Forex Market Update
This morning, the greenback is trading higher against most of the major currencies.
In the Euro-zone, expectations of an interest rate cut by the European Central Bank (ECB) increased following downbeat economic data from Germany. In addition to yesterday's weaker-than-expected inflation data, monthly retail sales in the Germany dropped unexpectedly in March. Also, the number of people unemployed in Germany increased more-than-expected in April, while the Euro-zone unemployment rate increased in March.
The Bank of England (BoE) policy maker, David Miles stated that he expects the UK's inflation to slow down to 2% in at the end of the year, much below the central bank's forecast of 3% in February. On the other hand, macro economic activity in the UK remained mixed after data indicated that the mortgage approvals increased in March, while money supply growth continued to drop in the same month.
In Asia, the Japanese economy showed signs of improvement after overall household spending increased along with a drop in unemployment rate. Housing market in the nation also improved after housing starts growth accelerated in March. However, industrial production in Japan declined in March, along with a drop in retail sales.
In the economic news scheduled later today, Canadian economy is expected to remain stagnant in February. Additionally, the Chicago purchasing managers' index and the Conference Board's consumer confidence index in the US for April would be key.
The greenback traded mostly lower in the New York session yesterday, against the key currencies.
EUR USD
This morning at 09:40 GMT, the EUR is trading at 1.3074 against the USD, 0.15% lower from the New York close, as speculation of interest rate cut by the ECB continued to weigh on the currency. In economic news, German retail sales fell in line with market expectations in March, while consumer confidence increased more-than-expected in May. Additionally, unemployment rate in the nation remained unchanged at 6.9% in April. Meanwhile, annual consumer price inflation in the Euro-zone rose to 1.2% in April, following a 1.7% increase in March. Unemployment rate in the region increased as expected in March. During the session, the pair traded at a high of 1.3122 and a low of 1.3054. Yesterday, EUR traded marginally higher against the USD in the New York session, and closed at 1.3094.
The pair is expected to find its first support at 1.3045 and first resistance at 1.3113.
GBP USD
At 09:40 GMT, the GBP is trading at 1.5501 against the USD, 0.04% higher from the New York close. Mortgage approvals in the UK increased to 53.504K in March, from upwardly revised 51.947K approvals recorded in the previous month. Meanwhile, M4 money supply dropped 0.9% (MoM) in March, following a 0.5% decline recorded earlier. During the session, the pair traded at a high of 1.5509 and a low of 1.5468. Yesterday, GBP traded 0.15% lower against the USD in the New York session, and closed at 1.5495.
The pair is expected to find its first support at 1.5466 and first resistance at 1.5539.
USD JPY
The USD is trading at 97.53 against the JPY at 09:40 GMT this morning, 0.31% lower from the New York close. On the economic front, overall household spending in Japan advanced 5.2% in March, while the jobless rate fell to 4.1% in March. Industrial production in the country slowed in March, while manufacturing activity improved in April. Additionally, housing starts in the nation increased 7.3% (YoY) in March, while construction orders dropped (YoY) in March. During the session, the pair traded at a high of 98.14 and a low of 97.50. In the New York session yesterday, the USD traded marginally higher against the JPY, and closed at 97.83.
The pair is expected to find its first support at 97.27 and first resistance at 98.00.
USD CHF
This morning at 09:40 GMT, the USD is trading at 0.9365 against the Swiss Franc, 0.06% lower from the New York close. During the session, the pair traded at a high of 0.9385 and a low of 0.9352. In the New York session yesterday, the USD traded 0.11% lower against the CHF, and closed at 0.9371.
The pair is expected to find its first support at 0.9346 and first resistance at 0.9391.
USD CAD
At 09:40 GMT, the USD is trading at 1.0109 against the CAD, 0.09% lower from the New York close. Market participants await the release of gross domestic product from Canada later in the day. During the session, the pair traded at a high of 1.0125 and a low of 1.0103. Yesterday, the USD traded 0.25% lower against the CAD in the New York session, and closed at 1.0118.
The pair is expected to find its first support at 1.0090 and first resistance at 1.0141.
AUD USD
The AUD is trading at 1.0353 against the USD, at 09:40 GMT this morning, 0.07% higher from the New York close. On a monthly basis, private sector credit in Australia rose 0.2% in March, following the similar rate of growth recorded in the previous month. Market had expected a rise of 0.3%. During the session, the pair traded at a high of 1.0374 and a low of 1.0337. AUD traded 0.08% higher against the USD in the New York session yesterday, and closed at 1.0346.
The pair is expected to find its first support at 1.0330 and first resistance at 1.0375.
Gold
At 09:40 GMT, Gold is trading at $1473.02 per ounce, 0.14% lower from the New York close, ahead of the Federal Reserve policy meeting for cues on the direction of monetary policy. This morning, Gold traded at a high of $1480.20 and a low of $1461.29 per ounce. In the New York session yesterday, the yellow metal traded 0.35% higher, and closed at $1475.10.
Gold has its first support at $1462.81 and first resistance at $1481.72.
Silver
Silver is trading at $24.40 per ounce, 0.42% lower from the New York close, at 09:40 GMT this morning. This morning, Silver traded at a high of $24.55 and a low of $24.06 per ounce. Silver traded 1.16% higher against the USD in the New York session yesterday, and closed at $24.50.
Silver has its first support at $24.10 and first resistance at $24.66.
Crude Oil
At 09:40 GMT, Oil is trading at $94.55 per barrel, 0.10% higher from the New York close, ahead of the US Crude oil inventory data from the American Petroleum Institute (API) that is expected to show an increase in the stock piles last week. This morning, Oil traded at a high of $94.62 and a low of $94.19. Yesterday, Oil traded 1.12% higher against the USD in the New York session, and closed at $94.44.
It has its first support at $93.47 and first resistance at $95.16.
Economic Snapshot
UK mortgage approvals increased in March
In the UK, the number of mortgages approved for house purchases increased to 53,504 approvals in March, from a revised 51,947 approvals in February. Meanwhile, lending secured on dwellings increased £0.4 billion in March, compared to a £0.8 rise recorded in the previous month. Also, net consumer credit increased £0.5 billion in March, compared to a similar rise registered in February.
UK M4 money supply climbed in March
In the UK, the M4 money supply rose 0.3% annually in March, from a revised 0.6% rise in February. On a monthly basis, M3 money supply fell 0.9% in March, from a 0.5% drop recorded in the previous month.
Euro-zone's consumer price index rose in April
On an annual basis, the consumer price index in the Euro-zone rose 1.2% in April, compared to a 1.7% rise recorded in the previous month.
Euro-zone's unemployment rate rose in March
The unemployment rate in the Euro-zone surged to 12.1% in March, from a rate of 12.0% in February.
Germany's retail sales decreased in March
On a seasonally adjusted and working-day basis, retail sales in Germany fell 0.3% (MoM) in March, following a revised 0.6% drop recorded in February. Annually, retail sales slipped 2.8% in March, following a revised 2.6% fall recorded in the previous month.
Germany's consumer confidence index rose in May, indicates Gfk
In Germany, the GfK consumer confidence index advanced to a reading of 6.2 in May, from a revised reading of 6.0 in April. Market had expected the reading to remain unchanged from April's original reading of 5.9.
Germany's unemployment rate remained steady in March
In Germany, the unemployment rate remained steady at 6.9% in April, in line with market expectations. Meanwhile, the number of people unemployed increased by 4K in April, compared to a rise of 13K reported in March.
Consumer spending in France increased more-than-expected in March
On a monthly basis, consumer spending in France rose 1.3% (MoM) in March, against the expected 0.2% rise and following a 0.2% decline in February.
Spanish economy contracted at a slower pace in the Q12013
The gross domestic product in Spain slipped 0.5% (QoQ) in the Q12013, slower than a 0.8% drop recorded in the Q42012. On an annual basis, gross domestic product slipped 2.0% in the Q12013, following a 1.9% drop recorded in the previous quarter.
Japan's housing starts rose in March
In Japan, housing starts surged 7.3% annually in March, compared to a 3.0% rise recorded in February. Meanwhile, the number of annualized dwelling units decreased to 904,000 in March from 944,000 in the previous month. Moreover, construction orders received by 50 big constructors slipped 3.4% annually in March, reversing the 16.3% rise registered in February.
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