Forex - Euro touches session lows vs. dollar

The euro touched session lows against the dollar on Thursday after data showed that industrial production in the euro zone fell unexpectedly in October.

EUR/USD hit session lows of 1.3742 and was last down 0.08% to 1.3773.

The pair was likely to find support at 1.3739, Wednesday’s low and resistance at 1.3809, Wednesday’s high and a six week high.

Eurostat said industrial production in the euro area fell by 1.1% in October from a month earlier. Economists had forecast an increase of 0.3%.

Production in September was revised to a 0.2% decline, compared to a previously reported drop of 0.5%.

On a year-on-year basis, production was up by just 0.2%, below expectations for a 1.1% gain and after rising at a rate of 0.2% in the preceding month. 

The report said the decline in production was driven by a 2.4% drop in production of durable consumer goods, and a 4% decline in energy production.

The euro’s losses were held in check as expectations for further monetary easing by the European Central Bank dimmed after the left monetary policy unchanged at its meeting this month, following a surprise rate cut in November. 

Demand for the dollar continued to be underpinned by mounting expectations that the Federal Reserve could start to scale back stimulus measures at its upcoming policy meeting next week.

The dollar was boosted by expectations that an agreement on a two year U.S. budget deal would prompt the Fed to begin tapering its USD85 billion a month asset purchase program at its policy meeting scheduled for December 17 - 18.

Elsewhere, the euro trimmed gains against the yen and the Swiss franc.
EUR/JPY was up 0.25% to 141.55, off session highs of 141.93, but still close to Tuesday’s five year peaks of 142.15.

EUR/CHF was last up just 0.03% to 1.2223, after rising to session highs of 1.2245 earlier when the Swiss National Bank said it was maintaining the minimum exchange rate on the franc at 1.20 per euro and its benchmark interest rate unchanged at zero, after its final policy meeting of the year. 

The Swiss franc is “still high” the SNB said
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Silver off more than 2% ahead of U.S. retail sales, jobless data

Silver prices fell sharply on Thursday, as investors looked ahead to U.S. retail sales and jobless claims data due later in the day to further gauge the strength of the economy and the need for stimulus.


On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.93 a troy ounce during European morning trade, down 2.1%. Comex silver prices traded in a range between USD19.90 a troy ounce and USD20.34.

Futures were likely to find support at USD19.74 a troy ounce, the low from December 10 and resistance at USD20.48, the high from December 11.

The March contract rallied to USD20.48 a troy ounce on Wednesday, the highest since November 20, before trimming gains to settle at USD20.35, up 0.2%.

Speculation that the Federal Reserve will start to taper its USD85-billion-a-month bond-buying program at next week’s policy meeting mounted after a bipartisan budget deal from Congress eliminated the possibility of a potential U.S. government shutdown, which was scheduled to start on January 15.

The Fed is scheduled to meet December 17-18 to review the economy and assess monetary policy.

Silver is down approximately 34% this year as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.

Elsewhere on the Comex, gold for February delivery tumbled 1.2% to trade at USD1,241.80 a troy ounce, while copper for March delivery inched up 0.05% to trade at USD3.297 a pound.

Copper traders awaited updates from China’s annual Central Economic Work Conference, which began on Tuesday, where policymakers will set economic growth targets and policy priorities for 2014.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year
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Euro zone industrial production drops 1.1% in October

Industrial production in the euro zone fell unexpectedly in October, underlining concerns over the outlook for economic growth in the single currency bloc, official data showed on Thursday.

In a report, Eurostat, the European statistics agency said industrial production dropped by a seasonally adjusted 1.1% in October, disappointing expectations for a 0.3% increase.

Industrial production in September was revised to a 0.2% decline, compared to a previously reported drop of 0.5%.

Year-on-year, industrial production increased at an annualized rate of 0.2% in October from a year earlier, below expectations for a 1.1% gain and after rising at a rate of 0.2% in the preceding month. 

Following the release of that data, the euro was lower against the U.S. dollar, with EUR/USD easing down 0.13% to trade at 1.3767.

Meanwhile, European stock markets remained lower. The EURO STOXX 50 fell 0.2%, France’s CAC 40 dipped 0.1%, Germany's DAX inched down 0.45%, while London’s FTSE 100 dropped 0.6%.
 

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U.S. oil futures fluctuate ahead of retail sales data

 U.S. oil futures swung between small gains and losses on Thursday, as investors looked ahead to key U.S. economic data later in the day to further gauge the strength of the economy and the need for stimulus.

The U.S. is to produce data on retail sales as well as the weekly report on initial jobless claims.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in January traded at USD97.51 a barrel during European morning trade, up 0.1%. New York-traded oil futures traded in a range between USD97.32 a barrel and USD97.61 a barrel.

Nymex oil futures were likely to find support at USD96.31 a barrel, the low from December 4 and resistance at USD98.75 a barrel, the high from December 11.

The January contract rose to USD98.75 a barrel on Wednesday, the highest since October 22, before turning lower to settle down 1.09% at USD97.44 a barrel.

Oil futures came under pressure on Wednesday after a bipartisan budget deal from Congress raised expectations that the Federal Reserve could start to taper its bond-buying program at next week's policy meeting.

The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy.

Also Wednesday, the U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 10.6 million barrels to 375.2 million last week.

The report also showed that total motor gasoline inventories increased by 6.7 million barrels, compared to expectations for a gain of 1.8 million barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for January delivery inched down 0.1% to trade at USD109.60 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD12.09 a barrel.

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European stocks decline in cautious trade; Dax down 0.50%

 - European stocks declined on Thursday, as investors remained cautious amid lower expectations for further easing measures by the European Central Bank. 

During European morning trade, the EURO STOXX 50 slid 0.32%, France’s CAC 40 fell 0.18%, while Germany’s DAX 30 dropped 0.50%. 

European equities remained under pressure as expectations for further monetary easing by the ECB dimmed after the bank left monetary policy unchanged at its meeting this month, following a surprise rate cut in November. 

Elsewhere, news that U.S. Congressional leaders reached an agreement on a two year budget deal was seen as increasing the likelihood that the Federal Reserve would begin to scale back its USD85 billion a month asset purchase program at next week’s policy meeting. 

Financial stocks were mostly lower, as BNP Paribas rose 0.19% and Societe Generale slipped 0.11% in France, while Germany's Deutsche Bank dropped 0.51%. 

Among peripheral lenders, Spanish banks BBVA and Banco Santander declined 0.16% and 0.41% respectively, while Italy's Unicredit and Intesa Sanpaolo retreated 0.43% and 0.57%. 

French car maker Peugeot plummeted 5.22% after saying it is studying the potential for a capital increase and partnerships. 

On the upside, Fortum Oyj surged 5.52% after the electricity provider said it will sell its Finnish power-distribution business for EUR2.55 billion. 

In London, FTSE 100 shed 0.48%, weighed by losses in the financial sector. 

Shares in Barclays slipped 0.17% and Lloyds Banking retreated 0.48%, while the Royal Bank of Scotland tumbled 1.33%. HSBC Holdings overperformed however, up 0.30%. 

Meanwhile, mining stocks were mixed as Rio Tinto rose 0.31% and Glencore Xstrata added 0.27%, while Vedanta Resources and Randgold Resources lost 0.92% and 2.21% respectively. 

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.03% slip, S&P 500 futures signaled a 0.01% dip, while the Nasdaq 100 futures indicated a 0.02% gain. 

Later in the day, the ECB was to publish its monthly bulletin, while the euro zone was to release data on industrial production. 

The U.S. was to produce data on retail sales, as well as the weekly report on initial jobless claims
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