Forex Market Update
The greenback turned broadly lower against basket of currencies today morning. However, demand for the USD continued to be underpinned amid speculation over a possible near-term exit from the Federal Reserve’s asset purchase program after recent US data indicated that the economic outlook is improving. Yesterday, the US retail sales unexpectedly rose in April.
The headlines coming out of the Euro-zone instilled much of the action in the single currency, with the EUR recording gains against the USD and the GBP, after economic data showed that industrial production in the Euro-zone rose twice as much as expected in March offsetting dismal ZEW data on German and the Euro-zone economic sentiment.
Adding to the positive tone, Spain saw borrowing costs fall to the lowest level since 2010 to 1.105% at an auction of €3.03 billion 12-month government bonds. Also, Spain sold €1.01 billion of 6-month debt at an average yield of 0.5%, down from 0.530% at a similar auction last month.
In Japan, machine tool orders continued to decline, projecting a weak business conditions in the nation. However, tomorrow’s GDP data gets more prominence as markets assess the combined efforts of Prime Minister, Shinzo Abe and the Bank of Japan’s (BoJ) Governor, Haruhiko Kuroda in boosting up the ailing economy.
In its latest budget, Australian government unveiled that the nation would remain in deficit for the next two years, as higher Australian Dollar coupled with declining commodity prices have led to weaker profits and reduced budget revenues. It however indicated that the nation would rebound to a surplus by 2016-17.
EUR USD
This morning at
09:40 GMT, the EUR is trading at 1.3006 against the USD, 0.21% higher from the New York close, after the Euro-zone industrial production surged in March, easing concerns over the outlook for economic growth in the single currency bloc. However, the ZEW survey economic sentiment in the Euro-zone and Germany recorded less-than-expected reading in May. During the session, the pair traded at a high of 1.3030 and a low of 1.2976. Yesterday, EUR traded marginally lower against the USD in the New York session, and closed at 1.2979.
The pair is expected to find its first support at 1.2955 and first resistance at 1.3044.
GBP USD
At
09:40 GMT, the GBP is trading at 1.5302 against the USD, marginally higher from the New York close. The CB leading economic index in the UK rose 0.4% in April, similar to the rate of increase recorded in the previous month. During the session, the pair traded at a high of 1.5332 and a low of 1.5292. Yesterday, GBP traded 0.42% lower against the USD in the New York session, and closed at 1.5301.
The pair is expected to find its first support at 1.5257 and first resistance at 1.5366.
USD JPY
The USD is trading at 101.53 against the JPY at
09:40 GMT this morning, 0.25% lower from the New York close. Data released this morning indicated that machine tool orders in Japan declined 24.1% (YoY) in April, compared to a fall of 21.5% reported in the previous month. Apart from some other important macro releases during the week, much of the market attention is likely to be swayed by the GDP data due
on Thursday which is expected to show that the Japanese economy expanded at a faster pace for the first quarter of 2013. During the session, the pair traded at a high of 101.84 and a low of 101.26. In the New York session yesterday, the USD traded flat against the JPY, and closed at 101.79.
The pair is expected to find its first support at 101.17 and first resistance at 101.98.
USD CHF
This morning at
09:40 GMT, the USD is trading at 0.9541 against the Swiss Franc, 0.33% lower from the New York close. During the session, the pair traded at a high of 0.9576 and a low of 0.9520. In the New York session yesterday, the USD traded 0.12% higher against the CHF, and closed at 0.9573.
The pair is expected to find its first support at 0.9509 and first resistance at 0.9583.
USD CAD
At
09:40 GMT, the USD is trading at 1.0120 against the CAD, 0.14% higher from the New York close. During the session, the pair traded at a high of 1.0122 and a low of 1.0088. Yesterday, the USD traded 0.14% higher against the CAD in the New York session, and closed at 1.0106.
The pair is expected to find its first support at 1.0092 and first resistance at 1.0136.
AUD USD
The AUD is trading at 0.9944 against the USD, at
09:40 GMT this morning, 0.12% lower from the New York close. In its latest budget, Australian government stated that it expects Australian economy to grow 2.75% in fiscal 2014, down from 3% in the current year, while unemployment is likely to pick up to about 5.75% by the middle of next year from 5.5% now. It forecast that inflation would be contained at about 2.25%. During the session, the pair traded at a high of 1.0006 and a low of 0.9940. AUD traded 0.30% lower against the USD in the New York session yesterday, and closed at 0.9956.
The pair is expected to find its first support at 0.9920 and first resistance at 0.9987.
Gold
At
09:40 GMT, Gold is trading at $1431.17 per ounce, marginally higher from the New York close, amid weakness in the US Dollar. This morning, Gold traded at a high of $1445.57 and a low of $1430.53 per ounce. In the New York session yesterday, the yellow metal traded 0.26% lower, and closed at $1430.53.
Gold has its first support at $1423.48 and first resistance at $1442.22.
Silver
Silver is trading at $23.48 per ounce, 0.68% lower from the New York close, at
09:40 GMT this morning. This morning, Silver traded at a high of $23.82 and a low of $23.48 per ounce. Silver traded 0.44% lower against the USD in the New York session yesterday, and closed at $23.65.
Silver has its first support at $23.37 and first resistance at $23.72.
Crude Oil
At
09:40 GMT, Oil is trading at $94.98 per barrel, flat from the New York close. Later today, the American Petroleum Institute is slated to release its weekly report on crude oil inventory data followed by the US Energy Information Administration’s (EIA) report
tomorrow. This morning, Oil traded at a high of $95.66 and a low of $94.96. Yesterday, Oil traded 0.50% lower against the USD in the New York session, and closed at $94.98.
It has its first support at $94.39 and first resistance at $95.66.
Economic Snapshot
Leading economic index in the UK remained unchanged in March
The Conference Board leading economic index in the UK rose 0.4% in March, compared to a similar rise recorded in the previous month.
Euro-zone industrial production rose in March
In the Euro-zone, industrial production rose 1.0% (MoM) in March, above expectations for a 0.5% rise, and compared to a 0.3% rise recorded in the previous month. On an annual basis, industrial production declined 1.7% in March, compared to a 3.2% drop in the previous month
.
Euro-zone ZEW economic sentiment rose less than expected in May
According to the ZEW Survey, economic sentiment index in the Euro-zone rose to a reading of 27.6 in May, less than the market expectation of a reading of 39.0, and compared to reading of 24.9 in the previous month.
German ZEW economic sentiment improved less than expected in May
According to the ZEW Survey, economic sentiment index in Germany rose to a reading of 36.4 in May, less than the market expectation of 40.0, and compared to a reading of 36.3 in the previous month. Additionally, the current situation index declined to a level of 8.9 in May, compared to a reading of 9.2 in the previous month.
German CPI fell in line with preliminary estimate in April
In Germany, consumer price index (CPI) fell 0.5% (MoM) in April, in line with the previous estimate and compared to a 0.5% rise recorded in March. On an annual basis, CPI rose 1.2% in April, compared to a 1.4% rise recorded in the previous month. Similarly, the harmonised consumer price index (HICP) declined 0.5% (MoM) in April, compared to a rise of 0.4% recorded in March. On an annual basis, HICP rose 1.1% in April, compared to a 1.8% rise posted in the previous month.
German WPI declined in April
In Germany, wholesale price index (WPI) fell 0.4% (YoY) in April, compared to a 0.6% drop expected and compared to a 0.3% rise recorded in the previous month. On a monthly basis, WPI fell 0.2% in April, compared to a similar drop reported in March.
French current account deficit narrowed in March
In France, current account deficit narrowed to €2.9 billion in March, from a revised deficit of €5.0 billion registered in February.
Italian CPI rose in April
In Italy, the CPI rose 1.1% (YoY) in April, less than preliminary estimate of a 1.2% rise and compared to a 1.6% rise recorded in the previous month. On a monthly basis, CPI remained flat in April, compared to a 0.2% rise in the previous month.
Spanish CPI rose in April
In Spain, CPI rose 1.4% (YoY) in April, in line with the preliminary estimate and compared to a 2.4% rise recorded in the previous month. On a monthly basis, CPI rose 0.4% in April, compared to a similar rise recorded in the previous month. Similarly, the HICP climbed 0.1% in April, in line with the preliminary estimate and compared to a 1.9% rise in the previous month. On an annual basis, HICP rose 1.5% in April, compared to a 2.6% rise in the previous month.
Japan machine tool orders declined in April
In Japan, machine tool orders declined 24.10% (YoY) in April, compared to a 21.5% drop recorded in the previous month.
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