U.S. Dollar Trading softened again on Tuesday

CURRENCY TRADING SUMMARY
U.S. Dollar Trading (USD) softened again on Tuesday on the back of further poor economic data in the form of Durable goods. With expectations at -2.8% already a worse off figure than the previous of 2.9%, the actual figure was largely inferior coming in at -7.8%. Following this sharp decline in US Durable goods added to the speculation of a Fed rate cut in response to a slowing economy. Consumer confidence was also made public with the figure coming in better than expected at 112.5 rather than the forecasted figure of 108.9 for the month of February causing some USD steadying. The dollar reached a two month low against the Euro as investors took a risk adverse attitude minimizing their exposure, in light of the poor economic data, plunge in global stocks and growing tensions with Iran. In US share markets, the NASDAQ dropped 96.66 points (-3.86%) whilst the Dow Jones also had a sharp decline of 416.02 points (-3.29%). Crude oil also dropped over night as dropped by US$1.20 a barrel to US$60.19. Looking ahead, key data is set to continue to be released out of the US with GDP (Q4, 2nd release) expecting a figure of 2.3%. Further more Chicago PMI is also set for release with expectations at 50.0. Finally New Home sales is also out is expected 1080K down on the previous 1120K.

The Euro (EUR) reached a two month high against the USD following a plunge in global stocks. The M3 came in slightly better than expected at 9.8% than the forecasted 9.7%. Overall the Euro traded within a range of a low 1.3161 and a high of 1.3260 before closing at 1.3236 in the New York session. Looking ahead Consumer confidence and Unemployment rate are due for the Eurozone with markets expecting unchanged figures of -6.0 and 7.5% respectively.    

The Japanese Yen (JPY) strengthened across the board due to the unwinding of carry trades. The USDJPY traded within a range of a low 117.50 and a high of 120.75 before closing the day at 117.98 in the New York session. Looking ahead, plenty of key data is out of Japan today in the form of Industrial Production with markets expecting a figure of -1.8% with the previous at 0.9%. Furthermore Retail sales are also set for release with a forecasted figure of 0.1% with the previous at -0.2%. Finally PMI manufacturing is also due today with the previous being 53.4. UPDATE: PMI manufacturing: 53 (previous 53.4), Retail Sales: -0.8, Industrial Output: -1.5    

The Sterling (GBP) firmed against the Dollar, but fell sharply against the JPY. Overall the GBP traded within a range of low 1.9594 and a high of 1.9673 before closing the day at 1.9615 in the New York session. Looking ahead, Gfk consumer confidence is out as well as Nationwide House prices with markets expecting a figure of -8 and 0.5%.   

The Australian Dollar (AUD) dropped against the USD following investors minimizing risk. Overall the AUD traded within a range of a low 0.7875 and a high of 0.7946 before closing at 0.7875 in the New York session. 

Gold (XAU) dropped despite a weaker dollar and stable oil prices. Gold dropped by US$19.20 an ounce to US$669.40 

The Czech Crown (CZK) slid as low as 28.469 against the Euro in morning trade, a level unseen since late September 2006. Largely due to a high yielding gap and rising investors aversion about pouring money into emerging markets amid concern over Iran’s nuclear stand off  pas well as high oil prices. The crown reversed early losses in afternoon trade as it rebounded from a 5-month low, with some analyst advising investors to use current weakness to place bets on a gradual recovery this year.

Euro 1.3230
Initial support at 1.3079 (Feb 22 low) followed by 1.3074 (Former resistance from Feb 2). Initial resistance is now located at 1.3249 (76.4% retracement of the 1.3368 to 1.2865 decline) followed by 1.3298 (Jan 2 reaction high).

Yen 118.20
Initial support is located at 118.68 (Feb 27 low) followed by 118.32 (50% retracement of the 118.98 to 121.65 advance). Initial resistance is now at 120.77 (Feb 27 high) followed by 121.65 (Feb 22 high)

Pound  1.9630
Initial support at 1.9592 (Feb 27 low) followed by 1.9537 (Feb 23 low). Initial resistance is now at 1.9679 (Feb 15 high) followed by 1.9751 (61.8% of 1.9917-1.9482, 1.9479 is Feb 2 high)

Australian Dollar  0.7860
Initial support at 0.7873 (Feb 22 low) followed by 0.7845 (Feb 19 low). Initial resistance is now at 0.7948 (Feb 27 high) followed by 0.7982 (Jan 3 trend high).

Gold  660.60
Initial support at 682.80 (Feb 26 low) followed by 673.00 (Feb 23 low). Initial resistance is now at 688.40 (Feb 23 trend high) followed by 694.70 (May 18 reaction high)