Housing Sales Weigh on Dollar
The dollar slid across the board after US existing home sales and consumer confidence index declined more than expected. The former dropped 8.3% in March, the sharpest decline in nearly two decades, to an annual rate of 6.12 million units. The Conference Board's consumer confidence index fell from 107.2 to 104 in April, below the estimate of 105. This was mainly due to the surge of gasoline prices. The euro rose from 1.3580 to as high as 1.3634, and stands firmly above the 1.36 handle afterwards.
There is a bunch of US and European data to be slated tomorrow morning. Germany IFO index is forecasted to improve slightly from 107.7 to 108 in April. UK GDP is estimated to grow at an annual rate of 2.8% in the first quarter, compared with 3.0% in the previous quarter. US durable goods orders are seen to rise 2.5% in March, versus a 1.7% reading a month earlier. Since today????s existing home sales disappointed the market, the market will look at new home sales due tomorrow for further indication on the housing conditions. New home sales for March are forecasted to increase from 848k units to 888k units.
EURUSD will face interim resistance at 1.3630, followed by 1.3650 and 1.3680. Additional ceilings will emerge at 1.37, backed by 1.3730. Support starts at 1.36, backed by 1.3580, 1.3550 and 1.3520. Subsequent floors are eyed at 1.35.
GBPUSD encounters interim resistance at 2.0030, backed by 2.0050, and 2.0070. Subsequent ceilings will emerge at 2.0100, followed by 2.0130 and 2.0150. On the downside, support begins at 2.0000, followed by 1.9970 and 1.9950. Additional floors are eyed at 1.9930, backed by 1.9900 and 1.9850.
Loonie Fell after BOC Rate Decision
The Bank of Canada held interest rates unchanged at 4.25% as expected after its monetary policy meeting this morning. The bank said the current rate is judged, and at this time it is consistent with achieving inflation target. Following the rate announcement, the loonie weakened from 1.12 to 1.1230 against the dollar. Besides, Canada leading indicator fell from 0.7% to 0.4%, worse than the consensus of 0.5%.
Yen Rose on Carry Trades Unwind
The yen rose earlier today as some carry trades were unwound following a combination of an upbeat release from Japan and an disappointing report from Australia. Australian consumer prices rose less than expected in the first quarter, while Japan corporate service prices rose 0.6% in March, beating the estimate of 0.2%. The yen therefore strengthened versus high-yielding currencies, especially the Australian dollar.
USDJPY encounters interim resistance at 118.80, backed by 119 and 119.30. Subsequent ceilings will emerge at 119.50, followed by 119.80 and 120. On the downside, support begins at 118.50 and 118.20, followed by 118. Additional floors are eyed at 117.70, backed by 117.50 and 117.30.