Forex Market Update
This morning, the greenback is trading higher against most of the major currencies, extending Friday’s gains, after the news that the Federal Reserve officials has reportedly sketched out plans to wrap up its $85 billion bond-buying program per month. The greenback’s immediate fortunes will be determined by the outcome of a closely watched retail sales and business inventories data in the US.
On a market worthy note, the officials of G7 nations, over the weekend, re-affirmed their commitment to not lower their exchange rates for the sake of achieving economic growth. Moreover, the finance chiefs gave a green signal to the recent Yen’s decline and stated that they intensified their focus on Japan’s recovery strategy.
The Euro is trading in negative territory, after the European Central Bank (ECB) policy maker and Governor of Bank of Italy, Ignazio Visco stated that the central bank could go for negative interest rates if the Euro-zone economy needed further support.
In the day ahead, markets eye the Euro-group meeting where officials would discuss on bank bailouts and the banking union regulations. They are expected to sign off on the latest tranche of aid for Greece and agree on the first €3 billion ($3.9 billion) of its bailout package.
Meanwhile, Italy in its three-year bond auction witnessed yields falling to 1.92% from 2.29% recorded in the previous month.
Elsewhere, Chinese industrial production disappointed markets after rising less-than-expected in the month of April. Meanwhile, retail sales in the nation rose in line with market expectations in the same month.
EUR USD
This morning at
09:40 GMT, the EUR is trading at 1.2969 against the USD, 0.11% lower from the New York close, on the ECB policy maker, Ignazio Visco’s comments that the central bank is “technically” ready for negative interest rates. With not much on economic front in the Euro-zone, the pair is expected to trade on the trends of the greenback. During the session, the pair traded at a high of 1.2993 and a low of 1.2951.
On Friday, EUR traded 0.25% lower against the USD in the New York session, and closed at 1.2983.
The pair is expected to find its first support at 1.2929 and first resistance at 1.3014.
GBP USD
At
09:40 GMT, the GBP is trading at 1.5356 against the USD, marginally higher from the New York close. In its latest report, the Confederation of British Industry (CBI) stated that Britain's “flat” economy is finally moving towards growth, with GDP expected to expand by 1% in 2013, followed by 2% growth next year. On the economic front, RICS house price balance data in the UK is awaited in the day ahead and is expected to shed some light on the nation’s housing recovery. During the session, the pair traded at a high of 1.5382 and a low of 1.5338.
On Friday, GBP traded 0.40% lower against the USD in the New York session, and closed at 1.5354.
The pair is expected to find its first support at 1.5308 and first resistance at 1.5411.
USD JPY
The USD is trading at 101.66 against the JPY at
09:40 GMT this morning, 0.12% higher from the New York close. In economic news, the Bank of Japan reported that the nation’s M2 money supply rose 3.3% last month to ¥844.5 trillion, against expectation for an increase of 3.1%. Also, M3 money stock rose 2.6% to ¥1,142.0 trillion, topping market expectations for 2.5% increase. During the session, the pair traded at a high of 101.99 and a low of 101.52. In the New York session
on Friday, the USD traded 0.13% higher against the JPY, and closed at 101.54.
The pair is expected to find its first support at 101.15 and first resistance at 102.17.
USD CHF
This morning at
09:40 GMT, the USD is trading at 0.9582 against the Swiss Franc, 0.13% higher from the New York close. On the economic front, real retail sales in Switzerland dropped 0.9% (YoY) in March, following a revised 2.3% increase recorded in the previous month. Market had expected a rise of 0.8%. During the session, the pair traded at a high of 0.9597 and a low of 0.9549. In the New York session
on Friday, the USD traded 0.18% higher against the CHF, and closed at 0.9570.
The pair is expected to find its first support at 0.9538 and first resistance at 0.9628.
USD CAD
At
09:40 GMT, the USD is trading at 1.0122 against the CAD, 0.08% higher from the New York close. During the session, the pair traded at a high of 1.0135 and a low of 1.0105.
On Friday, the USD traded 0.09% higher against the CAD in the New York session, and closed at 1.0114.
The pair is expected to find its first support at 1.0072 and first resistance at 1.0163.
AUD USD
The AUD is trading at 0.9957 against the USD, at
09:40 GMT this morning, 0.52% lower from the New York close. In Australia, home loans rose 5.2% in March, following a revised 2.1% growth recorded in the previous month. Meanwhile, the National Bank of Australia reported that its business confidence index dropped to a reading of -2.0 in April, from a reading of 2.0 recorded in the previous month. However, the business conditions index improved to a reading of -6.0 in April, from a reading of -7.0 recorded in March. During the session, the pair traded at a high of 1.0013 and a low of 0.9955. AUD traded marginally lower against the USD in the New York session
on Friday, and closed at 1.0009.
The pair is expected to find its first support at 0.9922 and first resistance at 1.0024.
Gold
At
09:40 GMT, Gold is trading at $1429.68 per ounce, 1.27% lower from the New York close, as the greenback strengthened following news that the Fed is planning to windup its $85 billion per month bond buying program. This morning, Gold traded at a high of $1439.94 and a low of $1426.16 per ounce. In the New York session
on Friday, the yellow metal traded 0.84% higher, and closed at $1448.00.
Gold has its first support at $1416.03 and first resistance at $1447.01.
Silver
Silver is trading at $23.64 per ounce, 1.00% lower from the New York close, at
09:40 GMT this morning, tracking losses in the yellow metal. This morning, Silver traded at a high of $23.84 and a low of $23.51 per ounce. Silver traded 1.99% higher against the USD in the New York session
on Friday, and closed at $23.88.
Silver has its first support at $23.26 and first resistance at $23.96.
Crude Oil
At
09:40 GMT, Oil is trading at $94.98 per barrel, 0.70% lower from the New York close, after data indicated that industrial production in China rose at a slower pace in April. This morning, Oil traded at a high of $95.66 and a low of $94.90.
On Friday, Oil traded 1.00% higher against the USD in the New York session, and closed at $95.64.
It has its first support at $93.49 and first resistance at $96.35.
Economic Snapshot
French business sentiment rose in April
The Bank of France has reported that its business sentiment index for industrial sector climbed to a level of 94.0 in April, from a level of 93.0 reported in March. Market had expected the index to drop to a level of 92.0.
Retail sales in Switzerland dropped in March
In Switzerland, retail sales declined 0.9% (YoY) in March, against the market expectation of a rise of 0.8% and compared to a downwardly revised rise of 2.3% reported in the previous month.
Home loans in Australia rose in March
On a seasonally adjusted monthly basis, home loans in Australia rose 5.2% in March, compared to a revised 2.1% rise recorded in the previous month.
Australia’s business sentiment declined in April, indicates NAB
The National Australia Bank (NAB) has reported that its business confidence index in Australia declined to a reading of -2.0 in April, compared to a reading of 2.0 in March. On the other hand, business conditions index improved to a reading of -6.0 in April from a reading of -7.0 reported in March.
Retail sales in China rose in April
In China, retail sales rose 12.8% (YoY) in April, in line with market expectations, and compared to a 12.6% rise reported in the previous month.
Industrial production in China climbed less than expected in April
In China, industrial production rose 9.3% (YoY) in April, compared to an 8.9% rise posted in the previous month. Market had expected industrial production to rise 9.5%.
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