Forex Market Update
This morning, the greenback is trading higher against most of the major currencies, following muted risk appetite among investors. Yesterday, the initial jobless claims in the US rose to 371,000 for week ended 5th January, from the revised figure of 367,000 in the previous week.
Today, the Federal Reserve Bank of Minneapolis President, Narayana Kocherlakota stated that the Federal Reserve's policy of zero interest rates and asset purchases is insufficient, given forecasts for weak economic growth and low inflation for years to come.
The EURSD found support in yesterdays' session, after the European Central Bank (ECB) left the key interest rates unchanged at a record low.
Separately, late yesterday, Moody's Investors Service slashed the credit rating of Cyprus by three notches to Caa3 from B3, with a 'negative' outlook.
The Pound slipped against the greenback in the Asian session, amid downbeat UK industrial and manufacturing activity data. Yesterday, the GBP gained, after the Bank of England (BoE) left its bond buying program unchanged at £375.0 billion and interest rates at record low of 0.5%.
The Japanese Yen came under pressure, after Japanese Cabinet, this morning, approved ¥10.3 trillion of fiscal stimulus to boost economic growth. The currency was further pressurized, after the country posted wider-than-expected current account and trade deficits.
The greenback traded lower in the New York session yesterday, against the key currencies.
This morning at 10:40 GMT, the EUR is trading at 1.3269 against the USD, marginally higher from the New York close. The current account deficit in France remained unchanged at €2.9 billion in November, compared to previous month. In Spain, industrial production fell 7.2% (YoY) in November, compared to 3.1% drop in the previous month. During the session, the pair traded at a high of 1.3285 and a low of 1.3249. Yesterday, the EUR traded 1.17% higher against the USD in the New York session, and closed at 1.3267, after the ECB left interest rates on hold at 0.75%, as anticipated by markets. The ECB President, Mario Draghi stated that a gradual economic recovery would begin this year, as structural reforms and actions by the ECB to tackle the region's debt crisis continued to take effect.
The pair is expected to find its first support at 1.3146 and first resistance at 1.3339.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6116 against the USD, 0.31% lower from the New York close, after manufacturing production in the UK fell unexpectedly in December, and industrial production rose less-than-expected in December. During the session, the pair traded at a high of 1.6180 and a low of 1.6107. Yesterday, the British Pound traded 0.73% higher versus the Dollar in the New York session, and closed at 1.6166, after the BoE kept its benchmark interest rate on hold at 0.5% and maintained the size of its asset purchase program at £375 billion, as expected by markets.
The pair is expected to find its first support at 1.6041 and first resistance at 1.6186.
USD JPY
The USD is trading at 88.92 against the JPY at 10:40 GMT this morning, 0.21% higher from the New York close. The Yen came under pressure, after the Japanese Prime Minister Shinzo Abe announced a new $224 billion stimulus program to boost the country's economy. Further, the Yen fell after trade deficit in Japan widened to ¥847.5 billion in November, from ¥450.3 billion in October. During the session, the pair traded at a high of 89.37 and a low of 88.72. In the New York session yesterday, the USD traded 0.52% higher against the JPY, and closed at 88.73.
The pair is expected to find its first support at 88.15 and first resistance at 89.53.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9168 against the Swiss Franc, 0.27% higher from the New York close. In economic news, consumer price index in Switzerland fell 0.2% (MoM) in December, compared to a 0.3% drop in the previous month. During the session, the pair traded at a high of 0.9180 and a low of 0.9128. In the New York session yesterday, the USD traded 0.88% lower against the CHF, and closed at 0.9143.
The pair is expected to find its first support at 0.9113 and first resistance at 0.9237.
USD CAD
At 10:40 GMT, the USD is trading at 0.9836 against the CAD, modestly higher from the New York close. Hogging in spotlight is the Canadian international merchandise trade balance data. Analysts expect trade deficit to widen in November. During the session, the pair traded at a high of 0.9845 and a low of 0.9822. Yesterday, the USD traded 0.23% lower against the CAD in the New York session, and closed at 0.9834.
The pair is expected to find its first support at 0.9814 and first resistance at 0.9866.
AUD USD
The AUD is trading at 1.056 against the USD, at 10:40 GMT this morning, 0.33% lower from the New York close. The consumer price index (CPI) in China rose 2.5% (YoY) in December, compared to a 2.0% rise in the previous month. During the session, the pair traded at a high of 1.0602 and a low of 1.0558. AUD traded 0.24% higher against the USD in the New York session, and closed at 1.0595.
The pair is expected to find its first support at 1.0545 and first resistance at 1.0589.
At 10:40 GMT, Gold is trading at $1669.07 per ounce, 0.35% lower from the New York close. This morning, Gold traded at a high of $1676.45 and a low of $1668.85 per ounce. In the New York session yesterday, the yellow metal traded 0.82% higher, and closed at $1674.95.
Gold has its first support at $1659.13 and first resistance at $1678.91.
Silver
Silver is trading at $30.65 per ounce, 0.69% lower from the New York close, at 10:40 GMT this morning, amid profit booking. This morning, Silver traded at a high of $30.93 and a low of $30.63 per ounce. Silver traded 1.40% higher against the USD in the New York session, and closed at $30.87.
Silver has its first support at $30.40 and first resistance at $30.93.
Crude Oil
At 10:40 GMT, Oil is trading at $93.26 per barrel, 0.70% lower from the New York close. Crude Oil traded higher earlier in the session, after Saudi Arabia cut its crude oil production by about 700,000 barrels per day over the last two months of 2012, bringing December output to around 9.0 million barrels per day. This morning, Oil traded at a high of $94.13 and a low of $93.24. Yesterday, Oil traded 0.18% lower in the New York session, and closed at $93.90.
It has its first support at $92.79 and first resistance at $94.18.
Economic Snapshot
UK industrial output rose in November
In the UK, industrial output rose 0.3% (MoM) in November, smaller than the expected 0.8% rise and reversing last month's 0.9% drop. On an annual basis, industrial production fell 2.4% in November, against the expectations of a 1.9% fall and following a 3.0% drop in October. Additionally, manufacturing output decreased unexpectedly by 0.3% in November, after easing 1.3% in the previous month. Market had expected the manufacturing to grow 0.5%. Annually, manufacturing output retreated 2.1% in November, compared to October's revised 2.0% decline. Economists had expected a 1.3% drop.
In France, current account deficit remained unchanged at €2.9 billion in November.
Swiss consumer prices eased in December
Switzerland's consumer prices eased 0.4% annually in December, compared to the same rate of fall recorded in November. Market had expected prices to ease 0.3%. On a monthly basis, consumer prices dropped 0.2% in December, following a 0.3% drop recorded in November.
Spanish industrial production declined in November
On a calendar adjusted annual basis, industrial production in Spain dropped 7.2% (YoY) in November, worse than the revised 3.1% drop recorded in October.
In Japan, Eco Watchers' current index rose to a reading of 45.8 in December, compared to a reading of 40.0 registered in the previous month. Market had expected the reading to climb to 40.8. Additionally, the outlook index rose to a reading of 51.0 in December, from a reading of 41.9 in the previous month. Market had expected a reading of 42.5.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities.
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