Forex Market Update
This morning, the greenback is trading lower against most of the major currencies, amid lingering speculation that Federal Reserve would not unwind asset purchase program in near term, following weak gross domestic figures of the US released on Friday.
Over the weekend, Enrico Letta was chosen as new Italian Prime Minister, thus ending 18 months of a crippling political stalemate in the country. On this backdrop, borrowing costs in Italy fell to multi-year lows at an auction today. Yields on ten-year debt fell to 3.94%, the lowest since October 2010, and down from 4.66% at a similar auction last month. Also, five-year government bonds yields dropped to 2.84%, also the lowest since October 2010.
Meanwhile, economic data out this morning continues to show that the European economy remains weak and a recovery in the coming months continues to be unlikely. Industrial confidence, business climate and economic sentiment indicators showed contraction in April.
Separately, the Bank of England (BoE) policymaker, Ian McCafferty, stated that he was cautiously optimistic about the UK economic recovery although he added that recovery would continue to be difficult.
Ahead in the week, investors await the outcomes of policy meetings by the Federal Reserve and the ECB, as well as Friday's closely watched report on the US nonfarm payrolls. Also on the investor focus is the Bank of Japan's (BoJ) minutes of its most recent policy setting meeting, which would provide important insights into economic conditions in Japan.
The greenback traded lower in the New York session on Friday, against the key currencies.
EUR USD
This morning at 09:40 GMT, the EUR is trading at 1.3081 against the USD, 0.41% higher from the New York close, as concerns over the Italian political deadlock eased after Enrico Letta was selected as new Prime Minister of Italy. In the Euro-zone, business climate indicator declined to a reading of -0.93 in April from a reading of -0.75 in March. Additionally, economic sentiment indicator fell to a reading of 88.6 in April, followed by a drop in industrial confidence indicator in April. During the session, the pair traded at a high of 1.3100 and a low of 1.3031. On Friday, EUR traded marginally higher against the USD in the New York session, and closed at 1.3028.
The pair is expected to find its first support at 1.3014 and first resistance at 1.3124.
GBP USD
At 09:40 GMT, the GBP is trading at 1.5535 against the USD, 0.31% higher from the New York close. In the UK, economic reports showed that house prices have surged back to the levels seen at the height of the 2007, with Hometrack house prices showing 0.3% (MoM) rise in April. During the session, the pair traded at a high of 1.5547 and a low of 1.5479. On Friday, GBP traded slightly higher against the USD in the New York session, and closed at 1.5487.
The pair is expected to find its first support at 1.5455 and first resistance at 1.5581.
USD JPY
The USD is trading at 97.77 against the JPY at 09:40 GMT this morning, 0.45% lower from the New York close. With a series of Japan economic releases today, including unemployment and industrial production, trading in the pair is expected to be influenced by the resulting cues from these releases. During the session, the pair traded at a high of 97.98 and a low of 97.35. In the New York session on Friday, the USD traded 0.11% lower against the JPY, and closed at 98.21.
The pair is expected to find its first support at 97.14 and first resistance at 98.60.
USD CHF
This morning at 09:40 GMT, the USD is trading at 0.9395 against the Swiss Franc, 0.35% lower from the New York close. During the session, the pair traded at a high of 0.9433 and a low of 0.9390. In the New York session on Friday, the USD traded 0.14% higher against the CHF, and closed at 0.9428.
The pair is expected to find its first support at 0.9375 and first resistance at 0.9431.
USD CAD
At 09:40 GMT, the USD is trading at 1.0138 against the CAD, 0.31% lower from the New York close. During the session, the pair traded at a high of 1.0171 and a low of 1.0133. On Friday, the USD traded 0.34% lower against the CAD in the New York session, and closed at 1.0170, after data showed that the US economy grew at a slower-than-expected pace in the first quarter of this year.
The pair is expected to find its first support at 1.0109 and first resistance at 1.0192.
AUD USD
The AUD is trading at 1.0335 against the USD, at 09:40 GMT this morning, 0.52% higher from the New York close. During the session, the pair traded at a high of 1.0347 and a low of 1.0274. AUD traded tad higher against the USD in the New York session on Friday, and closed at 1.0282.
The pair is expected to find its first support at 1.0285 and first resistance at 1.0366.
Gold
At 09:40 GMT, Gold is trading at $1471.05 per ounce, 0.61% higher from the New York close, as the greenback weakened on speculation that Federal Reserve would keep its loose monetary policy in place. This morning, Gold traded at a high of $1477.10 and a low of $1462.48 per ounce. In the New York session on Friday, the yellow metal traded 0.57% lower, and closed at $1462.09.
Gold has its first support at $1451.72 and first resistance at $1486.91.
Silver
Silver is trading at $24.25 per ounce, 1.06% higher from the New York close, at 09:40 GMT this morning, tracking gains in the yellow metal. This morning, Silver traded at a high of $24.41 and a low of $23.97 per ounce. Silver traded 0.44% lower against the USD in the New York session on Friday, and closed at $24.00.
Silver has its first support at $23.75 and first resistance at $24.64.
Crude Oil
At 09:40 GMT, Oil is trading at $93.32 per barrel, 0.30% higher from the New York close. This morning, Oil traded at a high of $93.44 and a low of $92.43. On Friday, Oil traded 0.30% lower against the USD in the New York session, and closed at $93.00, as a slowdown in pace of the US economic recovery, weighed on demand prospects.
It has its first support at $92.39 and first resistance at $93.91.
Economic Snapshot
Euro-zone economic confidence declined in April
In the Euro-zone, economic confidence fell to a reading of 88.6 in April, from a revised reading of 90.1 recorded in the previous month. Industrial confidence declined to -13.8 in April from -12.3 in March. Meanwhile, the consumer confidence stood at -22.3 in April in line with the flash estimate. Also, business climate indicator fell to a reading of -0.93 in April, from an upwardly revised level of -0.75 recorded in the previous month. Additionally, the service confidence slipped to -11.1 in April from -7.0 in the previous month.
Spanish harmonized consumer price index climbed in April
In Spain, the harmonized index of consumer prices (HICP) rose 1.5% annually in April, slower than a 2.6% increase in March. Market had expected the index to rise 2.1%.
Spain's retail sales declined in March
On a calendar-adjusted annual basis, retail sales in Spain slipped 8.9% in March, faster than the revised 7.7% drop registered in February.
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