Gold dropped for the first time this week, Silver slid 1 percent and as the EUR/USD pair trades at 1.4725; 0.45% below its day opening level. Take a look at Xforex's morning review to get updated.
Morning Review – 07.00 am GMT
Commodities
Commodities Last Price Net Change
WTI Crude Oil 71.19 -0.5%
Spot Gold 1047.9 -8.4%
Gold – Gold dropped for the first time this week, paring its biggest weekly advance since April, after a climb to a record prompted some investors to sell the metal to lock in gains. Gold for immediate delivery dropped 0.8 percent to $1,046.68 an ounce at 2:20 p.m. in Singapore. Bullion touched an all-time high of $1,061.55 an ounce yesterday.
Silver slid 1 percent to $17.615 an ounce
Crude oil – Brent crude oil for November settlement dropped as much as 71 cents, or 1 percent, to $69.06 a barrel on the London-based ICE Futures Europe exchange. The contract was at $69.19 at 2:31 p.m. in Singapore. Yesterday, it rose 3.8 percent to end the session at $69.77, the biggest gain since Sept. 30
Oil – Oil yesterday touched $72.55 a barrel, the highest in almost three weeks, after Labor Department data showed initial unemployment benefit applications fell to the lowest since January. This fanned optimism over the prospects for a recovery in energy consumption. Oil may decline next week as supply climbs and demand slips, a Bloomberg survey showed. Eleven of 29 analysts and traders, or 38 percent, said futures will drop through Oct. 16. Ten respondents, or 34 percent, forecast the market will rise and eight said prices will be little changed.
Interest Rates:
The benchmark interest rate is as low as zero in Canada, U.S and the Swiss with 0.25% and 0.1 percent in Europe and Japan. Compared with England remaining on 0.5%, New- Zealand with 2.5% and Australia – rose to 3.25%!!!
The UK interest rates are being revised later today.
Currencies
FX Last Price Net Change
EUR/USD 1.4794 0.0106
USD/CAD 1.0521 -0.0091
USD/JPY 88.42 -0.17
GBP/USD 1.6069 0.0115
AUD/USD 0.9059 0.0156
EUR/USD – The U.S. currency, paring a 1 percent decline on the week, rose to a fresh two-week high at 1.4820 on Thursday , but has retreated during Asian session to 1.4705 low. Currently, the pair trades at 1.4725; 0.45% below its day opening level. In case of further decline , next support levels could be 1.4685 (Oct 8 low) and 1.4650/55 (/ and 6 Oct low). On the upside the Euro might find resistance at 1.4735 (Oct 7 high), and above here, 1.4780/95 and 1.4820 (Oct 8 high).
EUR/GBP – The pair reached a low of 0.9160 on Thursday and during Asian session the Euro reached a 0.9180 low. Resistance levels are 0.9210 and 0.9275. Support levels lie at 0.9160 and 0.9135.
GBP/USD– The Pound had risen to it’s highest this week at 1.6100 on Thursdya before retreating lower. It is still, however, considered on negative figures while below 1.6110 as resistance is seen at 1.6110/82. For next week, the GBP is expected to decline towards support level of 1.5690/1.5571 and 1.5270.
USD/JPY – The yen dropped against 15 of its 16 most-traded counterparts after Japan’s machinery orders gained less than forecast, adding to signs its recovery will trail that of other economies. The U.S. currency climbed 0.9 percent, set for the steepest daily gain since Aug. 7, to 89.19 yen as of 7:22 a.m. in London from 88.39 yen in New York yesterday. Currently the USD is trades at 89.15 JPY and resistance levels lie at 89.40 (Oct 7 high), and above here, 89.65/70 (Oct 6 high) and 90.00. On the downside, support levels lie at 88.35 day low , and below here, 88.15 (Oct 8 low) and 88.00.
EUR/JPY – Japan’s currency dropped to 131.35 per euro from 130.76. It has weakened 0.3 percent on the week. In the last 5 hours the pair have been trading sideways between 131.26 to 131.68. Resistance levels lie at 131.45/65 and 132.05. On the downside, support levels lie at 130.55/65 and 130.00.
AUD/ USD- Australia’s dollar traded at 90.32 U.S. cents from 90.61 cents in New York yesterday, when it touched 90.90 cents, the strongest level since Aug. 7, 2008. After reaching it’s 13- month’s high this week at 0.9090, the pair reversed, to decline towards 0.9020 low during Friday's Asian session, but the short-term momentum remains highly positive. Support levels, according to Flesar, lie at 0.9000, 0.8950 and 0.8870. On the upside, resistance levels are 0.9100, 0.9150 and 0.9200.
USD/CAD – The pair has been trading sideways in the last 17 hours within a very tight limit of 50 pips between 1.0502 and 1.0550. This is occurring within a wider range trade, stirring since October the 6th and ranging between 1.0502 and 1.0650. Both create very clear support and resistance levels. Support : 1.0502, 1.0415 and 1.0328. Resistance: 1.0550, 1.0565 and 1.0616.
Headlines
The Overnight Express: Bernanke Says Accommodative Policy to Continue Until Recovery Firms
The following is a summary of the main economic events from the North American and Asia-Pacific sessions:
– Fed chief Bernanke tells an audience in Washington, D.C., that accommodative policies will remain in place for “an extended period”; however, he notes that once the recovery coalesces, “We will need to tighten monetary policy to prevent the emergence of an inflation problem down the road.”
– House Speaker Pelosi confirms that an expansion of the first-time home buyer tax credit (currently, $8,000) is indeed under consideration.
– Kansas City Fed President Hoenig (a voter) tells an audience in Oklahoma City that rates will remain low until the U.S. economic recovery solidifies.
– Fed Governor Tarullo (voter) warns an audience in Phoenix, Arizona, that the U.S. economic recovery shouldn’t be exaggerated; repeats that rates are likely to remain low for an “extended period”.
– Richmond Fed President Lacker (voter) tells reporters in Washington, D.C., that the risk of a relapse into recession has greatly diminished but has not completely vanished.
– WSJ: Dallas Fed President Fisher (non-voter) says things are going in the right direction, but now is not the time to withdraw monetary stimulus.
– U.S. Treasury sells $12.0 billion in a 30-year bond reopening, at a high yield of 4.009%; bid to cover ratio was 2.37 compared to an average of 2.65 over the previous three auctions.
– Freddie Mac says U.S. 30-year mortgage rate fell to 4.87% from 4.94% the week prior.
– BOC Senior Deputy Governor Jenkins tells audience in Vancouver, Canada, that the strong Canadian dollar remains a risk for the country’s economic recovery; says the central bank plans to keep rates low until June 2010.
– Japanese machine orders increase 0.5% month-over-month in August versus the consensus call for a 2.2% increase, and following their 9.3% decline in July; annualized, orders fall 26.5%, disappointing expectations for only a 25.4% fall, but better than the prior month’s 34.8% drop.
– Bank of Korea leaves its benchmark rate unchanged at 2.0% for an eighth consecutive month.
– RBNZ says it will pay the Kiwi government a dividend of $NZ630 million due to the central bank making larger profits in fiscal 2009 from “abnormally large changes in market conditions”.
– GM is about to sell its Hummer brand to Chinese company Sichuan Tengzhong Heavy Industrial Machinery Corp.; the SUV brand will sell for approximately $150 million, according to a Reuters report.
– WSJ Freedom of Information Act request reveals that, since taking office, U.S. Treasury chief Geithner has spoken most frequently to the heads of Golman Sachs, JP Morgan Chase, Citigroup and BlackRock.
– WSJ: Vivendi says it would like to sell its 20% stake in NBC Universal at some time this year.