Forex Daily Summary for 16 April

Posted on
Switzerland

The Forex daily summary for 16 April features the following key notes:

  • Australia Employment change 37.7k vs. 15k; unemployment rate 6.1%;
  • Switzerland PPI m/m 0.2% vs. 0%; PPI y/y -3.4% vs. -3.7%
  • US building permits 1039k vs. 1081k
  • US housing starts 926k vs. 1040k
  • US Weekly unemployment claims 294k vs. 280k
  • Building permits m/m -5.7% vs. 3% previously
  • Housing starts m/m 2% vs. 15.9%

Later:

  • Philly Fed manufacturing index
  • Fed’s Lockhart speech
  • Fed’s Mester speech
  • Fed’s Rosengren speech
  • Fed’s Fischer speech

The Asian session was active for the currency markets today with the release of the Australia job numbers. Overall, the data was positive, beating estimates on all counts, which saw the Aussie stage an early rally against its peers. The Kiwi dollar was propelled higher, on a broader Greenback weakness and both the currencies managed to keep up their bullish momentum into the US trading session.

The Japanese Yen was trading mixed, albeit stronger against the US Dollar but relatively weaker against the Aussie, British Pound and the Euro.

There wasn’t much of economic data from Europe but the single currency, Euro managed to continue its rally against the US Dollar, flirting with the highs of 1.07 levels. The inaction from the ECB yesterday and a very neutral tone of Draghi during the press conference help breathe some life into the Euro.

At the time of writing, the Euro, which earlier fell to the Aussie’s strength managed to recover some of the losses.

The British Pound was also trading stronger against the Greenback as the Cable attempted to test the highs above 1.49 before turning choppy. Support lies at 1.485 and a failure to break higher could see this being tested intraday.

Gold futures also managed to reverse losses from this week but were seen to be trading near the 1200 level with no directional bias. It could be that the markets are looking to tomorrow’s CPI data from the US for further direction.

The Greenback continued to remain subdued after it broke down below the 99.95 level. The Dollar index, at the time of writing was back at the support zone near 98.12 and 97.75. This support level could prove to be critical as a break down below this level could be seen as very bearish for the Greenback, while to the upside, a recovery above the previous low at 99.95 is required to see the momentum build up.

The US trading session saw some data in the likes of weekly unemployment claims rise more than expected to 294k against expectations of 280k. Housing starts and building permits data, both came out weaker which saw the Greenback drop lower. Further economic data is due later today with the Philly Fed manufacturing Index which could continue to keep the volatility alive in the USD crosses.

There are also scheduled speeches by various Fed members, which could see the Greenback react to overly dovish comments.

Overall, the markets are ripe for the US CPI data release tomorrow, along with the Eurozone and Canada due to release the inflation numbers.

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