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Breaking news

ECB leaves all rates unchanged in line with expectations

FOREX: US Dollar to take Cues from Jobless Claims, Housing Data following FOMC

FOREX: US Dollar to take Cues from Jobless Claims, Housing Data following FOMC

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US Dollar to take Cues from Jobless Claims, Housing Data following FOMC

Minutes from the latest FOMC meeting in April showed consensus among central bankers with regards to letting the Fed’s massive balance sheet slowly dwindle as the first part of paring back the extraordinary measures implemented at the height of the crisis. Much of the minutes reflected Fed Chairman Ben Bernanke’s remarks at the post decision press conference, highlighting increased concerns among members with regards to the “upside risk to the inflation outlook,” and the downside risk to growth. The greenback was marginally higher at the close of North American trade, having pared overnight losses earlier in the session. Looking ahead the dollar may be losing some steam as commodities and overall risk appetite pick up. Traders will be eying weekly jobless claims and existing home sales data tomorrow after new home sales figures earlier in the week grossly missed estimates to the downside. It’s worth noting that the Dow Jones FXCM Dollar Index remains in the ascending channel that has held since late April, with support seen 9610 and 9550.

Related:Discuss the Dollar in the DailyFX Forum

Euro Risks to Downside Against Swiss Franc on Continued Greek Debt Troubles

The Euro finished roughly unchanged on another choppy day of trading, showing relatively little sensitivity on continued speculation over a Greek debt restructuring. European Central Bank officials once again stated that a Greek debt restructuring was effectively off the table, only available as a last resort in the most dire of circumstances. Of course, continued talk of “voluntary reprofiling” is a seemingly-innocuous euphemism for a Greek debt default, and 2-year government bonds continue to yield an almost-unbelievable 25 percent. The euro continues to underperform against the high-flying Swiss Franc as traders opt for the stability of the non-euro zone economy. Continued uncertainty favors EURCHF weakness, while the EURUSD will almost certainly take its cues from broader market sentiment as cross-asset correlations trade near record-highs.

British Pound Tumbles Against US Dollar as Bank of England Rate Prospects Sink

The sterling was the worst performer against the greenback at the close of New York trade after a slightly dovish BoE minutes release and a weaker than expected employment report saw rate -hike expectations diminish. The UK economy saw an uptick of 12.4k jobless claims in April, up from an upwardly revised previous print of 6.4K. And although the ILO unemployment rate fell to 7.7% from 7.8%, the claimant count rate increased by 0.1% to 4.6%. Coupled with last week’s stronger than expected inflation report and poor industrial and manufacturing production figures, the data continues to suggest sluggish growth in the Isle-nations as inflationary pressures persist. The sterling plummeted on the release, with the pound closing out the session lower by 0.55%, albeit well off session lows. Overnight traders will be eyeing April consumer confidence and retail sales data, with confidence expected to rise to 46, up from 44 a month earlier. Retail sales figures are also expected to improve with the month on month print seen rising to 0.8%, up from 0.2% m/m

Japanese Yen Could See Major moves on Gross Domestic Product Data

The Japanese Yen traded slightly lower on strong rallies in ‘risk’, but the true fireworks may wait for upcoming Gross Domestic Product figures due at 23:50 GMT. Analyst forecasts for Q1 Japanese GDP are unusually wide, ranging from a -4.3 to -0.4 percent annualized changes according to Bloomberg news. Natural disasters in March explain the wide range, and we suspect any especially large surprises could spark moves in the risk-sensitive currency. Said results could likewise shape expectations for the upcoming Bank of Japan monetary policy decision due Thursday night/Friday morning. Central bankers will almost certainly leave rates unchanged, but it will be important to watch whether the BoJ hints at expanding monetary policy accommodation amidst flagging growth.

Canadian Dollar Rallies as Crude Oil Inventories Report Sparks Oil Strength

The Canadian dollar advanced for the second consecutive day against the greenback on the back of stronger than expected April leading indicators and a rebound in commodities. The Loonie was 0.13% higher against the dollar as crude oil surged nearly 3% on its approach back to the $100 mark. Even risk for the USD/CAD pair mounts on Friday when the Bank of Canada releases April CPI figures and retail sales data. Notwithstanding sudden shocks to commodity prices, the pair should remain supported above the 50% Fibonacci retracement taken from the May 11th advance at 0.9650.

New Zealand Dollar Rallies as Agricultural Commodity Prices Jump

The New Zealand Dollar was the top-performing G10 currency on a strong day for financial markets, boosted by impressive gains in agricultural commodities and broader risk sentiment. An effectively empty economic calendar meant that the relatively high-yielding currency traded almost tick-for-tick with the S&P 500, and similarly limited event risk in days ahead point to similar moves.

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

GMT

Currency

Release

Survey

Previous

Comments

1:00

NZD

ANZ Consumer Confidence Index (MAY)

101.4

Dropping since post-recession high set January 2010

1:00

NZD

ANZ Consumer Confidence (MoM) (MAY)

0.0%

1:30

AUD

Average Weekly Wages (QoQ) (FEB)

1.2%

1.1%

February wages could show peaking in labor market recovery

1:30

AUD

Average Weekly Wages (YoY) (FEB)

3.8%

3.9%

4:30

JPY

Industrial Production (MoM) (MAR)

-15.3%

March data expected to fall sharply as Sendai earthquake damages production capabilities

4:30

JPY

Industrial Production (YoY) (MAR)

-12.9%

4:30

JPY

Capacity Utilization (MoM) (MAR)

2.9%

5:30

JPY

Nationwide Dept Store Sales (YoY) (APR)

-14.7%

Spending may increase as government reconstruction efforts in place

5:30

JPY

Tokyo Dept Store Sales (YoY) (APR)

-21.5%

8:30

GBP

Retail Sales ex Auto Fuel (MoM) (APR)

0.8%

0.2%

Higher retail sales may confirm demand-driven inflation; may prompt sooner BoE rate hike

8:30

GBP

Retail Sales inc Auto Fuel (MoM) (APR)

0.8%

0.2%

8:30

GBP

Retail Sales ex Auto Fuel (YoY) (APR)

2.2%

0.9%

8:30

GBP

Retail Sales inc Auto Fuel (YoY) (APR)

2.5%

1.3%

9:00

EUR

Italian Current Account (euros) (MAR)

-6337M

Has been in deficit since July 2010

9:00

CHF

ZEW Survey (Expectations) (MAY)

8.8

Upward trend since November 2010

10:00

GBP

CBI Trends Selling Prices (MAY)

36

Industrial trends expected to pick up despite government tightening

10:00

GBP

CBI Trends Total Orders (MAY)

-9

-11

12:30

USD

Initial Jobless Claims (MAY 14)

420K

434K

Lower unemployment may be leading indicator economy recovering

12:30

USD

Continuing Claims (MAY 7)

3725K

3756K

13:45

USD

Bloomberg Economic Expectations (MAY)

-16

Both higher than recession lows, but upward trend slightly dampened

13:45

USD

Bloomberg Consumer Comfort Idx (MAY 15)

-46.9

14:00

USD

Existing Home Sales (APR)

5.2M

5.1M

Slower home sales rate expected as home market concerns resurface

14:00

USD

Existing Home Sales (MoM) (APR)

2.0%

3.7%

14:00

USD

USD MBA Mortgage Foreclosures (1Q)

4.63%

Foreclosure rate may decline from previous as interest rates still low

14:00

USD

USD Mortgage Delinquencies (1Q)

8.22%

14:00

USD

Leading Indicators (APR)

0.1%

0.4%

Overall indicators lower, although manufacturing expected to pick up

14:00

USD

Philadelphia Fed. (MAY)

20

18.5

22:45

NZD

Net Migration s.a. (APR)

-530

May recover after record out-migration

GMT

Currency

Upcoming Events & Speeches

12:30

USD

Fed's William Dudley Speaks on U.S. Economy

13:00

EUR

ECB's Trichet, Tumpel-Gugerell on European Economy

14:30

CAD

Bank of Canada Review Release

14:45

CAD

BoC Governor Mark Carney Speaks on Bretton Woods

17:40

USD

Fed's Charles Evans Speaks on U.S. 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

1.5160

1.6750

89.00

0.9345

1.0275

1.1800

0.8400

116.80

146.05

Resist 1

1.5000

1.6600

86.00

0.8900

1.0000

1.1000

0.8215

116.90

140.00

Spot

1.4248

1.6167

81.68

0.8811

0.9698

1.0632

0.7894

116.38

132.05

Support 1

1.4000

1.6160

80.00

0.8600

0.9500

1.0400

0.7745

113.80

125.00

Support 2

1.3700

1.5750

75.00

0.8500

0.9055

1.0200

0.6850

105.50

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

1.6575

7.4025

7.8165

1.3650

Resist 2

7.5800

5.6625

6.1150

Resist 1

12.5000

1.6300

7.3500

7.8075

1.3250

Resist 1

6.5175

5.3100

5.7075

Spot

11.7176

1.5727

6.9062

7.7749

1.2403

Spot

6.2958

5.2343

5.5413

Support 1

11.5200

1.5040

6.5575

7.7490

1.2145

Support 1

6.0800

5.1050

5.3040

Support 2

11.4400

1.4725

6.4295

7.7450

1.2000

Support 2

5.8085

4.9115

4.9410

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

1.4435

1.6333

82.59

0.8920

0.9797

1.0781

0.8005

118.27

134.07

Resist. 2

1.4388

1.6291

82.37

0.8892

0.9772

1.0743

0.7978

117.80

133.56

Resist. 1

1.4342

1.6250

82.14

0.8865

0.9747

1.0706

0.7950

117.33

133.06

Spot

1.4248

1.6167

81.68

0.8811

0.9698

1.0632

0.7894

116.38

132.05

Support 1

1.4154

1.6084

81.22

0.8757

0.9649

1.0558

0.7838

115.43

131.04

Support 2

1.4108

1.6043

80.99

0.8730

0.9624

1.0521

0.7810

114.96

130.54

Support 3

1.4061

1.6001

80.77

0.8702

0.9599

1.0483

0.7783

114.49

130.04

v

Written by: David Rodriguez, Quantitative Strategist and Michael Boutros, Currency Analyst for DailyFX.com

To receive this report via email or to submit Questions or Comments about an article; email jkicklighter@dailyfx.com

The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

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