- US Dollar Falls Despite S&P 500 Decline – Chinese GDP Could Force Major Volatility
- Euro Rallies on Strong Portuguese Debt Auction, Shrugs off Concerns on Greek Debt Default
- British Jobless Claims Data Impresses – Are Bank of England Rate Hikes Coming?
- Canadian Dollar Stumbles as Bank of Canada Predicts “Modest” Recovery
- Australian Dollar Gains despite Rumors that RBA Will Avoid Rate Hikes
- New Zealand Dollar Drops against U.S. Counterpart Before Inflation Data
US Dollar Falls Despite S&P 500 Decline – Chinese GDP Could Force Major Volatility
The US Dollar fell notably against the euro for the second consecutive trading day as traders fed off of a strong Portuguese debt auction and shrugged off declines in the US S&P 500. The morning’s mixed Building Permits and Housing Starts data had little net effect on the US currency. Instead the Greenback continued its recent downward trend, and indeed we noted that forex options sentiment suggests many have begun to bet on and hedge against further US Dollar weakness. The sentiment shift likely explains part of the reason for which the safe-haven currency fell in tandem with financial market risk sentiment and suggests that many have simply covered their Euro/US Dollar shorts through recent trading.
Upcoming US Initial Jobless Claims, Existing Home Sales, and Chinese Q4 Gross Domestic Product data represents considerable event risk in the sessions ahead and could elicit reactions from the recently-downtrodden Greenback. Chinese GDP in particular could potentially swing ‘risk’ and threatens major volatility on substantive surprises. The world’s second-largest economy has defied a broader global slowdown and remains a major engine for broader expansion—particularly for regional economies and commodity-producing nations. Said fact means that Australian and New Zealand Dollar traders will pay particularly close attention to the result. The US Dollar stands to gain considerably on any important disappointments and subsequent deterioration in global risk sentiment.
Related: Discuss the Dollar in the DailyFX Forum, David R stands aside as there are risks USD may fall further
Euro Rallies on Strong Portuguese Debt Auction, Shrugs off Concerns on Greek Debt Default
The Euro hit fresh highs against the US Dollar on the heels of a strong Portuguese debt auction and shrugged off an official’s talk of a potential Greek debt default. A designated economic adviser to the German government said that officials should set aside funds because he does not believe “Greece will manage to deal with its debts without a cut, and then German guarantees will come due.”
It is certainly not the first time an official expresses concern over Greece’s fiscal solvency, but such candor and open admission that Germany may need to make good on its debt guarantees should have—at least in theory—prompted a stronger response. As it stands, it seems as though markets are growing increasingly complacent amidst relatively robust demand for Portuguese, Spanish, and Italian government debt auctions. The sharp improvement in sentiment bodes well for the Euro through near-term trading.
British Jobless Claims Data Impresses – Are Bank of England Rate Hikes Coming?
UK Jobless Claims data unexpectedly showed that unemployment dropped through December, sending the British Pound near fresh multi-month highs against the US Dollar. A gradual improvement in economic data and strong CPI inflation figures have intensified speculation that the Bank of England may look to normalize monetary policy through the foreseeable future. Though BoE hikes are far from definite, a relatively bullish employment result can only put further pressure on the Monetary Policy Committee to make moves. Friday’s Retail Sales numbers should provide further fundamental clarification on the future of inflation and higher yields.
Canadian Dollar Stumbles as Bank of Canada Predicts “Modest” Recovery
The Canadian dollar fell against its major currency counterparts following tempered growth forecasts by the Bank of Canada. The Loonie fell as the central bank issued a report which stated that the stronger Canadian dollar has led to a decline in export growth, thus hampering the economic recovery. As such, a “gradual” reduction of monetary stimulus through 2012 is likely, and any future rate increases would be “carefully considered,” according to Bank of Canada Governor Mark Carney. Investors should be looking for wholesale sales data for November and the leading indicators report for December scheduled to be released tomorrow for confirmation of the Bank of Canada’s dovish assessment.
Australian Dollar Gains despite Rumors that RBA Will Avoid Rate Hikes
The Australian Dollar rallied against its US namesake to take the title as strongest commodity-bloc performer on the trading session. A day after a report from Westpac showed that consumer confidence had shrunk by 5.7 percent in January, the Aussie showed resilience as metals were mostly up on the day. Earlier in the session, RBA Board Member Donald McGauchie ruled out the prospect of an interest rate hike at the coming policy meetings; recent flooding has had a substantial negative effect on the economy. Said disruption in mining activity due to flooding will likely cause a 0.2 percent negative weight on growth through March 2011, according to RBA forecasts.
New Zealand Dollar Drops against U.S. Counterpart Before Inflation Data
The Kiwi fell slightly against the US Dollar ahead of CPI data, andmarkets remained little moved after the data release. Q4 inflation narrowly missed expectations, hitting 2.3 percent versus 2.4 percent expected. Tomorrow’s calendar could provide some further event risk for the Kiwi, with business PMI and retail sales for November expected.
For Real Time Forex News, visit: http://www.dailyfx.com/real_time_news/
**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar
ECONOMIC DATA
Next 24 Hours
|
Currency |
GMT |
Release |
Survey |
Previous |
Comments |
|
AUD |
23:30 |
Consumer Inflation Expectation (JAN) |
2.8% |
At lowest level in four months. |
|
|
NZD |
2:00 |
ANZ Consumer Confidence Index (JAN) |
112.2 |
Confidence at a seventeen-month low. |
|
|
CNY |
2:00 |
Real Gross Domestic Product (YoY) (4Q) |
9.4% |
9.6% |
China’s 4Q growth rate probably slowed for a third consecutive quarter. |
|
CNY |
2:00 |
Gross Domestic Product (YTD) (YoY) (4Q) |
10.2% |
10.6% |
|
|
CNY |
2:00 |
Consumer Price Index (YoY) (DEC) |
4.6% |
5.1% |
Rising food prices in China are becoming major issue for policy makers. |
|
CNY |
2:00 |
Producer Price Index (YoY) (DEC) |
5.7% |
6.1% |
|
|
CNY |
2:00 |
Industrial Production (YoY) (DEC) |
13.4% |
13.3% |
Chinese industrial production increased over 13% YoY in each month of 2010. |
|
CNY |
2:00 |
Industrial Production (YTD) (YoY) (DEC) |
15.5% |
15.8% |
|
|
CNY |
2:00 |
Retail Sales (YoY) (DEC) |
18.7% |
18.7% |
Retail sales rose at least 18% annually in nine of the past ten months. |
|
CNY |
2:00 |
Retail Sales (YTD) (YoY) (DEC) |
18.4% |
18.4% |
|
|
CNY |
2:00 |
Fixed Assets Investments Urban (YTD) (YoY) (DEC) |
25.0% |
24.9% |
Likely rose to highest level in 6 months. |
|
JPY |
5:00 |
Leading Index (NOV F) |
101.0 |
Japan’s leading index rose in November to its highest reading in seven months. |
|
|
JPY |
5:00 |
Coincident Index (NOV F) |
102.1 |
||
|
JPY |
7:00 |
Convenience Store Sales (YoY) (DEC) |
1.1% |
Rose annually in 4 of the past 5 months. |
|
|
EUR |
7:00 |
German Producer Prices (MoM) (DEC) |
0.5% |
0.2% |
German producer prices increased in November for a third straight month. |
|
EUR |
7:00 |
German Producer Prices (YoY) (DEC) |
4.9% |
4.4% |
|
|
EUR |
9:00 |
Italian Industrial Orders s.a. (MoM) (NOV) |
1.4% |
0.0% |
Italian industrial orders rose 12.4% from the year prior as metals (excluding machinery) rose 27.7% and machinery increased 24.5%. |
|
EUR |
9:00 |
Italian Industrial Orders n.s.a. (YoY) (NOV) |
14.8% |
12.4% |
|
|
EUR |
9:00 |
Italian Industrial Sales s.a. (MoM) (NOV) |
1.0% |
||
|
EUR |
9:00 |
Italian Industrial Sales n.s.a. (YoY) (NOV) |
13.3% |
||
|
CHF |
10:00 |
ZEW Survey (Expectations) (JAN) |
-12.5 |
Negative reading the past four months. |
|
|
GBP |
11:00 |
CBI Business Optimism (JAN) |
3 |
2 |
Weakness in the British pound has boosted exports and improved business confidence. |
|
GBP |
11:00 |
CBI Trends Total Orders (JAN) |
-1 |
-3 |
|
|
13:30 |
Leading Indicators (MoM) (DEC) |
0.3% |
0.3% |
Increased in all but one month of 2010. |
|
|
CAD |
13:30 |
Wholesale Sales (MoM) (NOV) |
0.3% |
0.0% |
Unexpectedly stalled on a drop in machinery and equipment sales. |
|
USD |
13:30 |
Initial Jobless Claims (JAN 15) |
420K |
445K |
Jobless claims rose last week to the highest level since October. |
|
USD |
13:30 |
Continuing Claims (JAN 8) |
3985K |
3879K |
|
|
USD |
15:00 |
Existing Home Sales (DEC) |
4.87M |
4.68M |
Existing home sales rose less than forecast in November. |
|
USD |
15:00 |
Existing Home Sales (MoM) (DEC) |
4.1% |
5.6% |
|
|
USD |
15:00 |
Leading Indicators (DEC) |
0.6% |
1.1% |
November rise was largest in 8 months. |
|
USD |
15:00 |
Philadelphia Fed. (JAN) |
20.8 |
20.8 |
December reading was revised lower. |
|
EUR |
15:00 |
Euro-Zone Consumer Confidence (JAN A) |
-12 |
-11 |
Likely fell to a 6-month low in January. |
|
USD |
15:30 |
DOE U.S. Crude Oil Inventory (JAN 14) |
-500K |
-2154K |
U.S. crude oil refinery inputs averaged 14.7 million barrels per day during week ended January 7, 260K barrels per day below the previous week’s average. |
|
USD |
15:30 |
DOE U.S. Gasoline Inventory (JAN 14) |
2500K |
5081K |
|
|
USD |
15:30 |
DOE U.S. Distillate Inventory (JAN 14) |
1000K |
2652K |
|
|
USD |
21:00 |
RPX Composite 28 Day (YoY) (NOV) |
-2.29% |
RPX composite declined annually in October for a fourth straight month. |
|
|
USD |
21:00 |
RPX Composite 28 Day Index (NOV 30) |
189.29 |
||
|
NZD |
21:45 |
Retail Sales (MoM) (NOV) |
1.2% |
-2.5% |
Retail sales likely rose in November for a third time in four months. |
|
NZD |
21:45 |
Retail Sales Ex-Auto (MoM) (NOV) |
0.5% |
-1.6% |
|
|
Currency |
GMT |
Upcoming Events & Speeches |
|||
|
EUR |
9:00 |
European Central Bank Monthly Report |
|||
|
USD |
18:00 |
ECB’s Gertrude Tumpel-Gugerell Speaks on European Economy |
SUPPORT AND RESISTANCE LEVELS
CLASSIC SUPPORT AND RESISTANCE – 18:00 GMT
|
Currency |
EUR/USD |
GBP/USD |
USD/JPY |
USD/CHF |
USD/CAD |
AUD/USD |
NZD/USD |
EUR/JPY |
GBP/JPY |
|
Resist 2 |
1.3615 |
1.6420 |
89.00 |
1.0000 |
1.0922 |
1.0600 |
0.8230 |
127.60 |
146.05 |
|
Resist 1 |
1.3534 |
1.6034 |
86.00 |
0.9775 |
1.0750 |
1.0200 |
0.8000 |
120.00 |
140.00 |
|
Spot |
1.3466 |
1.5983 |
82.10 |
0.9553 |
0.9956 |
0.9974 |
0.7652 |
110.56 |
131.22 |
|
Support 1 |
1.2900 |
1.5312 |
80.00 |
0.9300 |
0.9800 |
0.9600 |
0.6850 |
103.80 |
125.00 |
|
Support 2 |
1.2585 |
1.5186 |
75.00 |
0.9000 |
0.9700 |
0.9375 |
0.6585 |
100.00 |
119.00 |
CLASSIC SUPPORT AND RESISTANCE –EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT
|
Currency |
USD/MXN |
USD/TRY |
USD/ZAR |
USD/HKD |
USD/SGD |
Currency |
USD/SEK |
USD/DKK |
USD/NOK |
|
Resist 2 |
13.8500 |
1.6755 |
7.2790 |
7.8165 |
1.4945 |
Resist 2 |
7.7500 |
5.7800 |
6.2750 |
|
Resist 1 |
12.5000 |
1.5931 |
7.1750 |
7.8075 |
1.4655 |
Resist 1 |
7.5800 |
5.6625 |
6.1150 |
|
Spot |
12.0875 |
1.5491 |
6.9937 |
7.7789 |
1.2825 |
Spot |
6.6260 |
5.5339 |
5.8232 |
|
Support 1 |
11.7200 |
1.4724 |
6.4000 |
7.7490 |
1.2750 |
Support 1 |
6.4500 |
5.2625 |
5.7030 |
|
Support 2 |
11.4400 |
1.3475 |
5.9200 |
7.7450 |
1.2500 |
Support 2 |
6.1250 |
5.1000 |
5.5200 |
INTRA-DAY PROBABILITY BANDS 18:00 GMT
|
Currency |
EUR/USD |
GBP/USD |
USD/JPY |
USD/CHF |
USD/CAD |
AUD/USD |
NZD/USD |
EUR/JPY |
GBP/JPY |
|
Resist. 3 |
1.3647 |
1.6153 |
83.03 |
0.9670 |
1.0060 |
1.0109 |
0.7758 |
112.04 |
132.88 |
|
Resist. 2 |
1.3602 |
1.6110 |
82.80 |
0.9641 |
1.0034 |
1.0075 |
0.7731 |
111.67 |
132.47 |
|
Resist. 1 |
1.3557 |
1.6068 |
82.57 |
0.9611 |
1.0008 |
1.0042 |
0.7705 |
111.30 |
132.05 |
|
Spot |
1.3466 |
1.5983 |
82.10 |
0.9553 |
0.9956 |
0.9974 |
0.7652 |
110.56 |
131.22 |
|
Support 1 |
1.3375 |
1.5898 |
81.63 |
0.9495 |
0.9904 |
0.9906 |
0.7599 |
109.82 |
130.39 |
|
Support 2 |
1.3330 |
1.5856 |
81.40 |
0.9465 |
0.9878 |
0.9873 |
0.7573 |
109.45 |
129.97 |
|
Support 3 |
1.3285 |
1.5813 |
81.17 |
0.9436 |
0.9852 |
0.9839 |
0.7546 |
109.08 |
129.56 |
v
Written by: David Rodríguez, Quantitative Strategist for DailyFX.com
To receive these reports via email or to submit Questions or Comments about an article; email jkicklighter@dailyfx.com
