Key Forex Afternoon Notes:
- Australia export prices m/m 0% vs. -1%; import prices m/m 0.9% vs. 1.4%
- Spain retail sales y/y 6.5% vs. 2.5%
- German unemployment rate 6.5%
- Germany CPI m/m -1% vs. -0.8%; CPI y/y -0.3% vs. -0.1%
- US initial jobless claims 265k vs. 300k
Later:
- US pending home sales
- Japan unemployment rate
The hawkish FOMC statement yesterday saw some renewed strength into the Greenback, which quickly translated to weaker commodity currencies. The RBNZ’s neutral-dovish statement saw a sell off in the Kiwi dollar against the Greenback, while the Australian dollar was also weak into today’s trading session, both of which trading near all time lows. The Japanese Yen was the only currency which managed to hold on its gains since the start of this week. Albeit making an intraday high to 118 levels, USDJPY continues to look pressured to the downside.
The European trading session saw a mixed EURUSD, which didn’t push lower after yesterday’s FOMC statement. The EURUSD was seen trading near 1.1315 levels and is expected to maintain its gains to the upside in the next couple of sessions. The GBPUSD was seen drifting weaker, falling briefly to 1.51 levels. However, at the time of writing, the Cable also seemed quite stronger, despite yesterday’s FOMC statement which was mostly in favor of the Greenback.
There was not much of economic news from the European trading session, with the exception of German unemployment data and monthly CPI. While the unemployment rate was steady at 6.5%, German CPI both on monthly and annualized basis dipped lower at -1% and -0.3% respectively, further strengthening the case that deflation was a real threat to Europe, especially in the backdrop of continued Oil weakness.
The Euro however largely shrugged off the weaker CPI reading and continued to gain, especially against weaker currencies such as the NZD and the AUD.
Crude oil futures were seen trading lower, currently below $44.76, the previous low that was marked. A confirmed break below this level is likely to see Crude Oil futures dip further in the coming sessions.
Gold futures were also affected post FOMC yesterday with prices briefly dipping below $1270 only to stabilize later. The next support for Gold futures comes in at $1250 levels but the short term trend remains strongly poised to the upside.
The US trading session opened with the Weekly jobless claims which managed to beat estimates for the first time since the past few weeks. Initial jobless claims came out at 265k vs. expected 300k. However previous week’s jobless claims were further revised downward to 308k from 307k previously.
The Greenback was little changed on the news and there wasn’t much of reaction from other USD crosses. Up ahead, the pending home sales data is due for release followed by a speech from ECB’s Coeure, which could potentially risk the Euro’s strength since the start of this week.
EU foreign ministers will also be holding a meeting on Ukraine while it is not clear at this point if the EU will proceed with more sanctions against Russia. The US in recent days has made a statement that more sanctions will follow after renewed fighting in the rebel held areas of Ukraine.
