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Dollar Gains On Euro – Forex Morning Report

EUR continues to loose against USD during today’s Asian session, trading with a minimum difference from the opening mark. The approach of the Chinese New Year, as well as the markets closed in the USA on Monday due to the celebration of Martin Luther King Jr. Day, also contributed to reducing volatility. At the same time, rather optimistic data from Germany supported EUR. The Producer Price Index in December increased by 0.1% MoM after the zero dynamics of the previous month. In annual terms, the index decreased by 0.2% YoY, correcting from the previous value of –0.7% YoY. The indicator turned out significantly better than expectations, which were calculated at –0.6% YoY. Today, investors expect the publication of ECB Bank Lending Survey, as well as January data on Economic Sentiment from ZEW.


GBP is trading near zero against USD during today’s Asian session, trying to consolidate above the target level of 1.3000 since the beginning of the current trading week. The growth of the instrument yesterday was mainly due to technical factors, while the general market volatility remained reduced, and investors continued to express concern about the upcoming Brexit process. The UK should leave the EU at the end of January, after which the phase of trade negotiations will begin, which is likely to last until December. Today, investors are awaiting the publication of UK employment data for November-December. Analysts predict that Average Earnings will slow down somewhat, and the overall Unemployment Rate will remain at the previous level of 3.8%.


NZD declines slightly against USD during today’s Asian session, located not far from local lows updated last Wednesday. Despite the existing risks, the instrument still cannot consolidate below the support level of 0.6600. The pressure on the pair is exerted by macroeconomic statistics from New Zealand. Business NZ Performance of Services Index in December fell from 53.3 to 51.9 points, which turned out to be worse than the average market expectations. During the day, traders expect the publication of the Global Dairy Trade New Zealand Dairy Price Index. The indicator is expected to decline by 0.3% MoM after rising by 2.8% MoM in the previous month. There will again be little data from the USA today, and therefore a low level of volatility is likely to continue.


USD is falling against JPY during today’s Asian session, retreating from local highs, updated at the end of last week. The instrument loses about 0.17% and is trying to consolidate below 110.00. The reason for the appearance of the “bullish” trend on the yen was the meeting of the Bank of Japan. The Japanese regulator kept the interest rate at –0.10%, noting that it plans to maintain a “soft” monetary policy until a target inflation rate of 2% is reached. In addition, the Bank of Japan raised its forecasts for GDP in the near future, which contributed to the growth of optimism in the market. In the fiscal year 2019–2020, the regulator expects the economy to grow by 0.8% YoY, which is 0.2% higher than previous estimates. Next year, the growth of the Japanese economy may come close to 1%, which is also better than the previous forecast of 0.7% YoY.


Gold prices are rising during today’s Asian session, updating local highs of January 8. The instrument adds about 0.39%, developing a “bullish” momentum formed at the end of last week. The growth of the instrument is facilitated by the continued tension in the Middle East, which was again actively discussed in the market after the Hussite rebel attack in Yemen. In addition, the focus is on the impeachment procedure of Donald Trump, which also helps strengthen the position of gold.

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