Daily news from Cozfx

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COZfx: AUD/USD trading lower after Fed minutes

COZforex: The Australian dollar was lower against its US counterpart on Thursday, as the Federal Reserve's most recent policy meeting minutes lent broad support to the greenback.

AUD/USD hit 0.8567 amid late Asian trade, the pair's lowest since November 7; the pair subsequently consolidated at 0.8578, retreating 0.45%. In technical analysis, COZforex senior currency strategist Ian • Quigley said, AUD/USD is predicted to find support at 0.8562, and a drop through could take it to the next support line of 0.8527. Meanwhile, the pair is predicted to find its first resistance at 0.8657, and a rise through could take it to the next resistance line of 0.8717.

The greenback was boosted after the minutes of the Fed's October meeting indicated that officials believe the economic recovery is strong enough to withstand external threats to growth, but offered little additional clarity about when rates could start to rise.

Separately, data earlier showed that China’s HSBC manufacturing purchasing managers' index fell to a six-month low of 50.0 this month from a final reading of 50.4 in October and well below the 50.3 forecast by analysts.

Later in the day, the US was to release data on initial jobless claims, consumer prices, existing homes sales and manufacturing activity in the Philadelphia region.

(COZ forex UK)

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COZfx: NZD/USD drops on New Zealand inflation expectations

COZforex: The New Zealand declined against its US counterpart on Tuesday, as data showed that New Zealand's inflation expectations ticked lower in the last quarter, while demand for the greenback remained broadly supported.

NZD/USD hit 0.7808 amid late Asian trade, the pair's lowest since November 20; the pair subsequently consolidated at 0.7809, declining 0.66%. In technical analysis, NZD/USD was likely to find support at 0.7710, the low of November 11 and resistance at 0.7951, the high of November 21.

In a report, the Reserve Bank of New Zealand said inflation expectations ticked down to 2.1% in the third quarter, from 2.2% in the 3 months to June.

Meanwhile, the greenback continued to be underpinned after the minutes of the Federal Reserve's October meeting indicated last week that officials believe the economic recovery is strong enough to withstand external threats to growth, but offered little additional clarity about when rates could start to rise.

The Fed wound up its asset purchasing stimulus program last month and is expected to start raising rates around September 2015.

Later in the day, the US was to release revised data on third quarter gross domestic product and a report on consumer confidence.

(COZ forex UK)

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COZfx: EUR/GBP decline after EZ, UK PMI reports

COZforex: The euro declined against the pound on Monday, as disappointing manufacturing data from the euro zone, while a positive report from the UK lent support to sterling.

EUR/GBP hit 0.7924 amid late Asian trade, the session low; the pair subsequently consolidated at 0.7926, declining 0.42%. In technical analysis, COZforex senior currency strategist Ian • Quigley said, EUR/GBP was likely to find support at 0.7910, the low of November 28 and resistance at 0.7977, the session high.

Sentiment on the euro was vulnerable after data on Monday showed that the euro zone’s manufacturing purchasing managers’ index slowed to 50.1 from a preliminary reading of 50.4 last month, just barely above the 50 level separating growths from contraction.

Germany’s manufacturing PMI entered contraction territory for the first time in 17 months, falling to 49.5, as new orders fell at the fastest rate in nearly 2 years.

The weak data added to pressure on the European Central Bank to step up measures to spur growth and stave off the threat of deflation ahead of its upcoming policy meeting on Thursday.

Meanwhile, in the UK, data showed that the manufacturing PMI rise to a 4 month high of 53.5 last month from a reading of 53.2 in October.

Analysts had expected the index to inch down to 53.1 in November.

A separate report showed that UK net lending to individuals rise by £2.6 billion in October, less than the expected £2.8 billion increase, after a £2.7 billion rise in September.

Later in the day, the US Institute of Supply Management was to release data on manufacturing activity.

(COZ forex UK)

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COZfx: GBP/USD dips as BoE holds on rates

COZforex: The pound held steady against the dollar on Thursday after the Bank of England made no changes to UK interest rates; while a solid report on US initial jobless claims gave the dollar support.

In US trading on Thursday, GBP/USD was up 0.15% at 1.5711, up from a session low of 1.5643 and off a high of 1.5715. In technical analysis, COZforex senior currency strategist Ian • Quigley said, GBP/USD is predicted to find support at 1.5628, and a drop through could take it to the next support line of 1.5573. Meanwhile, the pair is predicted to find its first resistance at 1.5729, and a rise through could take it to the next resistance line of 1.5775.

The Bank of England's monetary policy committee earlier left UK interest rates on hold at their current record low of 0.5% and maintained the size of its asset purchase program at £375 billion.

The minutes of the BoE’s November policy meeting showed that two policymakers voted in favor of 0.25% hike in the benchmark rate for the fourth consecutive meeting, and Thursday's decision to keep policy on hold softened the pound slightly, though the currency moved back into positive territory after investors digested the decision and determine it was less dovish and than initially thought.

Meanwhile in the US, the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Nov. 29 decreased by 17,000 to 297,000 from the previous week’s revised total of 314,000, in line with expectations.

On Friday, the US is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings, as well as a report on factory orders.

(COZ forex UK)

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COZfx: USD/JPY pushes lower, tumbles over 1%

COZforex: The US dollar pushed lower against the yen on Tuesday, tumbling over 1% as falling oil prices continued to boost investor demand for the safe-haven yen.

USD/JPY hit 119.06 amid US morning trade, the pair's lowest since December 2; the pair subsequently consolidated at 118.47, down 1.85%. In technical analysis, USD/JPY is predicted to find support at 119.83, and a drop through could take it to the next support line of 119.31. Meanwhile, the pair is predicted to find its first resistance at 121.24, and a rise through could take it to the next resistance line of 122.14.

Oil prices declined to 5 year lows Tuesday amid expectations that a growing supply glut would continue to weigh on prices into the new year. Meanwhile, the dollar remained supported by the diverging monetary policy stance between the Federal Reserve and central banks in Japan and Europe.

Last week’s strong US jobs report for November prompted investors to bring forward expectations for the first hike in interest rates to mid-2015 from September 2015 ahead of the report.

Earlier Tuesday, the Wall Street Journal reported that Fed officials are looking at dropping an assurance that interest rates will stay low for a "considerable time", in its statement, following its upcoming policy meeting next week.

(COZ forex UK)

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COZfx: USD/CAD weekly outlook during Dec15 to 19

COZforex: The US dollar rise to more than 5 year highs against the commodity exposed Canadian dollar on Friday amid the ongoing decline in oil prices and after a strong report on U.S. consumer sentiment.

USD/CAD hit highs of 1.1590, the most since July 2009, before easing back to 1.1578 in late trade.

Oil prices hit lows not seen since 2009 on Friday, with Brent below $62 per barrel and US crude down to $57 a barrel after the International Energy Agency cut its forecast for global oil demand for the fifth time in 6 months. Canada is a major oil exporter and the currency's sensitivity to crude prices has intensified as prices have tumbled.

The greenback received an additional boost after data showing US consumer sentiment rise to an almost 8 year high in December.

The preliminary reading of the University of Michigan's consumer sentiment index rise to 93.8, the highest level since January 2007 and ahead of forecasts of 89.7. Consumer sentiment was boosted by the improving outlook for employment and wage growth and lower gasoline prices.

The US dollar index, which measures the greenback against a basket of six major currencies, recovered from session lows of 88.12 following the report to settle at 88.34, still off 0.26% for the day. On Monday the index rose to a five year high of 89.53.

(COZ forex UK)

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COZfx: Euro trading lower before the Euro-zone’s CPI data

COZforex: For the past trading session, the EUR rise 0.53% against the USD and closed at 1.2510, following upbeat economic data from the Euro-zone and Germany.

Yesterday, data indicated that Germany’s ZEW economic sentiment index improved for the second-consecutive month to 34.9 in December, beating market expectations of a rise to a level of 20.0. In the prior month, the index had recorded a reading of 11.5. In addition, the nation’s current situation index registered a rise to 10.0, compared to market expectations of an advance to 5.0, thus easing concerns over the economic outlook for the Euro-zone’s biggest economy. Meanwhile, the Euro-zone’s ZEW economic sentiment index climbed to a level of 31.8, from previous month’s mark of 11.0.

The Euro was further boosted, after manufacturing PMI in Germany advanced more than anticipated to 51.2 in December, against market expectations of a rise to a level of 50.3. The index had registered a level of 49.5 in the prior month. Also, the manufacturing PMI in the Euro-zone increased to 50.8 in December, higher than market expectations of a rise to a level of 50.5, while the region’s services PMI edged up to 51.9 in December and compared to prior month’s reading of 51.5.

The greenback lost ground after the US Markit manufacturing PMI unexpectedly dropped to 11-month low level of 53.7 in December, lower than market expectations of a rise to a reading of 55.5. In addition, the nation’s building permits eased more than forecasted 5.2% on monthly basis in November, following a revised rise of 5.9% recorded in October and against market expectations for a 2.5% drop. Also, housing starts surprisingly eased 1.6% on a monthly basis in November, compared to market expected 3.1% gain.

In technical analysis, Coz forex senior derivatives trader Daniel • Moloney said, EUR/USD is predicted to find support at 1.2433, and a drop through could take it to the next support line of 1.2371. Meanwhile, the pair is predicted to find its first resistance at 1.2564, and a rise through could take it to the next resistance line of 1.2633.

Trading trends in the Euro today are expected to be determined by the Euro-zone’s final CPI reading, set for release in a few hours. Additionally, investors would keep a close eye on the Fed’s interest decision along with the US inflation data, scheduled later today.

(COZ forex UK)

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COZfx: Pound almost unchanged vs. stronger USD

COZforex: The pound was almost unchanged against the US dollar on Monday, hovering within close distance of a 15-month trough as demand for the greenback remained broadly supported.

Trading volumes were expected to remain light this week with many investors away for the Christmas holiday and ahead of the New Year's holiday.

GBP/USD hit 1.5618 amid European morning trade, the session low; the pair subsequently consolidated at 1.5619, dipping 0.06%. In technical analysis, COZforex senior currency strategist Ian • Quigley said, GBP/USD is predicted to find support at 1.5605, and a drop through could take it to the next support line of 1.5566. Meanwhile, the pair is predicted to find its first resistance at 1.5683, and a rise through could take it to the next resistance line of 1.5722.

The dollar remained supported after the Federal Reserve signalled last week that it was on track to raise interest rates next year but said it was taking a patient stance.

The central bank also acknowledged the improvement in the US labor market and noted that the economy is making progress toward its goals in inflation and employment.

The pound showed little reaction to a report on Friday by the Confederation of British Industry showing that its index of realized sales climbed to a 26-year high of 61 this month from 27 in November, blowing bast expectations for an increase to 30.

Later in the day, the US was to release on existing home sales.

(COZ forex UK)

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COZfx: Pound trading lower in the Asian session

COZforex: For the past trading session, the GBP dropped 0.42% against the USD and closed at 1.5517, following downbeat economic releases from the UK.

The Pound came under pressure after Britain’s GDP rise less than expected 2.6% on a YoY basis in 3Q 2014 against market expectations for a 3.0% rise and compared to an expansion of 3.2% recorded in the prior quarter. In addition, the nation’s current account deficit unexpectedly widened to £27.0 billion, following a deficit of £23.1 billion. Markets were expecting it to decrease to a level of £17.0 billion.

On the other hand, BBA mortgage approvals registered a decline to 36.72 K, higher than market expectations of a drop to 36.40 K. It had recorded a revised reading of 37.15 K in the prior month, thus highlighting a slowdown in British housing market.

In technical analysis, COZforex senior currency strategist Ian • Quigley said, GBP/USD is predicted to find support at 1.5463, and a drop through could take it to the next support line of 1.5413. Meanwhile, the pair is predicted to find its first resistance at 1.5586, and a rise through could take it to the next resistance line of 1.5660.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

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COZfx: Gold prices gain on safe haven demand

COZforex: Gold prices rise on Monday in early Asia with the focus on safe haven demand.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery added 0.18% to $1,188.30 a troy ounce.

Last week, gold futures ended slightly higher on Friday, as investors returned to the market to seek cheap valuations after prices hit a one-month low earlier in the session.

Despite Friday's modest gains, gold dropped $8.70, or 0.76%, on the week, the third consecutive weekly loss.

Also on the Comex, silver futures for March delivery rise 0.95% to $15.918 a troy ounce. Elsewhere in metals trading, copper for March delivery gained 0.22% to $2.822 a pound.

In the week ahead, investors will be turning their attention to Friday’s US nonfarm payrolls report for further indications on the strength of the recovery in the labor market. Wednesday’s Federal Reserve meeting minutes will be also closely watched.

(COZ forex UK)

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COZfx: NZD/USD holds steady in cautious trade

COZforex: The New Zealand dollar held steady against its US counterpart on Wednesday, as expectations for a US rate hike this year continued to lend broad support to the greenback.

NZD/USD hit 0.7736 amid early European trade, the session low; the pair subsequently consolidated at 0.7765. In technical analysis, COZforex senior currency strategist Ian • Quigley said, NZD/USD was likely to find support at 0.7679, Tuesday's low and resistance at 0.7811, Tuesday's high.

The greenback remained broadly supported by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.

The Fed is widely expected to raise interest rates in the coming year as the steady economic recovery in the US continues.

Meanwhile, investors remained cautious during uncertainty over Greece’s future in the euro zone if far-left anti-austerity party Syriza won elections due to be held later this month.

Later in the day, the US was to release a report on ADP nonfarm payrolls, in addition to data on the trade balance. In addition, the Fed was to publish the minutes of its most recent meeting.

(COZ forex UK)

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COZfx: AUD stronger after surprise jump in new jobs

COZforex: The Australian dollar gained on solid jobs data released Thursday that saw a spike in new employment and a downtick in the overall employment rate. Statistics Australia said 37,400 jobs were created in December, compared to 3,800 expected, while unemployment eased to 6.1%, compared to expectations of a 6.3% gain.

AUD/USD traded at 0.8194, up 0.55%, after the data, while USD/JPY changed hands at 117.67, up 0.28%, as core machinery orders rise 1.3%, compared to a 5.0% increase expected in November and CGPI gained 1.9%, compared to a 2.1% rise seen.

Overnight, the dollar remained broadly supported close to 12 year highs against the other major currencies on Wednesday, despite the release of downbeat US retail sales data as the ongoing drop in oil prices continued to support safe-haven demand.

In a report, the US Commerce Department said that retail sales dropped by 0.9% last month, worse than expectations for a decline of 0.1%. Retail sales growth for November was revised down to a 0.4% gain from a previously reported increase of 0.7%.

Core retail sales, which exclude automobile sales, slumped by 1.0% in December, disappointing forecasts for a 0.1% increase. Core sales in November rise by 0.1%, downwardly revised from a previously reported increase of 0.5%.

Crude oil was hit after the World Bank cut its forecasts for global growth on Tuesday, adding to fears over the faltering economic recovery. Oil prices continued to tumble on Wednesday after falling to almost 6 year lows in the previous session, after OPEC said it will not cut output despite a global supply glut.

The rout in oil, which has halved in value in 6 months, has fuelled concerns of exacerbating already low levels of inflation in many major world economies.

(COZ forex UK)

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COZfx: EUR/CHF weekly outlook: 19 – 23Jan

COZforex: The euro regained some ground against the Swiss franc on Friday after posting its largest ever one day fall against the franc in the previous session and hit fresh 12-year lows against the dollar during prospects for monetary easing by the European Central Bank as early as this week.

The euro posted its largest ever single-day decline against the Swiss franc on Thursday after the Swiss National Bank abandoned its 1.20 per euro exchange rate cap that it imposed in September 2011.

SNB Chairman Thomas Jordan said Thursday the cap had “protected the Swiss economy from serious harm” but added that maintaining the policy was not “sustainable or sensible in the long term.”

“The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified,” the central bank said.

The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc.

The diverging monetary policy stance between the Federal Reserve, which is poised to raise interest rates and central banks in Europe and Japan, has seen the dollar strengthen broadly in recent months.

The surprise move indicated that the SNB is anticipating that the ECB will implement quantitative easing measures at its upcoming meeting on Thursday, in an attempt to spur inflation and growth in the euro area.

An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.

EUR/CHF was trading at 0.9930 late Friday, up 1.75% for the day after falling to all-time lows of 0.8696 on Thursday. The pair still ended the week with losses of more than 17%.

(COZ forex UK)

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COZfx: GBP/USD falls during UK jobs data & BoE minutes weigh

COZforex: The pound fell against the US dollar on Wednesday, re-approaching 18-month lows despite upbeat UK jobs data as the minutes of the Bank of England's latest meeting minutes showed a new consensus in favor of keeping interest rates on hold.

GBP/USD hit 1.5076 amid European morning trade, the session low; the pair subsequently consolidated at 1.5106, shedding 0.25%. In technical analysis, COZFX strategist Nigel Boynton said, Cable was likely to find support at 1.5032, the low of January 8 and an 18-month trough and resistance at 1.5236, the high of January 16.

In a report, the UK Office for National Statistics said that the rate of unemployment dipped to 5.8% in the 3 months to November from 6.0% in the previous 3 month-period and better than expectations for a reading of 5.9%.

The report also showed that the claimant count dropped by 29,700 last month, compared to expectations for a decline of 25,000 people. November’s figure was revised to a drop of 29,600 people from a previously reported decline of 26,900.

Data also showed that the average earnings index rise 1.7% in the 3 months to November, meeting forecasts, after increasing by 1.4% in the three months to October.

Excluding bonuses, wages rise by 1.8% in the three months to November, below expectations for a gain of 1.9% and following a 1.6% increase in the three months to October.

Separately, the minutes of the BoE's January policy meeting showed that members voted unanimously to keep the asset puschase facility program on hold.

Members also voted unanimously to keep interest rates unchanged at a record-low 0.5%. During the five previous months, board members Martin Weale and Ian McCafferty had consistently voted to raise interest rates to 0.75%.

Later in the day, the U.S. was to release data on building permits and housing starts.

(COZ forex UK)

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COZfx: USD/CAD pulls away from nearly 6-year peak on US data

COZforex: The US dollar edged lower against its Canadian counterpart on Tuesday, pulling away from a nearly 6 year peak as a disappointing report on US durable goods orders dampened demand for the greenback, while markets eyed the Federal Reserve's upcoming policy statement.

USD/CAD hit 1.2431 amid early US trade, the session low; the pair subsequently consolidated at 1.2417, declining 0.45%. In technical analysis, COZforex senior currency strategist Ian • Quigley said, the pair was likely to find support at 1.2355, the low of January 23 and resistance at 1.2501, the session high and a nearly 6 year peak.

In a report, the US Commerce Department said that total durable goods orders, which include transportation items, dropped 3.4% last month, compared to expectations for a gain of 0.5%.

Orders for durable goods in November were revised down to a 2.1% drop from a previously reported drop of 0.9%.

Core durable goods orders, excluding volatile transportation items, dropped by 0.8% in December, disappointing forecasts for a 0.6% gain.

Core durable goods orders declined by 1.3% in November, whose figure was revised from previously reported drop of 0.7%.

(COZ forex UK)

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COZfx: NZD/USD hits fresh 4-year lows on RBA news, NZ data ahead

COZforex: The New Zealand dollar hit fresh 4 year lows against its US counterpart on Tuesday, as the currency reacted to news of a surprise rate cut by the Reserve Bank of Australia and as markets eyed New Zealand employment data due later in the day.

NZD/USD hit 0.7191 amid early European trade, the pair's lowest since March 2011; the pair subsequently consolidated at 0.7190, tumbling 1.57%. In technical analysis, COZforex senior currency strategist Ian • Quigley said, NZD/USD was likely to find support at 0.7113 and resistance at 0.7330, Monday's high.

The New Zealand dollar was hit by news the RBA unexpectedly lowered its benchmark interest rate to a new record-low 2.25% from 2.50% at the conclusion of its monthly policy meeting.

Also Tuesday, the Australian Bureau of Statistics said that the country's trade deficit narrowed to A$0.44 billion in December from A$1.02 billion in November, whose figure was revised from a previously estimated deficit of A$0.92 billion. Analysts had expected the trade deficit to A$0.77 billion in December.

In a separate report, the Australian Bureau of Statistics said that building approvals dropped 3.3% in December, compared to expectations for a 5.0% drop. The change in building approvals for November was revised to a 7.7% increase from a previously estimated 7.5% gain.

Later in the day, the US was to release data on factory orders, while New Zealand was to produce data on the change in the number of people unemployed and the unemployment rate.

(COZ forex UK)

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COZfx: EUR/USD weekly outlook for 9 – 13Feb

COZforex: The euro dropped sharply against the dollar on Friday after strong US employment report reinforced expectations for a mid-year rate hike by the Federal Reserve, underlining the diverging economic recoveries in the US and euro zone.

The Labor Department reported that the US economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.

While the unemployment rate ticked up to 5.7% last month from December’s 5.6% hourly earnings and the participation rate both saw increases in January.

The upbeat jobs was seen as strong enough to indicated that the Fed will remain on track to start raising rates from near zero levels as early as June. EUR/USD was at 1.1316 in late trade, down 1.14% for the day.

The euro remained under pressure as concerns over Greek debt negotiations continued to weigh on market sentiment.

Ratings agency Standard and Poor’s downgraded Greece late Friday and warned that time is running out for Athens to reach an agreement on a new financing program with creditors.

S&P downgraded Greece to B- from B, one notch above default, and kept the outlook at "negative", indicating that further ratings cuts are possible.

The announcement came after the ECB said it will no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece’s central bank provide additional liquidity for its lenders.

In the week ahead, the euro zone is to release what will be closely watched data on fourth quarter economic growth on Friday. Investors will also be focusing Friday’s US consumer sentiment data.

(COZ forex UK)

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COZfx: Aussie weaker after slew of Asia data, as RBA meet looms

COZforex: The Australian dollar fell on Monday in Asia after a slew of data from around the region since the weekend that pointed to ongoing efforts to kickstart growth, but also highlighted chances of a central bank rate cut.

AUD/USD fell 0.27% to 0.7787, with the Reserve Bank of Australia due to make its latest policy announcement on Tuesday. USD/JPY traded at 119.81, up 0.19%. Elsewhere, EUR/USD traded at 1.1174, down 0.19%.

On Monday, Australia's AI Group PMI dropped 3.6 points to 45.4 in February, data released Monday showed. Also, the Melbourne Institute inflation gauge was flat in February, compared to a 0.1% expectation found in January. Business inventories in the fourth quarter in Australia fell 0.8%

The Commerce Department reported that US gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.

Other reports showed that US pending home sales rise to a 1.5 year high in January and consumer sentiment also remained strong.

Last week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

In the week ahead, Friday’s US employment report will be closely watched, while central banks in Australia, Canada, the UK and the euro zone are all to hold monetary policy meetings.

(COZ forex UK)

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COZfx: Yen trading higher in the Asian session

COZforex: For the past trading session, the USD weakened 0.42% against the JPY and closed at 119.69.

In the Asian session, USD/JPY is trading at 119.65, with the USD trading marginally lower from yesterday’s close.

Early morning data showed that Japan’s Markit services PMI dropped into contraction territory, after registering a level of 48.5 in February and compared to prior month’s reading of 51.3.

In technical analysis, COZforex senior currency strategist Ian • Quigley said, USD/JPY is predicted to find support at 119.37 and a fall through could take it to the next support line of 119.1. Meanwhile, the pair is predicted to find its first resistance at 119.93, and a rise through could take it to the next resistance line of 120.21.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

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COZfx: GBP/USD rises but upside seen limited

COZforex: The pound rise against the US dollar in quiet trade on Monday, but gains were expected to remain limited as Friday's strong US employment report continued to support the greenback.

GBP/USD hit 1.5111 amid European morning trade, the session high; the pair subsequently consolidated at 1.5097, advancing 0.42%. In technical analysis, coz forex senior derivatives trader Daniel • Moloney said, the pair was likely to find support at 1.5212, the low of March 5 and resistance at 1.5196, the high of February 3.

The dollar strengthened broadly after official data on Friday showed that the US economy added 295,000 jobs in February, far more than the 240,000 forecast by economists. The unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008.

The strong report fuelled expectations that the Federal Reserve will start raising interest rates around the middle of this year.

Market participants began to redirect their attention to Greece as the euro group of finance ministers was to hold talks in Brussels later in the day to discuss proposed Greek economic reforms.

(COZ forex UK)

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COZfx: USD/CAD fell after mixed US data

COZforex: The US dollar declined against its Canadian counterpart on Thursday, after mixed US economic report, although disappointing Canadian home sales data limited the local currency's gains.

USD/CAD hit 1.2619 amid early US trade, the pair's lowest since Tuesday; the pair subsequently consolidated at 1.2645, dropping 0.80%. In technical analysis, COZFX strategist Nigel Boynton said, USD/CAD was likely to find support at 1.2570, the low of March 9 and resistance at 1.2798, Wednesday's high and a 6 year high.

The US Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending March 7 decreased by 36,000 to a seasonally adjusted 289,000 from the previous week’s total of 325,000.

Analysts had expected initial jobless claims to fall by 20,000 to 305,000 last week.

Meanwhile, the US Commerce Department said that retail sales dropped 0.6% last month, disappointing expectations for a gain of 0.3%. Retail sales declined by 0.8% in January.

Core retail sales, which exclude automobile sales, slumped by 0.1% in February, compared to forecasts for a 0.5% increase. Core sales in January dropped 1.1%, downwardly revised from a previously reported fall of 0.9%.

In Canada, official data showed that new house prices slipped 0.1% in January, disappointing expectations for a 0.2% rise, after a 0.1% uptick the previous month.

(COZ forex UK)

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COZfx: Euro reverses its gains ahead of Germany’s ZEW’s economic survey data

COZforex: For the past trading session, the EUR rise 0.64% against the USD and closed at 1.0571.

Yesterday, the ECB announced that it has spent €9.75 billion buying government bonds, in the first week of its programme to pump in more than €1 trillion in the European economy till September 2016.

Separately, the ECB President, Mario Draghi opined that a sustained economic recovery in the Euro-zone was taking hold and added that confidence among firms and consumers in the region was on the rise.

In the US, industrial production advanced 0.1% on a monthly basis in February, compared to a decline of 0.3% recorded in the preceding month. Markets were expecting it to rise 0.2%. Meanwhile, manufacturing production in the nation recorded an unexpected drop of 0.2% MoM in February, lower than market expectations for an unchanged reading. In the previous month, it had dropped by a revised 0.3%.

In technical analysis, COZforex senior currency strategist Ian • Quigley said, EUR/USD is predicted to find support at 1.0500, and a decline through could take it to the next support line of 1.0438. Meanwhile, the pair is predicted to find its first resistance at 1.0623, and a rise through could take it to the next resistance line of 1.0683.

Trading trends in the Euro today are expected to be determined by Germany’s ZEW economic sentiment coupled with the Euro-zone’s CPI data, scheduled in a few hours.

(COZ forex UK)

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COZfx: NZD/USD weekly outlook, 23/03 – 27/03

COZforex: The New Zealand dollar jumped to a more than 2 week high against its US counterpart on Friday, as markets pushed back expectations for the first US rate hike after the Federal Reserve downgraded its outlook on growth and inflation.

NZD/USD hit 0.7592 on Friday, the pair's highest since March 5, before subsequently consolidating at 0.7566 by close of trade on Friday, up 2.04% for the day and 3.08% higher for the week.

The sharp drop in the dollar came about amid uncertainty over the path of US monetary policy after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections on Wednesday.

The Fed statement dampened expectations for a mid-year rate hike, prompting investors to exit positions which would benefit from a strong dollar.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, tumbled 1.4% on Friday to end at 98.05, moving further away from a 12-year high of 100.78 hit on March 13.

Meanwhile, official data on Thursday showed that New Zealand's economy grew 0.8% in the fourth quarter of 2014, in line with expectations and down from 0.9% in the previous quarter.

The Reserve Bank of New Zealand left interest rates on hold at 3.5% earlier in the month, citing strong economic growth.

In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down consumer prices.

(COZ forex UK)

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COZfx: Aussie slides lower against stronger greenback

COZforex: The Australian dollar was lower against its US counterpart on Wednesday, as the greenback remained mildly supported after Tuesday's upbeat US economic reports.

AUD/USD hit 0.7851 amid late Asian trade, the session low; the pair subsequently consolidated at 0.7861, shedding 0.22%. In technical analysis, AUD/USD is predicted to find support at 0.7840, and a decline through could take it to the next support line of 0.7792. Meanwhile, the pair is predicted to find its first resistance at 0.7938, and a rise through could take it to the next resistance line of 0.7988.

The dollar found support after data on Tuesday showed that US consumer prices rise 0.2% in February, in line with market expectations. Core inflation, which excludes food and energy costs was up 1.7% from the same month last year, the largest increase since November.

The uptick in underlying inflation indicated that the Federal Reserve would still have leeway to tighten monetary policy even with inflation running below target.

A separate report showed that US new home sales jumped 7.8% to an annual unit rate of 539,000 last month, the highest level since February 2008, the Commerce Department said.

In addition, the preliminary reading of the US manufacturing purchasing managers' index rise to 55.3 this month, the highest level since October, from 55.1 in February.

Later in the day, the US was to publish data on durable goods orders.

(COZ forex UK)