ASIA session review: Dollar holds steady

Data released: 

09:00 GMT Germany IFO - Business Climate (Jan) 110.6 110.0 109.5 

09:00 GMT Germany IFO - Current Assessment (Jan) 112.4 112.4 111.6 

09:00 GMT Germany IFO - Expectations (Jan) 108.9 108.0 107.4

The U.S. dollar pulled back from a two-month low against the Japanese yen Monday.

Later Monday, investors were due to receive a report on U.S. new-home sales for December. Economists are looking for a seasonally adjusted annual sales rate of 455,000, down from 464,000 in November.

EURO

Following last week’s 1% gain for the euro versus the dollar, the euro extended its advance Monday. 

The euro strengthened from a seven-week low against the yen after a report showed business confidence in Germany rose for a third month, signaling economic growth in Europe’s largest economy is accelerating.

The Ifo institute’s German business climate index advanced to 110.6 in January from 109.5 in December. Economists predicted an increase to 110, according to the median of estimates.

EUR/USD consolidates a bit lower $1.3700 after it challenged $1.3740 on Friday (initial resistance). Above resistance comes at $1.3820 (Dec 30 highs). Minor support comes at $1.3680 (recent lows), $1.3620 (Thursday’s hourly lows). Below $1.3500 losses may widen to $1.3400 (Nov 21 lows).

POUND

The British pound last week temporarily broke above the $1.66 mark for the first time since May 2011.

GBP/USD retreats from session high on $1.6530 with a strong resistance comes at $1.6660 (Friday’s high), extending to $1.6675/80 (channel line from Jan 10), then - at $1.6740/60. Minor support comes at $1.6470 (recent lows), below - near $1.6400.

YEN

The dollar dropped nearly 2% last week against the Japanese currency.

The yen ended a two-day advance versus the dollar after a report showed Japan’s trade deficit widened to a record last year.

Japan’s trade shortfall widened in 2013 to a record 11.5 trillion yen, a finance ministry report showed in Tokyo. That’s almost double the previous year’s as energy shipments and weakness in the currency pumped up the import bill.

USD/JPY is under pressure after it rose to Y102.75 earlier (minor resistance). Initial support comes at recent lows on Y101.90/80. Below losses may extend to Y101.10 (Nov 26 lows). Above session high acts as resistance around Y103.60.

DATA AHEAD:

US New Home Sales come at 15:00 GMT (0.460M vs 0.464M).

Source of information>>

More information>>