DirectFX : Economic Snapshot

Forex Market Update

This morning, the greenback is trading higher against most of the major currencies, as risk aversion continue to dominate market sentiment, as investors continue to monitor negotiations among US lawmakers to avoid the looming fiscal cliff crisis.

With many traders around the world off work for Christmas, foreign-exchange action was relatively subdued for many of the top-traded currencies.

In China, the State Administration of Foreign Exchange reported that nation's current account surplus in the third quarter was $70.8 billion. The capital and financial account showed a deficit of $51.7 billion during the period. The surplus on goods account was $102.9 billion, while services account showed a deficit of $29.7 billion.

The Japanese Yen headed lower against the US Dollar, after minutes from the Bank of Japan's November meeting showed some determination to drive the nation's currency lower. In a key development, both houses of Japan's Parliament confirmed Shinzo Abe as the nation's seventh Prime Minister in six years, returning him to the office he left in 2007.

Meanwhile, Chinese rating agency, Dagong Global Credit Rating, yesterday put the US sovereign debt on a 'Negative' watch, citing a lack of political consensus on how to tackle nation's debt problem over the long term.

The US is to publish data on house price inflation as well as a report on manufacturing activity in Richmond later in the trading day.

The greenback traded higher in the New York session yesterday, against the key currencies.

EUR USD

This morning at 10:40 GMT, the EUR is trading at 1.3210 against the USD, 0.20% higher from the New York close, with trading expected to remain subdued as holidays in many countries limit activity. Meanwhile, Portuguese Prime Minister, Pedro Passos Coelho in a televised interview late yesterday, stated that most measures in aid program have been concluded or are at finishing stage. During the session, the pair traded at a high of 1.3213 and a low of 1.3170. Yesterday, the EUR traded marginally lower against the USD in the New York session, and closed at 1.3183.

The pair is expected to find its first support at 1.3182 and first resistance at 1.3225.

GBP USD

At 10:40 GMT, the GBP is trading at 1.6135 against the USD, 0.06% higher from the New York close. During the session, the pair traded at a high of 1.6137 and a low of 1.6112. Yesterday, the British Pound traded 0.04% lower versus the Dollar in the New York session, and closed at 1.6126. The Pound fell against the US Dollar in subdued trade, as concerns that the US officials would not manage to conclude a deal in order to avoid a fiscal crisis continued to dominate market sentiment.

The pair is expected to find its first support at 1.6119 and first resistance at 1.6144.

USD JPY

The USD is trading at 85.33 against the JPY at 10:40 GMT this morning, 0.65% higher from the New York close. The Yen weakened, as Shinzo Abe was approved as Japan's Prime Minister today and as expectations grew that he would push the central bank to increase cash infusions into a deflation-plagued economy. Yesterday, minutes of the Bank of Japan's November meeting showed that a board member suggested conducting open-ended asset purchases. During the session, the pair traded at a high of 85.48 and a low of 84.78. In the New York session yesterday, the USD traded flat against the JPY, and closed at 84.78.

The pair is expected to find its first support at 84.79 and first resistance at 85.67.

USD CHF

This morning at 10:40 GMT, the USD is trading at 0.9143 against the Swiss Franc, 0.20% lower from the New York close. During the session, the pair traded at a high of 0.9168 and a low of 0.9139. In the New York session yesterday, the USD traded slightly higher against the CHF, and closed at 0.9161.

The pair is expected to find its first support at 0.9119 and first resistance at 0.9169.

USD CAD

At 10:40 GMT, the USD is trading at 0.9934 against the CAD, 0.12% higher from the New York close. During the session, the pair traded at a high of 0.9934 and a low of 0.9911. Yesterday, the USD traded 0.22% lower against the CAD in the New York session, and closed at 0.9922.

The pair is expected to find its first support at 0.9911 and first resistance at 0.9951.

AUD USD

The AUD is trading at 1.0364 against the USD, at 10:40 GMT in a subdued Christmas holiday this morning, marginally lower from the New York close, with attention fixed on faltering talks in the US aimed at avoiding the so-called fiscal cliff. Traders said that comments made by Japan's incoming Prime Minister, Shinzo Abe, about the need to devalue the Yen were absorbed, but with Japan closed for a holiday there was little reaction in markets. During the session, the pair traded at a high of 1.0379 and a low of 1.0356. AUD traded tad lower against the USD in the New York session, and closed at 1.0366.

The pair is expected to find its first support at 1.0330 and first resistance at 1.0396.

Gold

This morning, at 10:40 GMT, Gold is trading at $1658.20 per ounce, 0.05% higher from previous close. This morning, Gold traded at a high of $1659.20 and a low of $1651.62 per ounce.

Gold has its first support at $1653.48 and first resistance at $1661.06.

Silver

At 10:40 GMT this morning, Silver is trading 0.13% higher at $29.94 per ounce, from previous close. This morning, Silver traded at a high of $30.02 and a low of $29.83 per ounce.

Silver has its first support at $29.84 and first resistance at $30.03.

Crude Oil

At 10:40 GMT, Oil is trading at $89.17 per barrel, 0.60% higher, in a thin trade, as investors continued to monitor negotiations among US lawmakers to avoid the looming fiscal cliff crisis. This morning, Oil traded at a high of $89.21 and a low of $88.59.

It has its first support at $88.77 and first resistance at $89.39.

Economic Snapshot

Japanese small business confidence index improved in December

The small business confidence index in Japan increased to a reading of 43.8 in December, first time in nine months, compared to a reading of 43.3 posted in November.

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