Pulse of the Market
· Greenback steady following NFPs and investors now look to Fed talks, rates, risk and EU Summit
· Euro climbed to a fresh four month high as financial concerns seen on the perspective
· British Pound loses its rate momentum to the Euro and may weaken after the BoE decision
· Australian Dollar fell short of risk trends and may prove vulnerable to disappointing data
The U.S Dollar ended the Friday’s trading session on a mixed note as it traded lower against the Single Currency, Yen and Franc whereas, higher against the Cable, Loonie and Aussie. Friday’s session has been an extremely choppy trading day in the foreign exchange market. On the economic docket, non-farm payrolls report, appeared to be a relatively healthy labor market that showed U.S companies added 192k jobs last month and the unemployment rate dipped to 8.9 percent, the lowest since April 2009. Everyone expected a strong number because of the weather related distortions that made job growth in January depressed. A revision was also anticipated for the previous report but the size of the revision was nominal considering that severe storms prevented more than 700k Americans from working that month. The improvement in the unemployment rate was encouraging and will make the Federal Reserve look good for finally bringing the jobless rate back below the psychologically 9 percent level. Euro was the only currency that ended the Friday’s trading session higher against the U.S Dollar. Single Currency was supported by ECB’s comments in the favor of Euro by telegraphing a rate hike next month. The European economic calendar is relatively light this week with only German factory orders, industrial production, current account and trade balance reports scheduled for release. Meanwhile it is worth mentioning that the EU bank stress banks have begun. The results will not be published until June but on March 18th, the names of the banks that will be tested will be released. Cable ended the session unchanged against the Greenback and slightly weaker against the Single Currency. The part of the move can be attributed to the larger than anticipated drop in house prices according to Halifax. British Pound was also pressured as investors are unsure about the outcome of this week’s Bank of England monetary policy meeting. Aside from the rate decision, the trade balance, industrial production and producer price reports are also scheduled for release this week. The Japanese Yen was lower against all of the major currencies except for the Swiss Franc which has been the single biggest beneficiary of risk aversion. No Japanese economic data was released yesterday but political troubles continue to plague the country. Prime Minister Kan rejected speculation that he would dissolve parliament to break the tie that has kept his Party from passing any new bills aimed at helping the economy.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
05:00 | JPY Coincident Index (JAN) | Low | 106.2 | 105.9 | 103.5 |
05:00 | JPY Leading Index (JAN) | Medium | 101.9 | 102.3 | 101.4 |
09:30 | EUR Euro-Zone Sentix Investor Confidence (MAR) | Medium | 17.2 | 16.7 | |
13:30 | CAD Building Permits (MoM) (JAN) | Low | 0.3% | 2.4% | |
20:00 | USD Consumer Credit (JAN) | Low | $3.300B | $6.099B | |
23:50 | JPY Trade Balance - BOP Basis (Yen) (JAN) | Medium | -¥371.8B | ¥768.8B |
Euro
The Single Currency tested 1.4000 before failing and consolidating just under the figure following some mixed action by Non Farm Payrolls. The market was buying the Euros on strengthening expectations that the European Central Bank will be raising rates earlier than the U.S. Overall the EUR/USD traded with a low of 1.3940 and a high of 1.4006 before closing the day around 1.3984 in the New York session.
Yen
The Japanese Yen was stronger across the board on Friday following risk off trading with crosses tracking the stock market lower. USD/JPY failed to hold initial gains after the U.S job numbers were released and was rejected sharply from the 83.00 Yen level. Overall the USD/JPY traded with a low of 82.20 and a high of 83.07 before closing the day around 82.30 in the New York session.
British Pound
The British Pound was range bounded violently between 1.6250 and 1.6300 five times throughout the Friday’s trading session as investors kept to the range. February House Prices fell -0.9% vs. -0.5% forecast. EUR/GBP stayed close the 0.8600 consolidating the recent rally. Overall the GBP/USD traded with a low of 1.6234 and a high of 1.6304 before closing the day at 1.6268 in the New York session.
Canadian Dollar
The Canadian Dollar ended the day unchanged against the U.S Dollar. Regardless of the rise in oil prices and the much better than expected IVEY PMI report, the Loonie failed to tack on additional gains. The IVEY PMI index surged from 41.4 to 69.3 in the month of February and normally such a large increase would be extremely positive for the currency. Overall the USD/CAD traded with a low of 0.9698 and a high of 0.9741 before closing the day at 0.9717 in the New York session.
Euro-Yen
EURJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The RSI is above 63 and lies above the neutral zone. Overall the cross has lost 0.03%.
Sterling-Yen
Currently GBPJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 54 reading and lies above the neutral zone. The pair has lost 0.20%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 52 reading and lies above the neutral region. The cross has lost 0.24%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 61 reading and lies above the neutral region. The pair has gained 0.16%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The RSI is above 42 and lies below the neutral region. The pair has lost 0.65%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.3881 | 1.3911 | 1.3947 | 1.3977 | 1.4013 | 1.4043 | 1.4079 |
USD/JPY | 81.11 | 81.65 | 81.98 | 82.52 | 82.85 | 83.39 | 83.72 |
GBP/USD | 1.6163 | 1.6199 | 1.6233 | 1.6269 | 1.6303 | 1.6339 | 1.6373 |
USD/CHF | 0.9105 | 0.9163 | 0.9211 | 0.9269 | 0.9317 | 0.9375 | 0.9423 |
USD/CAD | 0.9653 | 0.9676 | 0.9696 | 0.9719 | 0.9739 | 0.9762 | 0.9782 |
EUR/JPY | 113.49 | 114.17 | 114.64 | 115.32 | 115.79 | 116.47 | 116.94 |
GBP/JPY | 131.71 | 132.67 | 133.29 | 134.25 | 134.87 | 135.83 | 136.45 |
CHF/JPY | 87.26 | 87.76 | 88.32 | 88.82 | 89.38 | 89.88 | 90.44 |
AUD/JPY | 82.15 | 82.63 | 83.02 | 83.50 | 83.89 | 84.37 | 84.76 |
EUR/GBP | 0.8528 | 0.8546 | 0.8570 | 0.8588 | 0.8612 | 0.8630 | 0.8654 |
EUR/CHF | 1.2789 | 1.2852 | 1.2899 | 1.2962 | 1.3009 | 1.3072 | 1.3119 |
GBP/CHF | 1.4825 | 1.4923 | 1.4993 | 1.5091 | 1.5161 | 1.5259 | 1.5329 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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