Topic: Daily Market Reviews From Forex-Metal
Market review for 07.01.14: The U.S. dollar modestly rose against major currencies after the release of U.S. trade balance.
Asian and European trading sessions:
Euro: The euro exchange rate rose sharply against the dollar, which was associated with the publication of data on inflation in the euro area, which surprised the experts. A preliminary report from the EU statistical agency showed that the Eurozone annual inflation unexpectedly fell last month, reviving concerns about the fact that it could threaten the “fragile " recovery of the currency bloc. According to the report, on an annual basis, the consumer prices rose by only 0.8 % in December, compared with an increase of 0.9 % per annum in November and expectations at 0.9 %. Recall that in October, inflation was 0.7 %, and this prompted the ECB to lower its benchmark interest rate to the lowest level, namely to 0.25 %, to stimulate the economy. The ECB seeks to achieve the inflation rate below 2.0 %. In addition, the data showed that core inflation, which excludes prices for food and energy, was in December, only 0.7%. The EUR / USD pair rose to $ 1.3658 during the European session.
British Pound: The pound rose against the dollar, retreating from a session low, which was associated with the release of a report showed that sales of cars in the UK have returned to pre-crisis level of car sales in the UK in 2013 exceeded the 2007 figure. This auto market has become the busiest in Europe thanks to cheap credit and rising consumer confidence. The car sales last year rose by 10.5% to 2.26 million units. In 2014, experts also predicted growth based on sustainable recovery unexpectedly UK. In 2013, there were only sold by 6% fewer cars than in the pre-crisis 2007 (2.4 million), and only 300,000 less than a year a historic high. Three-quarters of Britons are buying cars on credit, using the low rates and stimulate the state program. The GBP / USD pair rose to $ 1.6430, and then retreated slightly during the European session.
Japanese Yen: The yen traded lower against the dollar as the Bank of Japan reported on the change in the monetary base of the country. The index for December rose by almost 47 % compared with the previous year to a record 193.5 trillion yen ($ 1.85 trillion). Recall that the purpose of the Bank of Japan from December 2012 to double the monetary base to 270 trillion yen by the end of this year. Also decline in the yen was associated with operation of stop orders. According to traders, it happened after the Japanese stock market offset losses incurred earlier.
American trading session:
U.S. Dollar: The U.S. dollar rose modestly against major currencies after the release of U.S. trade balance. Recent data from the U.S. Department of Commerce showed that exports continued to grow in November, while providing more evidence that high rates of growth abroad can improve performance for the U.S. economy. According to the report, the seasonally adjusted U.S. exports increased in November by 0.9 % compared with the previous month, reaching at this level of $ 194.860 billion, which was the highest in history. Imports, meanwhile, fell by 1.4% - to $ 229.110 billion. Given these changes, the trade deficit narrowed in November to $ 34.250 billion, compared with a revised downward deficit the previous month at $ 39.330 billion. We add that the latter figure was the lowest since October 2009. Many experts predicted a decline in the trade deficit to only $ 40.2 billion from $ 40.6 billion. The global economy showed signs of stabilizing in recent months, and provided potential momentum heading for the U.S. in the New Year. Weakness in Europe, Japan and some emerging markets put pressure on U.S. exporters for most of the recovery. Furthermore, the data showed that U.S. exports increased by 5.2 % compared with a year earlier, led by sales growth in China, Mexico and Canada. U.S. exports to China from January to November rose by 8.7% compared with the same period a year earlier. The exports to Canada, which is the largest trading partner for the United States, increased by 2.5 % over the same period.
Gold: The price of gold was reduced by a stronger dollar after data on the U.S. trade balance. The cost of the February gold futures dropped to $ 1224.10 per ounce on the COMEX today.
Oil: The oil price rose by stopping the longest series of declines since August, on fears that the clashes between the Iraqi government and militants linked to “Al Qaeda " could disrupt oil production. The February WTI futures rose to $ 94.15 a barrel on the NYMEX.