Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from beautiful Hamburg and welcome to our latest Daily FX Report. U.S. stocks closed mixed on Monday as the tech sector dragged the Nasdaq to its worst day since July and kept the S&P near the unchanged mark as investors cleared the decks for Alibaba's debut planned for later this week. Alibaba could be the largest initial public offering in history and has seen "overwhelming" interest, meaning Yahoo's 23 percent stake could be worth more next week than it is now. Heavily-traded Facebook and Netflix lost nearly 4 percent each. The S&P technology sector .SPLRCT lost 0.6 percent as the worst performing of the 10 major S&P sectors.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspective
Output at U.S. factories, mines and utilities fell 0.1 percent in August after a 0.2 percent gain in July. Manufacturing also declined by 0.4 percent as auto production decreased 7.6 percent. As a result the USD fell from the highest level in 14 months against its major peers. The U.S. currency weakened 0.1 percent to 107.19 yen after reaching 107.39 yen in Sept. 12, which was the strongest level since Sept. 2008. The euro fell 0.2 percent against the dollar to $1.2938, while the dollar index, a measure of the dollar's strength against a basket of major currencies, traded flat at 84.240. The Japanese yen slipped 0.13 percent against the dollar to 107.18 yen. The EUR also lost against the yen and depreciated by 0.3 percent to 138.70 yen.
The Australian dollar`s 3.6 percent drop this month arises speculations that the Reserve Bank`s next move will be to raise interest rates. Meanwhile data is suggesting that China, Australia`s largest trading partner, will miss its 2014 growth target what might drive the Aussie lower after it already touched a six-month low of 89.84 cents on Monday.
Due to weak Chines economic data, Brent crude fell below $97 per barrel on Monday, its lowest level in more than two years. The Chinese data cut the prospect for demand at a time of abundant supply, while expectations that the Federal Reserve will provide new details this week about its plans to raise interest rates lifted the dollar. The Brent contract for October delivery, fell as low as $96.21 a barrel, what is the weakest price since July 2012. The contract later pared losses to settle down 46 cents at $96.65 a barrel. The November contract for Brent fell 8 cents a barrel to settle at $97.88. U.S. cruide rose 65 cents to settle at $92.92 a barrel.
Daily Technical Analysis
GBP/USD (Daily)
After reaching the resistance level at 1.7189 in the end of June, the GBP lost in value against the USD and fell to the support level of 1.6086 where it rebounded. At the moment the GBP is experiencing a slightly recovery. The DeMarker and the MACD both indicate that this phsse of recovery could hold for a while. However, it may be likely that the support level will not be strong enough to prevent the GBP from further losses.
Support & Resistance (Daily)
This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational purposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.
Recommended Content
Editors’ Picks
Bank of Japan keeps interest rate steady, as expected
The Bank of Japan (BoJ) board members decided to hold the key interest rate steady at 0%, following its April monetary policy review meeting on Friday. The decision came in line with the market expectations.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price keeps its range around $2,330, awaits US PCE data
Gold price is consolidating Thursday's rebound early Friday. Gold price jumped after US GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the Fed could lower borrowing costs. Focus shifts to US PCE inflation on Friday.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.