Forex: Daily wrap up

on May 29, 2013


It has been a positive day for the euro, recovering previous losses against the greenback and hitting highs at 1.2976. The single currency was supported by strong German consumer confidence data, updated in the early afternoon European trade.
US mortgage applications data proved disappointing, showing an 8.8 percent decrease and slowing the bulls for the USD. Yesterday’s positive US consumer confidence data couldn’t maintain the pair at previous 1.28 levels and in early American trading today it’s changing hands at 1.2942.

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Thursday will bring further US data likely to be influential for further development of the pair. The GDP and jobless claims updates are due at 13:30 BST, followed by Pending Home Sales at 15:00 BST.
The day has been passing in USD/JPY bullishness with a decline from the overnight 102.00 levels to trade in the 101.76/78 zone. The yen has recovered following Nikkei volatility this week, trading at 101.06 in the late European afternoon.

Since the BOJ’s QE programme seems to have been undermined by monetary measures which so far have failed to produce market confidence. The BOJ has launched an aggressive quantitative easing programme as it seeks to double the monetary base within two years, involving large purchases of government bonds, but deflation persists.
The Bank of Japan will tomorrow release its bond purchasing operation plan for June is likely to increase the frequency of operations but with smaller amounts.

The next Asian session will start with news of foreign bond and stock investment on the Japanese market.
The GBP/USD was trading above the 1.51 level today, but after the release of US mortgage applications data sterling rose from an 11-week low versus the dollar and the pair hit lows at 1.5090, though not returning to overnight 1.5070 lows.

The advance against a weaker dollar was supported by the 200-hour SMA at the beginning of the NY session.
The pair is likely to follow the signals of US upcoming data tomorrow, with no significant UK releases.
The Aussie was trading at 0.9528, its lowest level since October 2011 following weak Australian data released at the beginning of the Sydney session.
The Westpac Leading index tracking economic activity showed only a 0.2 percent growth in March against 0.6 percent the prior month. The April New Home Sales index was down 3.9 percent from 4.2 in March and Construction Work Done declined two percent in the first quarter of 2013, missing expectations of a one percent rise after a 0.1percent increase in the previous quarter.
So far today, the weakened US dollar has brought fresh stamina for its Australian counterpart, with the pair hitting 1.9670 before retracing to 0.9616/18.
The pair dropped on the German CPI release, first to 0.9628 before diving deeper to the 0.96 barrier.
At the beginning of the American session and release of the US mortgage applications update, the USD/CHF recovered to the 0.9656/58 level before settling at 0.9615/18 in later US trade.
The German Consumer Price Index YoY came in at 1.5 percent for May, close to expectations of a 1.3 percent rise. The Consumer Price Index MoM climbed by 0.5 percent in May, versus estimates of 0.2 percent. The Harmonised Index of Consumer Prices rose 0.3 percent MoM and 1.7 percent over the last twelve months.
Earlier today the UBS Consumption Indicator for April was released, showing an improvement of 1.46 points against the 1.24 in the prior month.
Due tomorrow at 06:45 BST is the Swiss GDP Q1 data update.
In late Asian trading the pair broke the 1.04 level to hit highs at 1.0420, before retreating to 1.0389/92 in early European trading.
The Bank of Canada today decided to keep the base interest rate at one percent and its inflation target at two percent.
The USD/CAD rose slightly to around 1.0370 right after the Canadian data was released but then fell to fresh daily lows in the 1.0350 area.
Federal Reserve Bank of Boston President Rosengren is due to speak at 18:00 BST. Ahead of the speech the pair is trading at 1.0378, close to the 1.04 levels.


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