Pulse of the Market
· U.S durable goods fell 0.9 percent last month which was much weaker than expected
· Fitch lowered the Portugal’s sovereign debt rating and warned the possibility of further reductions
· U.K Consumer spending declined by 0.8 percent which was weaker than the market’s forecast
· Australia leading indicators grew by a modest 0.1 percent in the month of January
The Greenback ended yesterday’s trading session lower against all of the major currencies except for the Cable which was pressured by weaker than expected consumer spending data. The sell-off in the U.S Dollar can be partially attributed to softer economic reports but the most important reason why investors have been selling Dollar is because the rise in commodity prices which have increased the urgency within some central banks to raise interest rates. Fed Chairman Ben Bernanke announced that he will be holding press briefings four times a year to provide more transparency into Fed policy. The first briefing will be held on April 27th. The latest U.S economic data shows continued softness in the U.S economy. Durable goods fell 0.9 percent last month, which was much weaker than expected. Jobless claims remained below 400k for a second week, after rising slightly above this mark in early March. Weekly claims eased modestly from 387k to 382k, pushing the four week average down to its lowest level since July 2008. The third release of fourth quarter GDP and the final University of Michigan consumer confidence surveys will be released today. The Single Currency traded higher against the U.S Dollar. It seems like Portugal’s political troubles appeared to have little impact on the Euro. Not only has the Prime Minister resigned but Fitch lowered the country’s sovereign debt rating and warned of the possibility of further reductions. Portugal should be on the top of the agenda for the two day EU Leader’s Summit that began yesterday. EU leaders are also considering expanding the European Financial Stability Facility to €500 billion, but market watchers are worried that an agreement will not be reached until June. Sterling extended its losses against the Greenback after the retail sales report confirmed the central bank’s concerns about domestic demand. Consumer spending declined by 0.8 percent in the month of February which was weaker than the market’s dour forecast. Japanese Yen has been swinging in a tight range, trading at just below the 81 mark against the Greenback. Thanks to the support from the G7 world leaders, the Japanese currency has managed to stabilize against its partners.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| | EU Summit in Brussels | High | | | |
| 06:30 | EUR French Gross Domestic Product (QoQ) (4Q) | Low | | 0.3% | 0.3% |
| 07:00 | EUR German GfK Consumer Confidence Survey (APR) | Medium | | 5.8 | 6.0 |
| 09:00 | EUR German IFO - Business Climate (MAR) | Medium | | 110.5 | 111.2 |
| 09:00 | EUR Italian Retail Sales (YoY) (JAN) | Low | | 0.7% | 0.4% |
| 12:30 | USD Gross Domestic Product (Annualized) (4Q) | Medium | | 3.0% | 2.8% |
| 12:30 | USD Personal Consumption (4Q) | Medium | | 4.1% | 4.1% |
| 13:55 | USD U. of Michigan Confidence (MAR) | Medium | | 68.0 | 68.2 |
Euro
The Single Currency was volatile yesterday hitting day lows into European trading session on the rating downgrades of Portugal and Spanish banks before reversing higher on strong economic data and EU summit optimism. March Service Purchasing Manager Index jumped to 56.9 vs. 56.4 previously. Overall the EUR/USD traded with a low of 1.4052 and a high of 1.4219 before closing the day around 1.4175 in the New York session.
Yen
The Japanese Yen was enclosed against the U.S Dollar in yesterday’s trading session trapped by real money selling on the topside and Bank of Japan support on the downside. EUR/JPY and AUD/JPY surged towards recent month highs as the majors’ move to year highs. Overall the USD/JPY traded with a low of 80.75 and a high of 81.04 before closing the day around 80.96 in the New York session.
British Pound
The British Pound traded lower against the U.S Dollar in yesterday’s trading session. Cable was under a lot of pressure as the market react to weak economic data and sharp moves on crosses. EUR/GBP broke to multi month highs hitting 0.8800 and threatening to reverse a 2 year down trend. Overall the GBP/USD traded with a low of 1.6090 and a high of 1.6266 before closing the day at 1.6115 in the New York session.
Australian Dollar
The Australian Dollar reclaimed 1.0200 in yesterday’s trading session and is in striking distance of all time highs just above 1.0250. AUD/NZD found itself lower on the day in spite of the fact that technical resistance at 1.3700 inspired a pullback. Overall the AUD/USD traded with a low of 1.0112 and a high of 1.0227 before closing the day at 1.0211 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 55 and lies above the neutral zone. Overall the cross has gained 0.69%.
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 45 reading and lies below the neutral zone. The pair has lost 0.65%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is also indicating a bullish stance. The RSI is above 52 reading and lies above the neutral region. The cross has gained 0.84%.
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 68 reading and lies above the neutral region. The pair has gained 1.36%.
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 36 and lies below the neutral region. The pair has lost 0.73%.
Appendix
Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3911 | 1.3982 | 1.4078 | 1.4149 | 1.4245 | 1.4316 | 1.4412 |
| USD/JPY | 80.50 | 80.63 | 80.79 | 80.92 | 81.08 | 81.21 | 81.37 |
| GBP/USD | 1.5872 | 1.5981 | 1.6048 | 1.6157 | 1.6224 | 1.6333 | 1.6400 |
| USD/CHF | 0.8938 | 0.8983 | 0.9033 | 0.9078 | 0.9128 | 0.9173 | 0.9223 |
| USD/CAD | 0.9626 | 0.9677 | 0.9719 | 0.9770 | 0.9812 | 0.9863 | 0.9905 |
| EUR/JPY | 112.48 | 113.00 | 113.89 | 114.41 | 115.30 | 115.82 | 116.71 |
| GBP/JPY | 128.45 | 129.33 | 129.91 | 130.79 | 131.37 | 132.25 | 132.83 |
| CHF/JPY | 87.61 | 88.08 | 88.60 | 89.07 | 89.59 | 90.06 | 90.58 |
| AUD/JPY | 81.05 | 81.43 | 82.04 | 82.42 | 83.03 | 83.41 | 84.02 |
| EUR/GBP | 0.8557 | 0.8609 | 0.8702 | 0.8754 | 0.8847 | 0.8899 | 0.8992 |
| EUR/CHF | 1.2720 | 1.2753 | 1.2815 | 1.2848 | 1.2910 | 1.2943 | 1.3005 |
| GBP/CHF | 1.4343 | 1.4464 | 1.4552 | 1.4673 | 1.4761 | 1.4882 | 1.4970 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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