Forex - USD/JPY slightly higher after trade balance data

The U.S. dollar traded slightly higher against the Japanese yen during Wednesday’s Asian session following the release of June trade data out of Japan, the world’s third-largest economy, 

In Asian trading Wednesday, USD/JPY rose 0.09% to 99.54. The pair was likely to find support at 98.88, the low of July 16 and resistance at 100.61, Monday’s high. 

Earlier Wednesday, data showed Japan’s trade balance was in deficit for a 12th consecutive month. Japanese exports rose 7.4% last month, but that was below the 10.3% increase analysts expected. 

However, the weak yen is also increasing the cost of energy imports to resource-starved Japan, leading to another trade deficit. Still, first-quarter data showed Japan was the fastest growing major economy in the world. 

Exports to China rose 4.8% while exports to the U.S. surged 14.6% compared with 16.3% in May, according to the data. China and the U.S. are Japan’s two largest export markets. Imports rose 11.8%, but that was below the 13.6% increase analysts expected. Japan’s overall trade deficit was JPY180.8 billion. Analysts expected a deficit of JPY160.6 billion. 

Traders will now turn their attention to China’s PMI reading, due out later in the Asian session. The number is HSBC's flash estimate of its China July. Last month, the HSBC PMI fell to a nine-month low of 48.2. Readings below 50 indicate contraction. 

Elsewhere, NZD/JPY rose 0.15% to 79.66 after New Zealand reported a June trade surplus of NZD414 million, far better than the NZD100 million analysts expected. 

AUD/JPY added 0.15% to 92.58 while EUR/JPY inched up 0.05% to 131.59.

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Forex - Euro slips lower as dollar firms up

The euro edged lower against the firmer dollar in quiet trade on Tuesday as trade volumes in foreign exchange markets remained low due to the summer holidays.

EUR/USD hit 1.3163 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3180, dipping 0.06%.

The pair was likely to find support at 1.3133, Monday’s low and resistance at 1.3253, the high of June 21.

The dollar was broadly lower earlier in the day after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs.

Demand for the euro continued to be underpinned after Portugal’s Prime Minister Pedro Passos Coelho said Monday the current government will remain in office after political leaders resolved a deadlock that had threatened to derail the country's EUR78 billion bailout program.

The euro edged higher against the pound, with EUR/GBP rising 0.10% to 0.8594 and advanced against the yen, with EUR/JPY up 0.38% to 131.93.

Earlier Tuesday, Japan’s government upgraded its view of the economy for the third consecutive month in July, saying "areas of self-sustaining recovery can be observed."

In its monthly economic report, the government also said consumer prices are “leveling off," indicating that deflation is abating.

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U.S. futures higher, Apple to report earnings; Dow Jones up 0.20%

U.S. stock futures pointed to a higher open on Tuesday, after disappointing U.S. housing sector data on Monday dampened expectations for a near-term end to the Federal Reserve's stimulus program, while markets eyed the release of fresh earnings reports. 

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.20% gain, S&P 500 futures signaled a 0.23% rise, while the Nasdaq 100 futures indicated a 0.29% increase. 

Global equities gained ground after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Fed will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs. 

Internet-linked stocks were expected to be active, after Netflix said it added 630,000 new U.S. customers for its Internet TV service in the second quarter, fewer than the average analyst projection of 700,000, sending shares tumbling 5.33% in pre-market trade. 

CapitalSource was also likely to be in focus, as PacWest said it agreed to buy the lender in a deal that will create California’s eighth-biggest commercial bank. 

CapitalSource investors will reportedly get about USD11.64 a share in PacWest stock and cash, according to a joint statement. 

In the tech sector, Texas Instruments rallied 1.95% in early trading, after the chipmaker forecast third-quarter sales of USD3.09 billion to USD3.35 billion, compared to analysts' estimates of USD3.2 billion. 

Other stocks expected to be in focus included Apple, DuPont, Travelers and United Tech, scheduled to post second quarter results later in the day. 

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 climbed 0.42%, France’s CAC 40 added 0.15%, Germany's DAX edged up 0.12%, while Britain's FTSE 100 rose 0.23%. 

During the Asian trading session, Hong Kong's Hang Seng Index surged 2.33%, while Japan’s Nikkei 225 Index advanced 0.82%. 

Trade remained subdued as volumes in foreign exchange markets were lower due to the summer holidays.

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Forex - USD/CHF higher in subdued trade

The U.S. dollar was higher against the Swiss franc in subdued trade on Tuesday, although gains were limited by Monday's disappointing U.S. housing sector data. 

USD/CHF hit 0.9389 during European morning trade, the session high; the pair subsequently consolidated at 0.9396, gaining 0.37%. 

The pair was likely to find support at 0.9345, the low of June 26 and resistance at 0.9462, the high of July 19. 

The greenback remained under pressure after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs. 

Trade remained subdued as volumes in foreign exchange markets were lower due to the summer holidays. 

The Swissie was lower against the euro with EUR/CHF edging up 0.22%, to hit 1.2373. 

The single currency remained supported after Portugal’s Prime Minister Pedro Passos Coelho said Monday the current government will remain in office after political leaders resolved a deadlock that had threatened to derail the country's EUR78 billion bailout program.

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Dollar steady in thin trade

The dollar was steady against the other major currencies on Tuesday as trade volumes in foreign exchange markets remained low due to the summer holidays.

During European morning trade, the dollar was almost unchanged against the yen, with USD/JPY dipping 0.01% to trade at 99.64, after falling to lows of 99.15 earlier in the session.

The dollar had been lower during the Asian session after data on Monday showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs.

In Japan, the government upgraded its assessment of the economy for the third consecutive month in July, saying "areas of self-sustaining recovery can be observed."

In its monthly economic report, the government also said consumer prices are “leveling off," indicating that deflation is abating.

The dollar edged higher against the euro, with EUR/USD inching down 0.05% to 1.3179.

The single currency remained supported after Portugal’s Prime Minister Pedro Passos Coelho said Monday the current government will remain in office after political leaders resolved a deadlock that had threatened to derail the country's EUR78 billion bailout program.

Elsewhere, the dollar was fractionally higher against the pound, withGBP/USD slipping 0.07% to 1.5347 and gained ground against the Swiss franc, with USD/CHF climbing 0.25% to 0.9385. 

The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD inching up 0.01% to 0.9248,NZD/USD up 0.17% to 0.7984 and USD/CAD edging up 0.09% to trade at 1.0341.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% to 82.39. 

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Silver futures down 1% on profit taking after Monday’s rally

Silver futures were lower on Tuesday, as investors cashed out of the market to lock in gains following Monday’s big rally that took prices to a five-week high .

Sentiment remained supported amid easing concerns over the possibility the Federal Reserve will begin to taper its bond-buying program in the near future.

Moves in the silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, silver futures for September delivery traded at USD20.29 a troy ounce during European morning trade, down 1% on the day.

Comex silver prices fell by as much as 1.4% earlier in the session to hit a daily low of USD20.21 a troy ounce.

Silver prices were likely to find support at USD19.29 a troy ounce, the low from July 19 and resistance at USD21.23, the high from June 20.

Silver surged more than 3% on Monday to hit USD20.57 a troy ounce, the strongest level since June 20, as the U.S. dollar weakened broadly after data showed that U.S. existing home sales fell unexpectedly in June.

Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U.S. economic health.

Sentiment on the precious metal has been upbeat ever since comments by Fed Chairman Ben Bernanke last week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.

Bernanke said that the pace of the central bank’s bond purchases are not a “preset course”.

The Fed chief reiterated that the central bank will continue to maintain its accommodative monetary policy for the foreseeable future.

Silver prices are on track to post a loss of almost 34% on the year, amid speculation the Fed will start to unwind its bond purchasing program in the coming months.

Elsewhere on the Comex, gold for August delivery shed 0.4% to trade at USD1,330.65 a troy ounce, while copper for September delivery declined 0.6% to trade at USD3.167 a pound.

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Forex - Pound steady vs. dollar in subdued trade

The pound was steady against the dollar in quiet trade on Tuesday as the greenback remained under pressure following Monday’s disappointing U.S. housing data.

GBP/USD hit 1.5381 during European morning trade, the session high; the pair subsequently consolidated at 1.5364, inching up 0.04%.

Cable was likely to find support at 1.5256, Monday’s low and resistance at 1.5439, the high of June 26.

The dollar fell to almost one-month lows against sterling on Monday after data showing that existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs.

Trade remained subdued as volumes in foreign exchange markets were lower due to the summer holidays.

Sterling was little changed against the euro, with EUR/GBP edging up 0.035 to 0.8588.

The euro remained supported after Portugal’s Prime Minister Pedro Passos Coelho said Monday the current government will remain in office after political leaders resolved a deadlock that had threatened to derail the country's EUR78 billion bailout program.

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European stocks higher in thin trade; Dax up 0.36%

European stocks were higher in thin trade on Tuesday, after disappointing U.S. housing sector data on Monday dampened expectations for a near-term end to the Federal Reserve's stimulus program, while comments by Portugal's Prime minister continued to support 

During European morning trade, the EURO STOXX 50 climbed 0.57%, France’s CAC 40 added 0.33%, while Germany’s DAX 30 rose 0.36%. 

Global equities gained ground after the U.S. National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs. 

Meanwhile, European stocks also found support after Portugal’s Prime Minister Pedro Passos Coelho said Monday the current government will remain in office after political leaders resolved a deadlock that had threatened to derail the country's EUR78 billion bailout program. 

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale climbed 0.93% and 1.40%, while Germany's Deutsche Bank advanced 0.61%. 

Peripheral lenders added to gains, with Spanish banks Banco Santander and BBVA jumping 1.41% and 2% respectively, while Italy's Unicredit and Intesa Sanpaolo rallied 1.46% and 1.47%. 

Elsewhere, French company Vivendi surged 2.80% as it entered exclusive talks to sell its stake in Moroccan mobile operator Maroc Telecom to Emirates Telecommunications for EUR4.2 billion in order to sharpen its focus on media. 

Also in company news, Telefonica's German unit agreed to buy Royal KPN's E-Plus mobile-phone business for EUR5 billion in cash and a stake in the combined entity to add users in the country and reduce costs. Shares in Telefonica gained 2.69% following the news. 

In London, commodity-heavy FTSE 100 climbed 0.49%, supported by gains in the mining sector. 

Mining giants Rio Tinto and BHP Billiton jumped 0.95% and 1.91% respectively, while rivals Evraz and Anglo American rallied 2.47% and 2.70%. 

Meanwhile, financial stocks were also mostly higher, as HSBC Holdings advanced 0.90% and Barclays jumped 0.92%, while the Royal Bank of Scotland rallied 1.10%. Lloyds Banking underperformed on the other hand, slipping 0.14%. 

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.25% gain, S&P 500 futures signaled a 0.25% rise, while the Nasdaq 100 futures indicated a 0.29% increase. 

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Gold futures little changed after Monday’s big rally

Gold futures were little changed in rangebound trade on Tuesday, amid speculation the Federal Reserve won't alter its aggressive monetary easing until it is convinced the economy's gains can be sustained.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,332.35 a troy ounce during European morning hours, down 0.25% on the day.

Comex gold prices held in a range between USD1,328.35 a troy ounce, the daily low and a session high of USD1,337.65 a troy ounce.

Gold futures were likely to find support at USD1,269.45 a troy ounce, the low from July 17 and resistance at USD1,347.45, the high from June 20.

Comex gold surged 2% on Monday to hit a one-month high of USD1,338.45 a troy ounce, as a bout of technical buying kicked in after prices broke above a key resistance level.

A broadly weaker U.S. dollar also contributed to gains, following the release of disappointing U.S. housing sector data on Monday.

The dollar index fell sharply after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U.S. economic health.

Sentiment on the precious metal has been upbeat ever since comments by Fed Chairman Ben Bernanke last week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.

Bernanke said that the pace of the central bank’s bond purchases are not a “preset course”.

The Fed chief reiterated that the central bank will continue to maintain its accommodative monetary policy for the foreseeable future.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

The precious metal is on track to post a loss of 20% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies. 

Elsewhere on the Comex, silver for September delivery fell 1% to trade at USD20.30 a troy ounce, while copper for September delivery shed 0.3% to trade at USD3.176 a pound.

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Forex - Dollar remains lower vs. yen

The dollar fell to an almost one week low against the yen on Tuesday, before trimming back losses, but remained under pressure following disappointing U.S. housing data on Monday.

USD/JPY pulled back from 99.15, the pair’s lowest since July 17, to hit 99.50 during late Asian trade, still down 0.16%.

The pair was likely to find support at 98.88, the low of July 16 and resistance at 100.61, Monday’s high.

The dollar came under pressure after data showing that U.S. existing home sales fell unexpectedly in June dampened expectations that the Federal Reserve will start scaling back its asset purchase program this year.

The National Association of Realtors said that existing home sales fell 1.2% to an annual rate of 5.08 million units in June, but still remained close to three-and-a-half year highs.

In Japan, the government upgraded its assessment of the economy for the third consecutive month in July, saying "areas of self-sustaining recovery can be observed."

In its monthly economic report, the government also said consumer prices are “leveling off," indicating that deflation is abating.

The yen was slightly higher against the euro, with EUR/JPY slipping 0.16% to 131.19.

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