USD stays at a high on a light-data day

January 14, 2015

The USD index maintains its high level above the 92 mark as the Euro Dollar fell to 6-year low of 1.1750 again. However, other majors kept up their strengths against the Dollar yesterday.

UK December annual CPI unexpectedly fell to 0.5%, which marks a 15 year low of this data series. The data was dragged by recent price slumps of energy goods and the weakness in the Euro area. The first step of the BOE’s rate hike may once again be delayed as the economy is moving away from the status that can be described as ready for interest rate rising. The sterling dropped below 1.51 after the release, but recovered most of the day’s loss in the rest of the trading day. Two lower shadows are left in the daily chart, showing how participants are still expecting the Pound Dollar to bounce in the short term.

GBPUSD 141115 | Vantage FX

The Yen strengthened yesterday leaving the Dollar Yen struggling around the 118 level. Yen has rebounded by more than 3% after reaching the weakest level at 121.85 in last December. The low oil price has had positive effects on the Japanese economy, reducing the necessities of further easing from the BOJ. As the bullish channel has been broken, the rising of Dollar Yen may stop in the middle run.

USDJPY 140115 | Vantage FX

The safe-haven demands also boosted the Gold prices. However the $1240 resistance may be the impenetrable barricade of bears. The Gold fell back to $1230 this morning after it once hit the day high of $1244, leaving a long upper shadow. Technically, the pattern shows a short-term retracement coming.

XAUUSD 140115 | Vantage FX

As to the stock markets, The Shanghai Composite rose by 0.18% to 3235. ASX 200 fell 0.33% to 5404. The Nikkei Stock Average lost 0.64%. The European markets mostly rose on the expectation of further easing by ECB. The UK FTSE rose 0.63%, the German DAX surged 1.63% and the French CAC Index rocketed 1.47%. The US market fell slightly, dragged by the weakness of energy sector. The S&P 500 closed 0.26% lower to 2023. The Dow lost 0.15% to 17613, and the Nasdaq Composite Index dropped 0.07% to 4661.

On the data front, the European Court of Justice is due to announce a preliminary ruling regarding the constitutionality of the ECB’s OMT, which will be the focus of the market today. If the court is not favour of the OMT, the ECB’s abilities of future stimulus will be significantly limited. Also, US Retail Sales will be released at 0:30 AEDST.
Have a great trading day!

Anthony


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