Pulse of the Market
· Dollar fell earlier in Asian session reprieve on G7’s announcement of coordinated intervention
· Euro finds more buoyancy in steadied risk trends than a direct threat to push EUR/JPY higher
· British Pound comparatively quiet in the Asian session rally, suggesting weakness
· Japanese Yen plunged as the BoJ, Fed, ECB, BoE and BoC move to advance USD/JPY
The Greenback traded lower against all of the major currencies except for the Japanese Yen and Swiss Franc. The sell-off in the U.S Dollar can be attributed as the Greenback’s losing its safe haven status and improvement in risk appetite that has encouraged investors to put their money back to work in the financial markets. Better than expected U.S economic data lent further support to USD/JPY. The manufacturing sector continues to show signs of improvement and is an area that has brought much optimism for the U.S economy. Meanwhile the Philly Fed survey jumped to its highest level since 1984, a sign of continued recovery in the U.S economy. The sharp rise in the Philly Fed index can be largely attributed to the increase in new orders, inventories and average workweek. No major U.S economic reports are due for release today. The Single Currency had a busy trading session yesterday, hitting 4 month highs against the U.S and Australian Dollar. After a credit downgrade caused the currency to slip, the resilient Euro stood its ground. While the European Central Bank and the rest of the world monitors the Japanese situation carefully, the Bank is likely to continue forward with its plan to raise rates, as it tries to balance prospects for higher growth and controlling excessive inflation. Of all the major central banks, the ECB is expected to be the most aggressive. A number of German economic reports are due for release today including producer prices and current account, but investors will most likely be focused on Japan. The British Pound strengthened against all of the major currencies, hitting five month high against the Japanese Yen. On the economic calendar the Bank of England’s Quarterly Inflation Expectations report showed a fifth consecutive rise. Such news puts an added pressure on the BoE to raise interest rates in an effort to curb runaway inflation. The U.K Unemployment Rate saw an unexpected rise to 8.0 percent from previous month’s 7.9 percent. Japanese Yen extended its gains yesterday. The Bank of Japan did not intervene in their currency yesterday but their lack of intervention should not be misapprehended. Aussie pared some of its losses, after tumbling for the past three days against the Greenback. The Loonie gained strength due to a spike in crude oil prices and positive economic data.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
00:01 | GBP Nationwide Consumer Confidence (FEB) | Medium | 38 | 47 | 48 |
05:00 | JPY Coincident Index (JAN) | Low | 106.2 | ||
05:00 | JPY Leading Index (JAN) | Low | 101.9 | ||
07:00 | EUR German Producer Prices (YoY) (FEB) | High | 6.3% | 5.7% | |
09:30 | GBP Public Finances (PSNCR) (Pounds) (FEB) | Medium | -14.4B | ||
10:00 | EUR Euro-Zone Trade Balance (Euros) (JAN) | Low | -9.0B | -0.5B | |
11:00 | CAD Consumer Price Index (YoY) (FEB) | High | 2.3% | 2.3% |
Euro
The Single Currency paired much of its recent losses this morning, and remains well supported on either side of the key 1.40 figure. Investors are awaiting a regional summit, scheduled for late next week, at which European policymakers hope to hammer out the final extension of Euro Zone "bailout" fund to backstop the debt of countries like Portugal and Spain. Overall the EUR/USD traded with a low of 1.3868 and a high of 1.4052 before closing the day around 1.4019 in the New York session.
Yen
The Japanese Yen extended its gains yesterday to a fresh high well below the key 80 barrier. Soon after the U.S session ended, the Dollar Yen pair plummeted all the way to 76.36, a 4% drop in a matter of minutes. The pair soon reversed at the start of the Japanese trading day, but it still remains well supported below 80 as investors seek the Yen's safe haven status. Overall the USD/JPY traded with a low of 76.35 and a high of 79.73 before closing the day around 78.89 in the New York session.
British Pound
The British Pound was higher on broad Dollar weakness, but has been moving in the opposite direction against the Euro. Cable depreciated to its weakest levels in more than four months against the Single Currency as investors speculate that the BoE will be slower than the ECB to raise interest rates later this year. Overall the GBP/USD traded with a low of 1.5981 and a high of 1.6169 before closing the day at 1.6131 in the New York session.
Canadian Dollar
The Canadian Dollar gained strength due to a spike in crude oil prices and positive economic data. Easing concerns of a potential nuclear crisis in Japan and no new developments from the middle-east have led to a rally in risk currencies. Canadian Dollar also gained as data surprised to the upside, showing that foreigners bought a net $13.3 Billion of Canadian Securities in the month of January. Overall the USD/CAD traded with a low of 0.9832 and a high of 0.9950 before closing the day at 0.9852 in the New York session.
Euro-Yen
EURJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The RSI is above 58 and lies above the neutral zone. Overall the cross has lost 0.05%.
Sterling-Yen
Currently GBPJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 51 reading and lies above the neutral zone. The pair has lost 0.24%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 46 reading and lies below the neutral region. The cross has lost 1.28%.
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 65 reading and lies above the neutral region. The pair has gained 0.22%.
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 35 and lies below the neutral region. The pair has lost 0.38%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.3723 | 1.3796 | 1.3907 | 1.3980 | 1.4091 | 1.4164 | 1.4275 |
USD/JPY | 73.54 | 74.94 | 76.92 | 78.32 | 80.30 | 81.70 | 83.68 |
GBP/USD | 1.5830 | 1.5906 | 1.6018 | 1.6094 | 1.6206 | 1.6282 | 1.6394 |
USD/CHF | 0.8762 | 0.8844 | 0.8915 | 0.8997 | 0.9068 | 0.9150 | 0.9221 |
USD/CAD | 0.9688 | 0.9760 | 0.9806 | 0.9878 | 0.9924 | 0.9996 | 1.0042 |
EUR/JPY | 103.02 | 104.79 | 107.70 | 109.47 | 112.38 | 114.15 | 117.06 |
GBP/JPY | 118.33 | 120.41 | 123.85 | 125.93 | 129.37 | 131.45 | 134.89 |
CHF/JPY | 82.84 | 84.00 | 85.88 | 87.04 | 88.92 | 90.08 | 91.96 |
AUD/JPY | 71.73 | 73.18 | 75.24 | 76.69 | 78.75 | 80.20 | 82.26 |
EUR/GBP | 0.8604 | 0.8634 | 0.8662 | 0.8692 | 0.8720 | 0.8750 | 0.8778 |
EUR/CHF | 1.2225 | 1.2331 | 1.2464 | 1.2570 | 1.2703 | 1.2809 | 1.2942 |
GBP/CHF | 1.4069 | 1.4190 | 1.4343 | 1.4464 | 1.4617 | 1.4738 | 1.4891 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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