RESEARCH VIA DAILY I FOREX REPORT 10 JUNE 2014

DAILY CURRENCY UPDATE

Pound little changed vs. dollar after U.K. factory data
The pound was little changed against the dollar on Tuesday after data showed that manufacturing production in the U.K. rose for a third straight month in April, pushing the annual rate to a three year high.
GBP/USD rose to an intra-day high of 1.6808 after the data, from 1.6791 before.
 
Cable was likely to find support at 1.6750 and resistance at 1.6844, last Friday’s high.
 
The Office for National Statistics reported that manufacturing output rose 0.4% in April from a month earlier, as expected. On a year-over-year basis manufacturing production rose 4.4% ahead of forecasts for a 4% increase. It was the largest annual increase in output since early 2011.

Dollar lower against yen, euro steady
The dollar was lower against the yen on Tuesday, while the euro was steady against the greenback as markets continued to mull over the implications of the European Central Bank’s stimulus measures.
USD/JPY was down 0.29% to 102.22 from 102.51 on Monday.
 
Demand for the dollar continued to be underpinned after Friday’s nonfarm payrolls report showed that the U.S. economy added jobs for the fourth successive month in May, with employment returning to its pre-recession peak.
 
EUR/USD dipped 0.05% to 1.3586, holding above the four-month trough of 1.3502 reached last Thursday. The single currency lost 0.4% against the dollar on Monday.
 
The euro weakened broadly on Monday as euro zone bonds rallied, highlighting the diverging monetary policy stance between the ECB and the Federal Reserve.
 
The ECB on Thursday cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses. ECB President Mario Draghi also kept the option of quantitative easing on the table.

NZD/USD rises in risk-on trade
The New Zealand dollar rose against its U.S. counterpart on Tuesday, as news of stimulus measures by the European Central Bank continued to support market sentiment, although demand for the greenback also remained strong.
NZD/USD hit 0.8524 during late Asian trade, the session high; the pair subsequently consolidated at 0.8517, rising 0.27%.
 
The pair was likely to find support at 0.8422, the low of June 5 and resistance at 0.8568, the high of May 28.
 
Market sentiment improved after the ECB unveiled last week a package of measures to avert the threat of persistently low inflation in the euro area.
 
Meanwhile, demand for the greenback remained supported after U.S. employment data released last Friday fuelled further optimism over the strength of the job market's recovery.

AUD/USD edges higher but gains capped
The Australian dollar edged higher against its U.S. counterpart on Tuesday, supported by the release of upbeat Australian business confidence data, although other
disappointing economic reports seemed to limit gains.
AUD/USD hit 0.9369 during late Asian trade, the pair's highest since May 16; the pair subsequently consolidated at 0.9371, adding 0.17%.
 
The pair was likely to find support at 0.9258, the low of June 5 and resistance at 0.9409, the high of May 14.
 
The National Australia Bank earlier reported that its business confidence index rose to 7 last month, from a reading of 6 in April.
 
A separate report showed however that job advertisements in Australia dropped 5.6% in May, after a 1.9% increase in April, whose figure was revised down from a previously estimated 2.2% gain.

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