicated that the manufacturing PMI in the US rose at a faster pace than market expectations for February.
The EUR declined against the USD as traders refrained from taking riskier bets in the currency. Separately, the ECB Chief, Mario Draghi stated that the recent 0.8% rise in the region’s CPI index was “way below” the central bank’s inflation target. Furthermore, he opined that persistent low level of inflation in the region could make it harder for the economy to achieve its 2% goal.

EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3751 against the USD, 0.11% higher from the New York close. On the macro front, producer prices in the Euro-zone on a yearly basis fell at the fastest rate since the end of 2009 in January. During the session, the pair traded at a high of 1.3774 and a low of 1.3726. Yesterday, the EUR traded 0.25% lower against the USD in the New York session, and closed at 1.3736. The ECB President, Mario Draghi expressed concerns on the recent CPI data and opined that persistent low inflation could make it harder for the Euro-zone to achieve the ECB’s 2% inflation target.

The pair is expected to find its first support at 1.3719 and first resistance at 1.3784.

GBP USD
At 10:40 GMT, the GBP is trading at 1.6679 against the USD, 0.08% higher from the New York close, despite the construction PMI in the UK registering a more-than-expected fall in February, hurt by unfavorable climatic conditions in the nation. During the session, the pair traded at a high of 1.6718 and a low of 1.6646. Yesterday, the British Pound traded 0.39% lower versus the Dollar in the New York session, and closed at 1.6665, as the greenback advanced on the back of upbeat US ISM manufacturing PMI data and strong demand for safe-haven assets.

The pair is expected to find its first support at 1.6630 and first resistance at 1.6738.

USD JPY
The USD is trading at 101.77 against the JPY at 10:40 GMT this morning, 0.34% higher from the New York close. The Yen lost its safe haven appeal after Russia ended military strikes in Ukraine’s Crimea region. Adding to the negative sentiment were comments from the BoJ Governor, Kuroda, who opined that low interest rates in the nation is facilitating growth in yen carry trade. During the session, the pair traded at a high of 101.96 and a low of 101.44. In the New York session yesterday, the USD traded marginally higher against the JPY, and closed at 101.42.

The pair is expected to find its first support at 101.32 and first resistance at 102.09.

USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8846 against the Swiss Franc, 0.15% higher from the New York close. During the session, the pair traded at a high of 0.8849 and a low of 0.8831. In the New York session yesterday, the USD traded 0.26% higher against the CHF, and closed at 0.8833.

The pair is expected to find its first support at 0.8809 and first resistance at 0.8866.

USD CAD
At 10:40 GMT, the USD is trading at 1.1084 against the CAD, 0.05% higher from the New York close. During the session, the pair traded at a high of 1.1104 and a low of 1.1077. Yesterday, the USD traded 0.18% lower against the CAD in the New York session, and closed at 1.1078. In economic news industrial product price and raw material price index in Canada surpassed analysts’ expectations for January.

The pair is expected to find its first support at 1.1065 and first resistance at 1.1107.

AUD USD
The AUD is trading at 0.8948 against the USD, at 10:40 GMT this morning, 0.16% higher from the New York close. Early morning, the RBA kept its interest rate unchanged at 2.5% and opined that a weaker Aussie could help achieve balanced growth in the economy. Separately data showed that building permits in Australia surged more than market expectations by 34.6% (YoY) in January. During the session, the pair traded at a high of 0.8970 and a low of 0.8919. AUD traded 0.19% higher against the USD in the New York session, and closed at 0.8934.

The pair is expected to find its first support at 0.8910 and first resistance at 0.8978.

Gold
At 10:40 GMT, Gold is trading at $1337.51 per ounce, 0.90% lower from the New York close, as demand for safe-haven assets declined after Russian President, Vladimir Putin ordered troops to return from Ukraine borders. This morning, Gold traded at a high of $1352.68 and a low of $1336.58 per ounce. In the New York session yesterday, the yellow metal traded 0.30% higher, and closed at $1349.68, as tension over Ukraine escalated after Russian forces took control over Ukraine’s Crimean peninsula.

Gold has its first support at $1331.10 and first resistance at $1349.39.

Silver
Silver is trading at $21.25 per ounce, 0.79% lower from the New York close, at 10:40 GMT this morning, as easing concerns on Ukraine crisis weighed on the demand outlook of safe-haven assets. This morning, Silver traded at a high of $21.53 and a low of $21.17. Silver traded 0.21% lower against the USD in the New York session, and closed at $21.42, mirroring losses in the prices of industrial metals.

Silver has its first support at $21.06 and first resistance at $21.54.

Crude Oil
At 10:40 GMT, Oil is trading at $103.74 per barrel, 1.10% lower from the New York close, as concerns over Ukraine crisis receded following Russia’s decision to withdraw its troop from Ukraine borders. This morning, Oil traded at a high of $104.96 and a low of $103.60. Yesterday, Oil traded slightly higher in the New York session, and closed at $104.88, as tension in Ukraine and chilly weather in the US bolstered the demand-outlook of the commodity.

It has its first support at $103.15 and first resistance at $104.77.

Economic Snapshot

UK construction PMI fell more than expected in February
The construction Purchasing Managers’ Index (PMI) in the UK fell to a reading of 62.6 in February, following a reading of 64.6 in the previous month. Markets had expected the index to fall to a reading of 63.2.

Euro-zone producer price index fell more than expected in January
On an annual basis, producer price index in the Euro-zone fell 1.4% in January, compared to 0.8% fall in the previous month. Markets were expecting the producer price index to fall 1.3% in January.

Unemployment in Spain fell unexpectedly in February
The number of people unemployed in Spain dropped by 1.9K in February, compared to a rise 113.1K reported in the previous month. Market had expected the unemployment to rise by 74.2K in February.

Japan’s labor cash earnings declined unexpectedly in January
On an annual basis, labor cash earnings in Japan dropped 0.2% in January, compared to a revised 0.5% increase recorded in the previous month. Market had expected Japan’s labor cash earnings to rise 0.3% in January.

Australia building approvals rose more than expected in January
On a seasonally adjusted monthly basis, building approvals in Australia rose 6.8% in January, compared to a revised 1.3% decline in the previous month. Markets were expecting building approvals to rise 0.5% in January.

Australia’s current account deficit narrowed less than anticipated in the Q4 2013
Australia’s seasonally adjusted current account deficit narrowed to A$ 10.1 billion in Q4 2013, less than market forecasts and from a revised deficit of A$ 12.5 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 interest rates could remain at the current levels in the near future, given the improving domestic and global economic prospects.

Happy pips.
 

Forex Market Update 05Mar14


This morning, the USD is trading mixed against most of the major currencies.

The EUR is trading on a lower footing as investors remained cautious ahead of the ECB’s monetary policy meeting scheduled tomorrow. Meanwhile, upbeat data from the Euro-zone and after easing crisis in Ukraine, did little to change the “risk-off” sentiment existing in the market. An official data confirmed that the Euro-zone’s economy expanded in-line with market estimates for the fourth quarter while annual retail sales rebounded in January. Meanwhile, the Markit economics reported that the region’s private sector registered its busiest month in over two and a half years in February.

The AUD witnessed a strong demand after Australia’s GDP surpassed market expectations for the fourth quarter and after the performance of service index in Australia improved to the highest level in six years in February. The Aussie also benefited from a report that showed China’s HSBC service PMI in February rose to a level best seen in three months.

Yesterday, the USD traded higher in the New York session against the key currencies. The Richmond Fed President, Jeffrey Lacker hinted that the US Fed could hike its interest rate in the early 2015 while stating that the potential risks to the US economy from Ukraine crisis seem quite manageable at this point. Separately, the former Fed Chairman, Ben Bernanke, in a speech at Abu Dhabhi, opined that the probability for the US economy to register a 3% growth this year remains very high.


EUR USD

This morning at 10:40 GMT, the EUR is trading at 1.3718 against the USD, 0.17% lower from the New York close. On the macro economic front, Euro-zone’s Q4 GDP rose in-line with market expectations while retail sales in the region registered an upbeat rise in January. Separately, Markit Economics reported its service and composite PMI for the Euro-zone surpassed analysts’ expectations in February. During the session, the pair traded at a high of 1.3746 and a low of 1.3716. Yesterday, the EUR traded 0.12% lower against the USD in the New York session, and closed at 1.3742.


The pair is expected to find its first support at 1.3689 and first resistance at 1.3765.


GBP USD

At 10:40 GMT, the GBP is trading at 1.6671 against the USD, marginally higher from the New York close, as traders cheered a less-than-expected fall in the UK Markit service PMI data for February. During the session, the pair traded at a high of 1.6696 and a low of 1.6661. Yesterday, the British Pound traded 0.19% lower versus the Dollar in the New York session, and closed at 1.6666.


The pair is expected to find its first support at 1.6646 and first resistance at 1.6702.


USD JPY

The USD is trading at 102.42 against the JPY at 10:40 GMT this morning, 0.15% higher from the New York close. Earlier today, the BoJ Governor, Haruhiko Kuroda reiterated that the central bank’s monetary policy is aimed at ending deflation in the domestic economy at soon as possible. During the session, the pair traded at a high of 102.45 and a low of 102.15. In the New York session yesterday, the USD traded 0.38% higher against the JPY, and closed at 102.26. The JPY declined as demand for safe-haven assets declined following Russia’s withdrawal of army troops from Ukraine’s borders.


The pair is expected to find its first support at 101.96 and first resistance at 102.66.


USD CHF

This morning at 10:40 GMT, the USD is trading at 0.8881 against the Swiss Franc, 0.08% higher from the New York close. During the session, the pair traded at a high of 0.8894 and a low of 0.8871. In the New York session yesterday, the USD traded 0.31% higher against the CHF, and closed at 0.8874.


The pair is expected to find its first support at 0.8843 and first resistance at 0.8907.


USD CAD

At 10:40 GMT, the USD is trading at 1.1077 against the CAD, 0.14% lower from the New York close, ahead of the BoC’s interest rate decision. During the session, the pair traded at a high of 1.1101 and a low of 1.1079. Yesterday, the USD traded 0.21% higher against the CAD in the New York session, and closed at 1.1092.


The pair is expected to find its first support at 1.1050 and first resistance at 1.1112.


AUD USD

The AUD is trading at 0.8972 against the USD, at 10:40 GMT this morning, 0.23% higher from the New York close, after data showed that the Australian economy expanded at a faster pace than market expectations’ for the fourth quarter and after the AiG reported that activities in Australia’s service sector rose at the fastest pace in six years in February. During the session, the pair traded at a high of 0.8998 and a low of 0.8949. AUD traded marginally higher against the USD in the New York session, and closed at 0.8951.


The pair is expected to find its first support at 0.8936 and first resistance at 0.9003.


Gold

At 10:40 GMT, Gold is trading at $1333.97 per ounce, 0.05% lower from the New York close. This morning, Gold traded at a high of $1341.50 and a low of $1332.74 per ounce. In the New York session yesterday, the yellow metal traded 0.08% higher, and closed at $1334.59. However the gains were capped as demand for safe-haven assets declined following Russia’s decision to back-off from Ukraine’s borders.


Gold has its first support at $1329.71 and first resistance at $1339.87.


Silver

Silver is trading at $21.25 per ounce, 0.35% higher from the New York close, at 10:40 GMT this morning. Overnight, media reports indicated that easing of import curbs on gold in India could weigh on the demand-outlook of silver as an alternative asset. This morning, Silver traded at a high of $21.28 and a low of $21.14. Silver traded 0.15% higher against the USD in the New York session, and closed at $21.17.


Silver has its first support at $21.08 and first resistance at $21.36.


Crude Oil

At 10:40 GMT, Oil is trading at $102.84 per barrel, 0.50% lower from the New York close, ahead of the Energy Information Administration (EIA) weekly report on the US crude inventories. This morning, Oil traded at a high of $103.53 and a low of $102.81. Yesterday, Oil traded 0.38% lower in the New York session, and closed at $103.36, as easing tensions in Ukraine lifted some concerns on the supply-outlook of the commodity. Separately, the American Petroleum Institute (API) reported that US crude supplies rose less-than-expected by 1.2 million barrels last week.


It has its first support at $102.44 and first resistance at $103.61.


Economic Snapshot


UK BRC shop price index declined in February

On an annual basis, the BRC shop price index in the UK fell 1.4% in February, compared to a 1.0% fall in the previous month.


UK services PMI declined in February

The Markit services purchasing managers’ index (PMI) in the UK eased to a reading of 58.2 in February, compared to a final reading of 58.3 reported in the previous month. Market had expected the index to fall to a reading of 58.0 in February.


Euro-zone services PMI rose more than preliminary estimate February

The final Markit services PMI in the Euro-zone increased to a reading of 52.6 in February, higher than preliminary estimate of a level of 51.7 and following a reading of 51.6 recorded in the previous month. Additionally, the final composite PMI in the Euro-zone rose to a reading of 53.3 in February from a reading of 52.9 posted in January.


Euro-zone economy expanded in line with previous estimate in the Q4 2013

On a seasonally adjusted quarterly basis, GDP in the Euro-zone rose 0.3% in the fourth quarter of 2013, in line with the preliminary estimate and compared to a 0.1% rise recorded in the third quarter of 2013


Euro-zone retail sales rose more than expected in January

On a monthly basis, retail sales in the Euro-zone rose 1.6% in January, after recording a revised fall of 1.3% in the previous month. Market had expected retail sales to rise 0.8% in January.


Germany services PMI advanced more than preliminary estimate in February

The final Markit services PMI in Germany climbed to a reading of 55.9 in February, more than preliminary estimate of a level of 55.4 and compared to a reading of 53.1 in January.


France final services PMI declined less than the preliminary estimate in February

The final services PMI in France fell to a reading of 47.2 in February, from a reading of 48.9 in the previous month, but less than the preliminary estimate of a level of 46.9.


Italy services PMI rose in February

Markit services PMI in Italy climbed to a reading of 52.9 in February, following a reading of 49.4 in the previous month.


Spain services PMI fell unexpectedly in February

Markit services PMI in Spain dropped unexpectedly to a reading of 53.7 in February, from a reading of 54.9 in the previous month. Market had expected Spain’s services PMI to rise to a level of 55.0 in February.


Australia GDP rose more than expected in the Q4 2013

On a seasonally adjusted annual basis, GDP in Australia rose 2.8% in the fourth quarter of 2013, more than market estimate of a rise of 2.5% and compared to a revised 2.4% increase recorded in the third quarter of 2013.


China services sector activity rose in February

China’s services PMI increased to a level of 51.0 in February, from a level of 50.7 reported in the previous month.


China reiterated 7.5% growth target for 2014

China’s Premier, Li Keqiang, speaking at the annual parliament meeting, maintained the nation’s growth target of 7.5% for 2014. Li also announced that the government would continue to focus on reforms and rebalancing the economy.


Happy pips.

 
Forex Market Update 06Mar14

This morning, the USD is trading mostly lower against most of the major currencies.
Market participants keenly await policy decision from the Bank of England (BoE) and the European Central Bank (ECB) for further guidance in the GBP and the EUR, respectively.
The JPY is trading lower against the USD after a panel at Japan’s labor ministry highlighted the possibility for the nation’s pension fund to diversify out of Japanese bonds due to quickening inflation.
Demand for the AUD rose after data from Australia showed that retail sales and trade surplus in the nation rose above market expectations in January. Separately, the Reserve Bank of Australia’s (RBA) John Edwards opined that upbeat GDP data has overshadowed threats of a serious economic downturn and has proved that the nation is gradually shifting its focus from mining driven activities to other sources of demand.
Yesterday, in the New York session, the USD traded lower against the key currencies. The Fed Chief, Janet Yellen pledged to emphasize more on jobs and stable price to ensure that the US economic growth meets Congress-mandate goals. Separately, the Fed’s Beige Book revealed that eight of the twelve regions in the US managed to show “modest to moderate” improvement even as harsh winter subdued the nation’s economic growth as a whole.
In the Euro-zone, the IMF urged the ECB to slash its key interest rate and opt for more alternative measures to combat deflation risks in the region.

EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3734 against the USD, flat from the New York close, ahead of the ECB’s interest rate decision. In economic news, Germany’s factory orders rose more than market estimates for January. During the session, the pair traded at a high of 1.3739 and a low of 1.3725. Yesterday, the EUR traded marginally higher against the USD in the New York session, and closed at 1.3734.

The pair is expected to find its first support at 1.3711 and first resistance at 1.3754.

GBP USD
At 10:40 GMT, the GBP is trading at 1.6724 against the USD, steady from the New York close, as market participants keenly await the BoE’s decision on its benchmark interest rate and asset-purchase facility. On the economic front, the Halifax house prices in the UK registered the fastest growth in five years in February. During the session, the pair traded at a high of 1.6731 and a low of 1.6711. Yesterday, the British Pound traded slightly higher versus the Dollar in the New York session, and closed at 1.6722.

The pair is expected to find its first support at 1.6675 and first resistance at 1.6758.

USD JPY
The USD is trading at 102.67 against the JPY at 10:40 GMT this morning, 0.35% higher from the New York close. The Yen lost ground against the Dollar after comments from Japan’s government panel spurred speculation that the nation’s pension fund would diversify its portfolio by purchasing foreign assets on a large scale. A panel at the labor ministry suggested that the nation’s giant pension fund need not concentrate on bonds, due to rising inflation. During the session, the pair traded at a high of 102.83 and a low of 102.31. In the New York session yesterday, the USD traded 0.14% lower against the JPY, and closed at 102.31.

The pair is expected to find its first support at 102.33 and first resistance at 102.92.

USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8878 against the Swiss Franc, 0.09% higher from the New York close. During the session, the pair traded at a high of 0.8893 and a low of 0.8871. In the New York session yesterday, the USD traded 0.07% lower against the CHF, and closed at 0.8870.

The pair is expected to find its first support at 0.8859 and first resistance at 0.8897.

USD CAD
At 10:40 GMT, the USD is trading at 1.1024 against the CAD, 0.07% lower from the New York close. Traders await the Canada’s Ivey PMI and building permit data for further cues in the loonie. During the session, the pair traded at a high of 1.1048 and a low of 1.1025. Yesterday, the USD traded 0.30% lower against the CAD in the New York session, and closed at 1.1032. The Canadian Dollar advanced after the BoC kept its interest rate unchanged at 1% and hinted gradual strength in the nation’s fundamental drivers of growth and inflation.

The pair is expected to find its first support at 1.0995 and first resistance at 1.1077.

AUD USD
The AUD is trading at 0.9045 against the USD, at 10:40 GMT this morning, 0.62% higher from the New York close, after data showed that Australia’s retail sales and trade surplus registered an upbeat rise in January. Positive sentiment was also fuelled after the RBA’s John Edwards expressed optimism on the Australian economy by stating that the recent strong GDP figures prove that the economy has gained momentum. During the session, the pair traded at a high of 0.9059 and a low of 0.8979. AUD traded 0.16% higher against the USD in the New York session, and closed at 0.8989.

The pair is expected to find its first support at 0.8983 and first resistance at 0.9083.

Gold
At 10:40 GMT, Gold is trading at $1335.53 per ounce, 0.12% lower from the New York close, on profit-booking. This morning, Gold traded at a high of $1345.00 and a low of $1331.27 per ounce. In the New York session yesterday, the yellow metal traded 0.14% higher, and closed at $1337.15, as traders favored the safe-haven metal following the release of lackluster ISM service PMI and ADP employment data from the US.

Gold has its first support at $1329.53 and first resistance at $1343.26.

Silver
Silver is trading at $21.17 per ounce, marginally lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.28 and a low of $21.09. Silver traded 0.19% lower against the USD in the New York session, and closed at $21.17.

Silver has its first support at $21.06 and first resistance at $21.30.

Crude Oil
At 10:40 GMT, Oil is trading at $101.30 per barrel, 0.30% higher from the New York close. This morning, Oil traded at a high of $101.45 and a low of $100.86. Yesterday, Oil traded 2.03% lower in the New York session, and closed at $100.99 after a report from the Energy Information Administration (EIA) showed that the US crude stockpiles rose by 1.4 million barrels last week.

It has its first support at $100.36 and first resistance at $102.73.

Economic Snapshot

UK Halifax house price index rose more than expected in February
On an annual basis, the Halifax house price index in the UK rose 7.9% in February, following a rise of 7.3% recorded in the preceding month. Markets were expecting the index to rise 7.3% in February.

France unemployment rate fell in the Q4 2013
The ILO unemployment rate in France declined to 10.2% in Q4 2013, compared to a revised rate of 10.3% recorded in the previous quarter.

US aggressive easing policies creating risks of financial imbalance, indicated Fed’s Fisher
The President of Dallas Federal Reserve (Fed) Bank, Richard Fisher cautioned that US central bank’s aggressive bond buying program, in an attempt to foster the nation’s economic growth, is expected to create significant market imbalances and consequently encourage pre-2008 financial crisis risky behavior.

Fed policies have boosted the US economy, indicated Fed’s Williams
John Williams, the President of the San Francisco Federal Reserve (Fed) Bank, opined that improvement in the interest rate-sensitive sectors like auto and housing have indicated that the central bank’s accommodative monetary policy is working. Williams also expressed confidence that the US economy would continue to expand 2.5% or more annually and that unemployment would likely fall to between 5-6% over the next few years.

BoJ to adjust policy to counter risks to economic outlook, indicated BoJ’s Iwata
The Bank of Japan (BoJ) Deputy Governor, Kikuo Iwata, indicated that the central bank would appropriately adjust its monetary policy if risks to economic outlook threaten its 2% inflation target. Iwata also stated that the Japanese economic recovery would continue at a moderate pace even after the proposed sales tax hike comes into effect in April 2014.

Australia retail sales rose at a faster pace in January
On a seasonally adjusted monthly basis, retail sales in Australia rose 1.2% in January, compared to a revised 0.7% rise in the previous month. Market had expected retail sales to rise 0.4% in January.

Australia’s trade surplus widened unexpectedly in January
Australia’s seasonally adjusted trade surplus widened to A$1433.0 million in January, compared to a revised surplus of A$591.0 million recorded in the previous month. Market had expected Australia’s trade surplus to narrow to A$100.0 million in January.

Happy pips.
 

Forex Market Update 07Mar14


This morning, the USD is trading lower against most of the major currencies. However the greenback headed for its biggest weekly gain in three months against the yen amid hawkish statements by few Fed officials and ahead of the nonfarm payrolls data.

The AUD is trading higher against the USD after the Reserve Bank of Australia Governor, Glenn Stevens, dismissed expectations of a rate cut.

During the New York session yesterday, the USD traded mostly lower against the key currencies, hurt by a soft factory orders data. However, despite the recent batch of soft US economic data, three eminent Fed policymakers, Dennis Lockhart, Charles Plosser and William Dudley expressed optimism on the growth-outlook of the US economy and urged the central bank to continue with its tapering plans in the future.

The EUR rose against the USD as traders’ appetite for risk-taking increased after the ECB Chief, Mario Draghi, dismissed concerns on deflation by opining that inflation could gradually reach its 2% target by the end of 2016. Market participants also reacted positively to the ECB’s decision of keeping its interest rate unchanged at 0.25% and upgrading its 2014 growth outlook on the region’s economy by 0.1% to 1.2%.

In the UK, the Bank of England (BoE) kept its interest rate at a record-low of 0.5% and maintained the size of its asset-purchase facility at £375 billion.


EUR USD

This morning at 10:40 GMT, the EUR is trading at 1.3885 against the USD, 0.17% higher from the New York close. During the session, the pair traded at a high of 1.3885 and a low of 1.3857. Yesterday, the EUR traded 0.81% higher against the USD in the New York session, and closed at 1.3862, after the ECB upgraded its 2014 growth-outlook on the Euro-zone economy by 0.1% to 1.2% and after the ECB President, Mario Draghi, projected inflation in the region to reach its 2% goal by 2016.


The pair is expected to find its first support at 1.3779 and first resistance at 1.3938.


GBP USD

At 10:40 GMT, the GBP is trading at 1.6746 against the USD, tad higher from the New York close. On the macro economic front, the BoE reported that public expectations for annual consumer inflation rate in the UK economy fell to 2.8%, from an earlier expectation of 3.6%. During the session, the pair traded at a high of 1.6772 and a low of 1.6728. Yesterday, the British Pound traded 0.22% higher versus the Dollar in the New York session, and closed at 1.6741 even as the BoE refrained from altering its record-low interest rate of 0.5% and its asset-purchase facility of £375 billion.


The pair is expected to find its first support at 1.6694 and first resistance at 1.6788.


USD JPY

The USD is trading at 102.95 against the JPY at 10:40 GMT this morning, 0.17% lower from the New York close, ahead of the release of US payrolls data. Japan’s coincident index advanced more than market estimates while leading economic index in the nation registered a less than expected rise in January. Separately, data showed that foreign reserve in Japan rose for the second straight month to $1,288.2 billion in February. During the session, the pair traded at a high of 103.18 and a low of 102.88. In the New York session yesterday, the USD traded 0.38% higher against the JPY, and closed at 103.13.


The pair is expected to find its first support at 102.66 and first resistance at 103.21.


USD CHF

This morning at 10:40 GMT, the USD is trading at 0.8780 against the Swiss Franc, 0.27% lower from the New York close. In economic news, Switzerland’s unemployment rate came in unchanged at previous month’s level of 3.2%, broadly in-line with market estimates. Meanwhile, Swiss consumer inflation rose less-than-expected 0.1% MoM in February, compared to a 0.3% drop in the previous month. During the session, the pair traded at a high of 0.8806 and a low of 0.8781. In the New York session yesterday, the USD traded 0.69% lower against the CHF, and closed at 0.8804.


The pair is expected to find its first support at 0.8741 and first resistance at 0.8851.


USD CAD

At 10:40 GMT, the USD is trading at 1.0990 against the CAD, 0.05% higher from the New York close. BoC Deputy Governor, John Murray opined that weakness in global economic factors might have impacted Canada’s economic growth. During the session, the pair traded at a high of 1.1007 and a low of 1.0987. Yesterday, the USD traded 0.36% lower against the CAD in the New York session, and closed at 1.0985. The Canadian Dollar advanced after a report revealed that building permits in Canada soared 8.5% (MoM) in January and after the Ivey PMI rose to a four-month high reading of 57.2 in February.


The pair is expected to find its first support at 1.0949 and first resistance at 1.1033.


AUD USD

The AUD is trading at 0.9123 against the USD, at 10:40 GMT this morning, 0.37% higher from the New York close, as traders speculated that the RBA would not slash its interest rate in future after the central bank hinted towards a period of stability in interest rates. During the session, the pair traded at a high of 0.9130 and a low of 0.9081. AUD traded 0.35% higher against the USD in the New York session, and closed at 0.9089. 


The pair is expected to find its first support at 0.9067 and first resistance at 0.9155.


Gold

At 10:40 GMT, Gold is trading at $1348.28 per ounce, 0.16% lower from the New York close. This morning, Gold traded at a high of $1353.05 and a low of $1346.43 per ounce. In the New York session yesterday, the yellow metal traded 1.16% higher, and closed at $1350.50, as traders favored the yellow metal as a hedge against inflation after the ECB President, Mario Draghi hinted towards a gradual pick-up in the region’s inflation rate in the near future.    


Gold has its first support at $1336.47 and first resistance at $1356.90.


Silver

Silver is trading at $21.33 per ounce, 0.64% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $21.59 and a low of $21.29. Silver traded 1.42% higher against the USD in the New York session, and closed at $21.47, amid a weakness in the US Dollar.


Silver has its first support at $21.08 and first resistance at $21.62.


Crude Oil

At 10:40 GMT, Oil is trading at $101.71 per barrel, 0.30% lower from the New York close. This morning, Oil traded at a high of $102.03 and a low of $101.56. Yesterday, Oil traded 1.22% higher in the New York session, and closed at $101.98, as a weaker US Dollar and lingering tension over Ukraine crisis bolstered the demand prospect of the commodity. 


It has its first support at $100.53 and first resistance at $102.48.


Economic Snapshot


UK’s consumer inflation expectations declined

The consumer median inflation expectations for the next 12 months in the UK declined to 2.8%, compared to a rate of 3.6% recorded in November survey.


German wholesale price index fell unexpectedly in January

On a monthly basis, wholesale price index in Germany fell 0.1% in January, compared to a revised 0.3% rise in the previous month. Markets were expecting the wholesale price index to rise 0.6% in January.


Germany’s industrial production rose in-line with market estimates for January

On a seasonally adjusted monthly basis, industrial production in Germany rose 0.8% in January, in-line with market estimates and compared to a revised 0.1% increase witnessed in the preceding month.


France trade deficit widened in January

Trade deficit of France widened to €5.7 billion in January, following a deficit of €5.2 billion in the previous month. On the other hand, the budget deficit of France narrowed to €12.7 billion in January, following a deficit of €74.9 billion in the previous month.


Italy producer price index fell less than market expectations in January

On an annual basis, Italy’s producer price index fell 1.5% in January, compared to a 1.8% fall recorded in the previous month. Market had expected the producer price index to fall 1.7% in January.


Unemployment rate in Switzerland remained unchanged in February

On a non-seasonally adjusted basis, the unemployment rate in Switzerland remained unchanged at 3.5% in February, in line with market expectation and compared to a similar rate reported in the previous month.


Switzerland foreign currency reserves fell in February

Foreign currency reserves in Switzerland dropped to CHF 433.5 billion in February, from CHF 437.7 billion reported in the previous month.


Switzerland consumer price index rose less than market estimate in February

On a monthly basis, Switzerland’s consumer price index (CPI) increased 0.1% in February, compared to a 0.3% fall recorded in the previous month. Market had expected the consumer price index to rise 0.2% in February.


Japan’s leading economic index rose less than expected in January

The preliminary leading economic index in Japan rose to a level of 112.2 in January, lower than market expectation of a level of 112.4 and compared to a reading of 111.7 reported in the previous month. Meanwhile, the preliminary coincident index climbed to a level of 114.8 in January, compared to a revised level of 112.3 recorded in the prior month and higher than market expectation of a level of 114.6.


Australia foreign exchange reserves declined in February

Foreign exchange reserves in Australia dropped to A$ 51.8 billion in February, compared to reserves of A$ 53.3 billion recorded in the previous month.


Happy pips.

 
Weekly Forex Update

The greenback finished mixed against its key peers last week. The USD had started the week initially higher as concerns between Ukraine and Russia triggered risk aversion and boosted the demand for the safe haven USD.
In economic news, personal income and spending in the US both rose more-than-expected in January. The ISM manufacturing PMI climbed to a reading of 53.2 in February, while the Markit manufacturing PMI advanced to 57.1, led by a pick-up in new orders. In an upbeat sign for the labor market, first-time claims for unemployment fell more-than-expected for the week ended March 1. Additionally, non-farm payroll employment rose by 175,000 jobs in February compared to market expectations for an increase of about 150,000 jobs.
Elsewhere, Fed Chief Janet Yellen indicated that the central bank will do all  it can to ensure that the US recovery remains on track, as the economy is still not as healthy as it should be.
The Euro strengthened against the greenback after the European Central Bank (ECB) decided to keep its monetary policy unchanged and upgraded the Eurozone’s growth outlook. The central bank raised its forecast for the bloc to grow 1.2% in 2014, up from 1.1% previously, citing a gradual recovery in domestic and external demand. Additionally, the ECB chief indicated easing deflation risks in the region.
In the UK, the Bank of England (BoE) kept its interest rates steady at 0.50% and also agreed to maintain its quantitative easing stimulus at £375 billion, in line with market expectations. Ahead in the week, the outcome of UK inflation report will be key as it would provide an outlook from the central bank with regards to both inflation and growth.
The Yen fell against the greenback, after the Bank of Japan (BoJ) Deputy Governor, Kikuo Iwata reiterated that the central bank stands ready to ease monetary policy further if risks to its 2% inflation target arise.
The Canadian Dollar came under pressure on Friday on disappointing local jobs data. Data released by the Statistics Canada revealed that the economy lost 7,000 net jobs in February, giving back some of January’s gains and missing analysts estimates that the economy would add 15,000 jobs.
The Australian Dollar surged last week, as the Reserve Bank of Australia (RBA) kept its interest rate on hold at a record low of 2.5% and after the speech by its Governor, Glenn Stevens raised speculation among traders that the central bank’s easing phase is done. The Governor indicated that nation’s unemployment level will fall this year and re-affirmed that economic growth would pick-up and surpass 3% in 2014.

EUR USD
Last week, the EUR traded 0.53% higher against the USD and closed at 1.3875, after the ECB forecasted the Euro-zone economy to expand 1.2%, higher than the 1.1% growth it had projected earlier. Additionally, the ECB chief indicated easing deflation risks in the region, lending support to the common currency. The Euro also rose underpinned by improved risk appetite following the release of largely upbeat economic data in Europe. The manufacturing and services PMI in most of the countries in the bloc advanced more-than-expected in February. Additionally, upbeat retail sales and in line GDP data in the Euro-zone provided further support to the EUR. In Germany, industrial production increased for a third straight month in January, while the factory orders rebounded, signaling a strong pace of recovery in Euro-area's biggest economy. During the week, the pair traded at a high of 1.3916 and a low of 1.3707. The pair is expected to find its first support at 1.3749, with the next support expected at 1.3624. The first resistance is at 1.3958, and the next at 1.4042.

Looking ahead, a slew of economic data from the region will keep Euro investors on their toes. While the German trade and inflation data will keep markets interested, the Eurozone industrial, investor confidence and employment data are also important. Additionally, the ECB monthly report will also grab market attention this week.

GBP USD
In the last week, GBP traded 0.19% lower against the USD and closed at 1.6713, despite the release of positive domestic data in the UK. Manufacturing activity in the UK improved in February, while services sector activity in the nation slowed less-than-expected in the similar period. Additionally, housing market continues to strengthen as British mortgage approvals recorded its highest level since November 2007 in January. Furthermore, a report by Hometrack showed that house prices in the UK rose the most since April 2007 in February, while the Halifax house price index rose 2.4%. Moreover, the British construction sector expanded in February, but the pace of expansion eased. On Thursday, the BoE voted to leave it key interest rates unchanged at their record low of 0.50%, and also left its quantitative easing program steady at £375 billion. The pair traded at a high of 1.6788 and a low of 1.6640 in the previous week. GBPUSD is expected to find its first support at 1.6639, with the next at 1.6566. Resistance exists first at 1.6787, and then at 1.6862.

Going forward, traders will remain focus on the BoE’s inflation report. With markets expecting an early interest rate rise, any remarks hinting anything sooner will boost the Pound. Traders would also keep a tab on domestic manufacturing and industrial production data for further direction.

USD JPY
The USD traded 1.45% higher against the JPY over the past week, closing at 103.28, following the release of upbeat economic data in the US. Meanwhile, the Yen came under pressure after the BoJ Deputy Governor, Kikuo Iwata indicated that the central bank is prepared to adjust its monetary policy further, if required. In a speech at the Upper House Budget Committee, he reiterated the central bank's policy stance stating that bank will continue to assess the risks to its economic and price outlook, and make necessary changes to achieve the 2% inflation target. In economic news, the leading economic index advanced to a reading of 112.2 in January from 111.7 in December, recording its fifth consecutive increase. Additionally, the coincident economic index advanced to 114.8 in January from 112.3 in December. The pair traded at a high of 103.78 and a low of 101.19. The pair is expected to find its first support at 101.72, with the next support expected at 100.16. The first resistance is at 104.31, and the next at 105.34.

All eyes are now set on the Bank of Japan’s interest rate decision this week, along with other domestic economic data from Japan.

USD CHF
USD traded 0.27% lower against the CHF and closed at 0.8779 in the last week. In economic news, the SVME PMI rose to a seasonally adjusted reading of 57.6 in February, highlighting that manufacturing activity in Switzerland grew at the fastest pace since May 2011. Data released by the State Secretariat for Economic Affairs revealed that Swiss unemployment rate held steady at 3.2% in February. Moreover, consumer price index edged-up 0.1% (MoM), following a 0.3% decline recorded in January. Over the weekend, the Swiss National Bank Chairman, Thomas Jordan in a newspaper interview, indicated that the central bank would intervene and buy unlimited quantities of foreign currency to defend the Franc from strengthening further than 1.20 per Euro, if tensions in Ukraine push up the Swiss currency. During the period, the pair traded at a high of 0.8898 and a low of 0.8756. The first support is at 0.8724, and the next at 0.8669. Resistance exists first at 0.8866, and then at 0.8953.

Traders will keep a tab on real retail sales and industrial production data from Switzerland ahead in the week.

USD CAD
Last week, the USD traded 0.21% higher against the CAD and closed at 1.1087. At its policy meeting, the Bank of Canada left its benchmark interest rates on hold at 1.00%, in line with market expectations. The central bank indicated that the nation’s economic growth in the fourth quarter of 2013 was slightly stronger than anticipated and added that it still expects growth of 2.5% in 2014. However, the bank stated that inflation is expected to remain below its target for some time and the direction of the next change in the policy rate will be data dependent. In economic news, the value of building permits issued in Canada surged in January. The Ivey purchasing managers index rose to a reading of 57.2 in February. On Friday, the Statistics Canada reported that the economy lost 7,000 jobs in February, compared to expectations for a 15,000 rise, after a 29,400 increase recorded in January. Moreover, unemployment rate remained unchanged at 7.0% in February. A separate report revealed that Canada's trade deficit narrowed to C$0.18 billion in January, from C$0.92 billion in December. USDCAD traded at a high of 1.1119 and a low of 1.0952 in the previous week. The first support is at 1.0986, with the next at 1.0886. The first resistance is at 1.1153, while the next is at 1.1220.

With a light Canadian economic calendar this week, a slew of economic releases from the US will likely hold the key for determining the near term trend in the Canadian Dollar.

AUD USD
AUD traded 1.61% higher against the USD last week, and closed at 0.9068, following the release of upbeat domestic economic data and after the after the RBA Governor, Glenn Stevens indicated  that he saw no reason to slash interest rates further. At its policy meeting, the Australian central bank maintained its key interest rate unchanged for a seventh successive month at 2.5% and indicated a period of stability in monetary policy, citing high inflationary pressures. In a post-decision statement, the Governor stated that the monetary policy is appropriate to boost sustainable growth in demand. In economic news, the Australian economy expanded faster than expected in the last three months of the year. The economy grew at a seasonally adjusted 0.8% in the December quarter, taking the annual growth rate to 2.8%. The total number of building approvals jumped a seasonally adjusted 6.8% (MoM) in January, while retail sales advanced 1.2%. Moreover, Australia’s merchandise trade surplus rose to A$1.4 billion in January, its best in two-and-a-half-years.  During the week, the pair traded at a high of 0.9136 and a low of 0.8891. The first support is at 0.8927, and the next at 0.8787. The first resistance is at 0.9172, and the next at 0.9277.

Apart from external cues, traders would keep an eye on Australian economic data which includes unemployment rate, National Australia Bank's business confidence and Westpac’s consumer confidence data.

Gold
In the prior week, Gold traded 1.02% higher against the USD and closed at USD1339.98, as risk aversion prevailed during the week following the news of likely war between Russia and the Ukraine. However, gains in the precious metals were kept in check following the release of mostly positive economic data from the US during the last week. Tensions grew over weekend, following the news that Russia has suspended nuclear arms inspections treaty and blocked US military from checking nuclear weapons in response to US move to suspend military cooperation with Moscow. The yellow metal traded at a high of 1354.87 and a low of 1326.67 in the previous week. Gold is expected to find support at 1326.14 and the next at 1312.31. The first resistance is at 1354.34, while the next is at 1368.71.

In the week ahead, market participants will keenly await data from the US, especially the Reuters/Michigan consumer sentiment and retails sales report for hints on the strength of the nation’s recovery and the Fed’s future course of action for its monetary policy. Moreover, political developments in Ukraine will be closely watched for further cues.

Crude Oil
Oil prices traded flat against the USD in the last week and closed at USD102.58. However, prices remained supported by a combination of upbeat economic data in the US and escalating tensions in Ukraine’s Crimean peninsula. A surprisingly strong US jobs report on Friday bolstered optimism about the economy, raising hopes for strong oil demand from world’s largest economy. Moreover, geopolitical uncertainty from the Ukraine crisis escalated after the Russian President, Vladimir Putin ignored warnings from its US counterparts over Moscow's military intervention in Crimea. On the oil inventory front, the US Energy Information Administration reported the US crude oil inventories rose by 1.4 million barrels for the week ended February 28. Moreover, the American Petroleum Institute reported that US crude supplies rose by 1.2 million barrels during the similar period. Oil traded at a high of 105.22 and a low of 100.13 in the previous week. Oil has its first major support at 100.07, while the next support exists at 97.55. The first resistance is at 105.16, and the next at 107.73.

Traders would keep a watchful eye on the situation in the Ukraine, as any flare-up in the situations could send oil prices higher.

Happy pips.
 
Forex Market Update

This morning, the USD is trading mostly higher against most of the major currencies.
This morning, the BoJ kept its monetary stance unchanged at its March policy meeting but raised concerns over the weakness in the nation’s export sector. However, the BoJ Governor, Haruhiko Kuroda stated that the weakness in the nation’s exports is temporary and that the BoJ need not adjust its policy as of now.
Yesterday, in the New York session, the greenback traded mostly higher against the key currencies. The Chicago Fed President, Charles Evans indicated that the US Fed would continue trimming its asset purchase at a $10 billion pace while hinting that policymakers were discussing a new forward guidance, which would give more emphasis on “qualitative” aspect rather than the current numerical threshold.
The EUR declined against the USD after an ECB official, Christian Noyer highlighted policymaker’s grief over the strengthening Euro, which according to them was creating additional downward pressure on the economy and inflation. Separately, IMF’s Olivier Blanchard opined that the Euro-zone economy is still exposed to deflation risks and that prolonged low inflation could make necessary adjustments more difficult.
The GBP lost ground after the BoE policymaker Charlie Bean warned that a hike in interest rate may be delayed if the currency continued to rise, as it could impact the nation’s export-driven ability.

EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3861 against the USD, 0.12% lower from the New York close. Early morning, an official data showed that Germany’s trade surplus narrowed in January, as imports in the nation grew faster than exports. During the session, the pair traded at a high of 1.3880 and a low of 1.3853. Yesterday, the EUR traded 0.06% lower against the USD in the New York session, and closed at 1.3877, after the ECB’s Christian Noyer stated that a stronger Euro created downward pressure on the economy and inflation.

The pair is expected to find its first support at 1.3842 and first resistance at 1.3885.

GBP USD
At 9:40 GMT, the GBP is trading at 1.6638 against the USD, marginally lower from the New York close. Data showed that UK industrial production came in below expectations, while the manufacturing production rose more than forecast in January. During the session, the pair traded at a high of 1.6655 and a low of 1.6623. Yesterday, the British Pound traded tad lower versus the Dollar in the New York session, and closed at 1.6643, after the BoE’s Charlie Bean hinted that a further appreciation in the GBP could hamper Britain’s trading performance and compel the BoE to keep its interest rate lower for a longer time.

The pair is expected to find its first support at 1.6610 and first resistance at 1.6670.

USD JPY
The USD is trading at 103.32 against the JPY at 9:40 GMT this morning, slightly higher from the New York close. Earlier today, the BoJ kept its monetary policies intact but cited weakness in the nation’s export sector. However, later, the BoJ Governor, Haruhiko Kuroda stated that the slackness in the export sector is temporary and that the central bank did not see any reason to alter its policy as of now. During the session, the pair traded at a high of 103.44 and a low of 103.25. In the New York session yesterday, the USD traded marginally lower against the JPY, and closed at 103.29.

The pair is expected to find its first support at 103.16 and first resistance at 103.45.

USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8787 against the Swiss Franc, 0.11% higher from the New York close. In economic news, on a quarterly basis, industrial production in Switzerland rose at a slower pace than expected in the fourth quarter. During the session, the pair traded at a high of 0.8805 and a low of 0.8779. In the New York session yesterday, the USD traded flat against the CHF, and closed at 0.8777.

The pair is expected to find its first support at 0.8771 and first resistance at 0.8804.

USD CAD
At 9:40 GMT, the USD is trading at 1.1125 against the CAD, 0.17% higher from the New York close. During the session, the pair traded at a high of 1.1133 and a low of 1.1109. Yesterday, the USD traded slightly lower against the CAD in the New York session, and closed at 1.1106. The Canadian Dollar benefited from a report that showed housing starts in Canada rose more than market estimates in February.

The pair is expected to find its first support at 1.1098 and first resistance at 1.1142.

AUD USD
The AUD is trading at 0.9030 against the USD, at 9:40 GMT this morning, 0.10% higher from the New York close. Data releases overnight showed that, the NAB business conditions in Australia registered a flat reading in February while the NAB business confidence fell to a reading of 7.0 in the previous month. During the session, the pair traded at a high of 0.9052 and a low of 0.9016. AUD traded 0.21% lower against the USD in the New York session, and closed at 0.9021.

The pair is expected to find its first support at 0.9009 and first resistance at 0.9052.

Gold
At 9:40 GMT, Gold is trading at $1348.26 per ounce, 0.62% higher from the New York close. Separately, the SPDR Gold Trust reported that the gold holdings in the world’s largest exchange-traded product backed by the metal rose to its highest level since December 20, 2013. This morning, Gold traded at a high of $1349.21 and a low of $1337.95 per ounce. In the New York session yesterday, the yellow metal traded 0.17% higher, and closed at $1340.00, as demand for safe-haven assets rose after reports showed that Russian army attacked Ukraine military post in Crimea.

Gold has its first support at $1338.65 and first resistance at $1353.54.

Silver
Silver is trading at $21.03 per ounce, 0.83% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $21.05 and a low of $20.80. Silver traded 0.19% lower against the USD in the New York session, and closed at $20.85, mirroring losses in the prices of industrial metals.

Silver has its first support at $20.86 and first resistance at $21.12.

Crude Oil
At 9:40 GMT, Oil is trading at $101.47 per barrel, 0.60% higher from the New York close, as escalating tensions in Ukraine weighed on the supply prospect of the commodity. This morning, Oil traded at a high of $101.50 and a low of $100.86. Yesterday, Oil traded 0.11% lower in the New York session, and closed at $100.90, as a fall in China’s exports sparked fresh concerns on the demand-outlook of the commodity.

It has its first support at $101.03 and first resistance at $101.73.

Economic Snapshot

UK BRC retail sales declined unexpectedly in February
On an annual basis, the BRC like-for-like retail sales in the UK dropped 1.0% in February, compared to a 3.9% rise recorded in the previous month. Markets were expecting the UK retail sales to rise 1.8% in February.

UK’s industrial production rose at a slower pace than expected in January
On a month-on-month basis, industrial production in the UK rose 0.1% in January, less than analysts’ call for a 0.2% rise and compared to a 0.5% increase recorded in the preceding month. Meanwhile, on a monthly basis, manufacturing production in the UK rose more-than-expected 0.4% in January, compared to a similar pace of rise witnessed in the previous month.

German trade surplus narrowed less than expected in January
On a seasonally adjusted basis, Germany’s trade surplus narrowed to €17.2 billion in January, less than market forecasts and compared to a revised surplus of €18.3 billion recorded in the previous month. On a monthly basis, seasonally adjusted imports in Germany rose 4.1% in January, following a revised fall of 1.4% in the preceding month. On a seasonally adjusted monthly basis, exports in Germany rose 2.2% in January, following a revised fall of 1.0% recorded in the preceding month.

Germany labor costs rose at a faster pace in the Q4 2013
On a working day adjusted annual basis, labor costs in Germany rose 2.0% in Q4 2013, compared to a revised increase of 1.9% in the previous quarter.

Italy’s GDP declined more than forecast in the fourth quarter
On an annual basis, Italy’s GDP declined 0.9% in the fourth quarter, more than market expectations for a 0.8% drop and compared to a revised 0.8% fall registered in the preceding quarter.

Switzerland industrial production rose at a slower pace in Q4 2013
On an annual basis, industrial production in Switzerland rose 0.4% in Q4 2013, compared to a revised increase of 0.5% in the previous quarter. Markets were expecting industrial production to climb 1.0% in the Q4 2013.

BoJ kept its monetary policy unchanged
The Bank of Japan (BoJ) left its benchmark interest rate unchanged at 0.10% and has maintained its asset purchase program. The central bank has also kept its inflation outlook unchanged while reiterating that the nation's economy continues to recover at a moderate pace and that “inflation expectations appear to be rising on the whole.”

Japan machine tool orders rose at a slower pace in February
On an annual basis, preliminary machine tool orders in Japan rose 26.0% in February, following an increase of 40.3% recorded in the preceding month.

No need to adjust monetary policy, indicated BoJ’s Haruhiko Kuroda
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, in his press conference, stated that there is need to adjust monetary policy as the economy would continue to exceed its potential growth rate. He reiterated that the nation’s economy is on track to achieve the central bank's 2.0% inflation target.

Australia NAB business confidence fell in February
The NAB business confidence in Australia has dropped to a level of 7.0 in February, compared to a revised reading of 9.0 recorded in the previous month. Meanwhile, business conditions in Australia remained flat in February, from a revised level of 5.0 in the previous month.

Happy pips.

 

 

 

Forex Market Update 13Mar14


This morning, the greenback is trading lower against the major currencies.

The EUR is trading higher today, extending its previous session’s gains following the ECB official, Benoit Coeure’s yesterday’s comments that he did not see deflation signs in the Euro-zone economy. However, downbeat data from China this morning did undermine the upward momentum of the EUR for some time. Meanwhile, the ECB, in its monthly report, reiterated that its medium to long term inflation expectations continue to remain firmly anchored below, but close to its 2% target. Additionally, the report indicated that interest rates would continue to be low for an extended period of time, to boost the recovery in the region.

Demand for the AUD rose after an official data from Australia showed that the economy added nearly three times more number of jobs in February than analysts’ expectations.

The NZD is trading higher against the USD after the Reserve Bank of New Zealand raised its benchmark interest rate and hinted at plans to end its stimulus measures faster than previously estimated to contain inflation.

Yesterday, the greenback traded mostly lower in the New York session against the key currencies. In a testimony before the Senate Banking Committee, Stanley Fischer, a nominee for Fed Vice Chairman, stated that the US economy would require the US Fed’s accommodative stance to achieve both maximum employment and price stability in the nation.


EUR USD

This morning at 9:40 GMT, the EUR is trading at 1.3956 against the USD, 0.39% higher from the New York close. Earlier today, ECB’s Benoit Coeure hinted that the ECB stands prepared to act if real interest rate for borrowers does not progressively fall in the near future. During the session, the pair traded at a high of 1.3968 and a low of 1.3900. Yesterday, the EUR traded 0.07% higher against the USD in the New York session, and closed at 1.3902, after an ECB official, Benoit Coeure stated that he does not see any signs of deflation in the region’s economy.


The pair is expected to find its first support at 1.3885 and first resistance at 1.3997.


GBP USD

At 9:40 GMT, the GBP is trading at 1.6687 against the USD, 0.39% higher from the New York close. Early morning, RICS reported that house prices in the UK rose at a slowest pace in six months in February. During the session, the pair traded at a high of 1.6694 and a low of 1.6615. Yesterday, the British Pound traded tad higher versus the Dollar in the New York session, and closed at 1.6622. The BoE Deputy Governor, Charlie Bean indicated that the central bank did not see any urgency in hiking its interest rate, which according to him was solely dependent on the economy’s performance.


The pair is expected to find its first support at 1.6605 and first resistance at 1.6731.


USD JPY

The USD is trading at 102.53 against the JPY at 9:40 GMT this morning, 0.20% lower from the New York close, ahead of the release of the minutes from the BoJ’s latest policy meeting. Overnight, data showed that machinery orders in Japan rose at the fastest pace in almost a year in January. During the session, the pair traded at a high of 102.88 and a low of 102.46. In the New York session yesterday, the USD traded marginally higher against the JPY, and closed at 102.74.


The pair is expected to find its first support at 102.33 and first resistance at 102.80.


USD CHF

This morning at 9:40 GMT, the USD is trading at 0.8708 against the Swiss Franc, 0.38% lower from the New York close. During the session, the pair traded at a high of 0.8750 and a low of 0.8706. In the New York session yesterday, the USD traded 0.17% lower against the CHF, and closed at 0.8741, amid lack of economic releases.


The pair is expected to find its first support at 0.8678 and first resistance at 0.8758.


USD CAD

At 9:40 GMT, the USD is trading at 1.1060 against the CAD, 0.57% lower from the New York close. During the session, the pair traded at a high of 1.1124 and a low of 1.1059. Yesterday, the USD traded 0.21% lower against the CAD in the New York session, and closed at 1.1123. On the economic front, home prices in Canada rose for the second straight month in February, pushing the Teranet-National Bank composite house price index to a record high.


The pair is expected to find its first support at 1.1022 and first resistance at 1.1126.


AUD USD

The AUD is trading at 0.9069 against the USD, at 9:40 GMT this morning, 0.86% higher from the New York close, after official data showed that employers added 47,300 new jobs in the Australian economy, almost three times more than market expectations. Meanwhile, unemployment rate in the Australian economy came in unchanged at previous month’s level of 6.0%. During the session, the pair traded at a high of 0.9083 and a low of 0.8994. AUD traded 0.48% higher against the USD in the New York session, and closed at 0.8992.


The pair is expected to find its first support at 0.8971 and first resistance at 0.9125.


Gold

At 9:40 GMT, Gold is trading at $1372.45 per ounce, 0.40% higher from the New York close, as lingering tensions over Ukraine lured investors to the commodity’s safe-haven appeal. This morning, Gold traded at a high of $1375.21 and a low of $1365.00 per ounce. In the New York session yesterday, the yellow metal traded 0.15% higher, and closed at $1367.05.


Gold has its first support at $1359.76 and first resistance at $1380.18.


Silver

Silver is trading at $21.41 per ounce, 0.38% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $21.47 and a low of $21.25. Silver traded 1.10% higher against the USD in the New York session, and closed at $21.32, as a weaker US Dollar and concerns over Ukraine crisis bolstered the demand-outlook of the metal.


Silver has its first support at $21.00 and first resistance at $21.64.


Crude Oil

At 9:40 GMT, Oil is trading at $97.88 per barrel, 0.30% lower from the New York close. This morning, Oil traded at a high of $98.48 and a low of $97.83. Yesterday, Oil traded 0.12% lower in the New York session, and closed at $98.18, after the EIA reported a more-than-expected rise of 6.2 million barrels in the US crude stockpiles. However, the losses were kept in check after OPEC forecasted a rise in global oil demand for 2014 and turmoil in Libya.


It has its first support at $97.24 and first resistance at $98.83.


Economic Snapshot


UK RICS house price balance fell in February

The RICS house price balance in the UK dropped to a level of 45.0% in February, following a revised increase of 52.0% in the preceding month.


ECB reiterated to maintain the high degree of monetary accommodation

The European Central Bank (ECB) in its monthly report for March 2014, indicated that the central bank’s inflation expectations for the Euro-zone over the medium to long term continue to be firmly anchored below, but close to 2.0%. The central bank reiterated that its interest rates would remain at present or lower levels for an extended period of time.


Fed’s Fischer called for continued accommodative policy amid labor market woes

Stanley Fischer, the incoming Federal Reserve (Fed) Vice-Chairman, opined that the US still needs expansionary monetary policy, citing the continued weakness in the nation’s labor market.


France EU normalized consumer price index rose above expectations in February

On an annual basis, the EU normalized consumer price index (CPI) in France increased 1.1% in February, compared to a 0.8% rise reported in the previous month. Markets were expecting the EU normalized CPI to rise 1.0% in February.


Italy Consumer Price Index rose less than the preliminary estimate in February

On an annual basis, the EU normalized final consumer price index in Italy rose 0.4% in February, compared to 0.5% rise reported in the preliminary estimate, following a rise of 0.6% in the previous month. Meanwhile, on an annual basis, the final consumer price index in Italy rose 0.5% in February, compared to a 0.7% rise recorded in the previous month.


Spain retail sales rose unexpectedly in January

On an annual basis, retail sales in Spain advanced 0.5% in January, compared to a 1.0% decrease in the previous month. Markets were expecting retail sales to drop 0.8% in January.


Australia consumer inflation expectations fell in March

Consumer inflation expectations in Australia declined to 2.1% in March, compared to 2.3% recorded in the previous month.


Australia’s unemployment rate remained steady in February

On a seasonally adjusted basis, unemployment rate in Australia remained unchanged at 6.0% in February, in line with market expectations and compared to a similar rate in the previous month. Meanwhile, seasonally adjusted number of people employed in Australia rose by 47.3K in February, compared to a revised rise of 18.0K in the previous month.


China industrial production rose at a slower pace in February

On an annual basis, industrial production in China rose 8.6% in February, compared to a 9.7% rise recorded in December. Markets were expecting industrial production to rise 9.5% in February.


China urban fixed-asset investment rose at a slower pace in February

On a year-to-date basis, fixed assets investments excluding rural household in China rose 17.9% in the first two months of 2014, less than market expectations for a 19.4% rise and compared to a 19.6% increase recorded in 2013.


China retail sales rose at a slower pace in February

On an annual basis, retail sales in China advanced 11.8% in February, compared to a 13.6% increase recorded in December. Markets were expecting retail sales to rise 13.5% in February.


Happy pips.

 

Forex Market Update 19Mar14


This morning, the greenback is trading higher against most of the major currencies, ahead of the Federal Reserve policy decision.

The GBP jumped higher as claimant count data suggested an improvement in UK job conditions and after minutes of BoE‘s latest meeting revealed no change in its existing monetary policy.

Early morning, the BoJ Governor Haruhiko Kuroda expressed optimism that the Japanese economy was inching towards the central bank's 2% inflation target with expectations of growth above its potential even after a sales tax rise.

The AUD is trading lower against the USD as Australia’s largest export market, China, witnessed the collapse of a private developer, raising concerns of an economic slowdown in the latter.

The CAD came under pressure after the BoC Governor Stephen Poloz projected a weak domestic growth in the first quarter of the year. He further highlighted the possibility of an interest-rate cut if inflation continued to undershoot the BoC’s 2% target.

Yesterday, the USD received support as the US building permits data rose to a four month high in February, and after the consumer price index came in line with expectations. However, gains were kept in check after the US housing starts fell for a third consecutive month.


EUR USD

This morning at 9:40 GMT, the EUR is trading at 1.3907 against the USD, 0.19% lower from the New York close. During the session, the pair traded at a high of 1.3935 and a low of 1.3910. Yesterday, the EUR traded 0.22% higher against the USD in the New York session, and closed at 1.3934, after risk appetite received a boost from President Vladimir Putin’s statement that Russia has no intention to divide Ukraine further.


The pair is expected to find its first support at 1.3876 and first resistance at 1.3941.


GBP USD

At 9:40 GMT, the GBP is trading at 1.6620 against the USD, 0.16% higher from the New York close, after the number of unemployed persons in the UK fell more than expected by 34.6k in January, following a 33.9K drop witnessed in December.  The BoE, in its minutes, revealed that all policymakers opted to keep the policies loose. It added that the strengthening GBP was putting pressure on CPI. During the session, the pair traded at a high of 1.6643 and a low of 1.6592. Yesterday, the British Pound traded 0.06% higher versus the Dollar in the New York session, and closed at 1.6593.


The pair is expected to find its first support at 1.6562 and first resistance at 1.6660.


USD JPY

The USD is trading at 101.65 against the JPY at 9:40 GMT this morning, 0.22% higher from the New York close. The JPY came under pressure, after Japan’s trade deficit exceeded market estimates in February. Meanwhile, the BoJ Governor asserted that the Japanese economy was on path to achieve the central bank’s 2% inflation target. During the session, the pair traded at a high of 101.71 and a low of 101.35. In the New York session yesterday, the USD traded 0.07% lower against the JPY, and closed at 101.43.


The pair is expected to find its first support at 101.35 and first resistance at 101.87.


USD CHF

This morning at 9:40 GMT, the USD is trading at 0.8754 against the Swiss Franc, 0.29% higher from the New York close. On the macro front, economic sentiment indicator in Switzerland tumbled to a reading of 19.0 in March, from a reading of 28.7 reported in the previous month. During the session, the pair traded at a high of 0.8758 and a low of 0.8733. In the New York session yesterday, the USD traded 0.22% lower against the CHF, and closed at 0.8729.


The pair is expected to find its first support at 0.8729 and first resistance at 0.8774.


USD CAD

At 9:40 GMT, the USD is trading at 1.1169 against the CAD, 0.3% higher from the New York close. During the session, the pair traded at a high of 1.1179 and a low of 1.1125. Yesterday, the USD traded 0.92% higher against the CAD in the New York session, and closed at 1.1136. The CAD was weighed down by BoC Governor Stephen Poloz’s tepid economic growth forecast for the first quarter, and further comments that an interest rate cut could not be ruled out.


The pair is expected to find its first support at 1.1069 and first resistance at 1.1224.


AUD USD

The AUD is trading at 0.9114 against the USD, at 9:40 GMT this morning, 0.2% lower from the New York close, as economic outlook of China, its largest trade partner, got clouded following the collapse of a private developer which weighed on China’s stocks and the Yuan. During the session, the pair traded at a high of 0.9140 and a low of 0.9112. AUD traded 0.22% higher against the USD in the New York session, and closed at 0.9132.


The pair is expected to find its first support at 0.9077 and first resistance at 0.9146.


Gold

At 9:40 GMT, Gold is trading at $1347.71 per ounce, 0.66% lower from the New York close, as investors remain cautious ahead of the Federal Reserve monetary policy decision, while also further evaluating the situation in Ukraine. This morning, Gold traded at a high of $1359.93 and a low of $1345.51 per ounce. In the New York session yesterday, the yellow metal traded 0.35% higher, and closed at $1356.65.


Gold has its first support at $1340.88 and first resistance at $1359.17.


Silver

Silver is trading at $20.73 per ounce, 0.63% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $20.96 and a low of $20.67. Silver traded 1.01% higher against the USD in the New York session, and closed at $20.86.


Silver has its first support at $20.54 and first resistance at $21.00.


Crude Oil

At 9:40 GMT, Oil is trading at $99.65 per barrel, 0.20% higher from the New York close. This morning, Oil traded at a high of $99.69 and a low of $99.34. Yesterday, Oil traded 1.21% higher in the New York session, and closed at $99.48, after a pipeline company announced that it would double the capacity of a pipeline connecting Oklahoma storage with Gulf Coast refineries sooner than previously expected. Meanwhile, the API stated that crude inventories rose by 5.9 million barrels for the week ended 14 March.


It has its first support at $98.56 and first resistance at $100.26.


Economic Snapshot


UK average earnings rose higher than market estimate in January

The National Statistics reported that on an annual basis, average weekly earnings including bonus in the UK rose 1.4% in January, compared to a revised rise of 1.2% recorded in the previous month. Markets were expecting average earnings including bonus to rise 1.3% in January. Meanwhile, the average earnings excluding bonus in the UK climbed 1.3% in January, following an increase of 1.0% recorded in the preceding month.


UK unemployment remained steady in January

The National Statistics reported that on a three months basis, the ILO unemployment rate in the UK remained unchanged at 7.2% in January, in line with market expectations and compared to the previous month. Meanwhile, the number of people employed in the UK increased by 105.0 K in January, compared to a rise of 193.0 K employees recorded in the previous month. Additionally, the number of people claiming unemployment benefits in the UK dropped by 34.6 K in February, compared to a revised fall of 33.9 K in the previous month.


Britain's economic recovery is broadening, indicated BoE minutes

The Bank of England (BoE), in its minutes of the monetary policy meeting held on 5-6 March, indicated that the nation’s economic recovery is broadening but has some way to go before it is sustainable. Meanwhile, the minutes showed the central bank officials voted unanimously to keep the benchmark rate unchanged at 0.5% this month and to maintain the assets purchase programme at GBP 375.0 billion.


France current account widened in January

The Bank of France reported that the current account deficit in France widened to €4.5 billion in January, from a revised deficit of €1.6 billion recorded in the previous month.


Swiss economic expectation index dropped more than expected in March, indicated ZEW

The Centre for European Economic Research (ZEW) reported that the economic expectations index in Switzerland declined to a reading of 19.0 in March, more than market expectations for a level of 25.0 and from a reading of 28.7 recorded in the previous month.


Japan’s all industry activity index increased less than anticipated in January           

The Ministry of Economy, Trade and Industry reported that on a monthly basis, the all industry activity index in Japan rose 1.0% in January, less than market expectation for a 1.1% increase and following a revised decrease of 0.3% recorded in the preceding month.


Japan final leading economic index advanced more than the preliminary estimate in January

The Cabinet Office of Japan reported that final leading economic index in Japan rose to a level of 113.1 in January, higher than the flash estimate of 112.2 and compared to a revised reading of 111.9 reported in the previous month. Meanwhile, the final coincident index rose to a level of 115.2 in January, more than the preliminary estimate of 114.8 and compared to a revised level of 112.2 recorded in the previous month.


Japan nationwide department store sales rose in February

The Japan Department Store Association reported that on an annual basis, nationwide department store sales in Japan rose 3.0% in February, following a rise of 2.9% recorded in the preceding month.


BoJ’s Kuroda reiterated 2% price stability target

The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, reinforced that the Japanese economy is on the path to achieve the central bank’s 2% inflation target and that the BoJ would alter its policy appropriately to attain the same. Kuroda further stated that the central bank is only halfway towards achieving its inflation target and that its focus continues to remain on dispelling deflationary pressures in the nation.


Australia internet skilled vacancies rose at a slower pace in February

The Department of Education, Employment and Workplace Relations (DEEWR) reported that on a monthly basis, internet skilled vacancies in Australia increased 0.2% in February, following a revised increase of 1.0% recorded in the preceding month.


Happy pips.

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