RESEARCH VIA DAILY I FOREX REPORT 17 JUNE 2014

DAILY CURRENCY UPDATE

Pound hits session lows after UK inflation data
The pound fell to session lows against the dollar and the euro on Tuesday after data showed that the annual rate of inflation in the U.K. fell to the lowest level in four-and-a- half years in May.

GBP/USD was down 0.22% to 1.6945, from 1.6981 ahead of the data. The pair rose to a five-year high of 1.7011 on Monday.
 
Cable was likely to find support at 1.6900 and resistance at 1.6990.
 
The drop in the pound came after the Office for National Statistics said the annual rate of inflation came in at 1.5% last month, down from 1.8% in April and the lowest reading since October 2009.
 
Economists had expected the annual inflation rate to slow to 1.7%.
 
The drop in inflation was due in large part to lower transport services costs, the ONS said, notably in air fares which were down from the same month a year earlier. Lower prices for food, soft drinks and clothing also weighed.

Dollar edges higher, gains checked before Fed meeting
The dollar edged higher against a basket of other major currencies on Tuesday, but gains were limited as investors remained cautious ahead of this week’s Federal Reserve meeting and amid concerns over the escalating conflict in Iraq.

USD/JPY was up 0.20% to 102.03, from 101.82 late Monday.
 
Concerns over the ongoing Sunni insurgency in Iraq continued to weigh on market sentiment, amid fears over the impact of higher oil prices on global economic growth.
 
Investors were also cautious ahead of the outcome of the upcoming Fed policy meeting on Wednesday, as they looked for fresh indications on the timing.

NZD/USD edges lower as Iraq remains in focus
The New Zealand dollar edged lower against its U.S. counterpart on Tuesday, as concerns over violence in Irak continued to dampen demand for risk-related currencies and as Monday's U.S. data lent further support to the greenback.

NZD/USD hit 0.8654 during late Asian trade, the pair's lowest since June 13; the pair subsequently consolidated at 0.8667, edging down 0.10%.
 
The pair was likely to find support at 0.8606, the low of June 12 and resistance at 0.8710, the high of May 7.
 
Market sentiment remained under pressure as concerns over the ongoing Sunni insurgency in Iraq fuelled fears over the impact of higher oil prices on global economic growth.
 
Meanwhile, the greenback found some support after data on Monday showed that manufacturing activity in New York state expanded more quickly than forecast in June, while a separate report showed that industrial production rose more-than-expected in May

AUD/USD drops after RBA minutes
The Australian dollar dropped against its U.S. counterpart on Tuesday, as comments by the Reserve Bank of Australia weighed and as concerns over ongoing violence in Iraq persisted.

AUD/USD hit 0.9349 during late Asian trade, the pair's lowest since June 10; the pair subsequently consolidated at 0.9357, declining 0.46%.
 
The pair was likely to find support at 0.9258, the low of June 5 and resistance at 0.9425, the high of June 13.
 
In the minutes of its June policy meeting, the RBA said that it is hard to gauge how much low interest rates will offset a drop in mining investment and tighter fiscal policy, adding that the currency was providing less assistance to rebalancing growth.

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