Currency This Week 12 MONTHS Comment AUD/USD NEUTRAL BEARISH EUR/USD NEUTRAL BEARISH GBP/USD BULLISH BEARISH NZD/USD BULLISH BULLISH USD/RMB BEARISH NEUTRAL USD/CAD NEUTRAL BULLISH USD/JPY BULLISH BEARISH Australia housing market data posted better than expected, plus the market was soothed about worries the Fed to speed up the tapering. AUD/USD was up to above 0.90 and was hovering at 0.8820-0.9150. Investors may consider selling AUD around 0.9150 for profit or buying on dips around 0.8820 ECB governor believes there was no widespread problem of deflation in the Eurozone. EUR/USD was consolidating around 1.35-1.38 in the near term. Investors may consider selling EUR for profit in bathes around 1.37-1.38 levels or buying on dips around 1.35. GBP was pressured due to profit-selling activities, investors could buy GBP on dips around 1.63 if needed. New Zealand Q4 Business Confidence posted better than expected. NZD/USD rose and was hovering at 0.8120-0.8410 in the near term. Investors may consider buying NZD on dips around 0.8120-0.8160 and waiting for RBNZ's signal to raise interest rate. China on-shore and off-shore RMBs both reached the new high after the exchange reform in 2005. Investors may consider buying RMB in batches. CAD had a technical rebound, USD/CAD may form a near term trading range of 1.06-1.0950, investors may consider range trading. Market was soothed worries the Fed to speed up the tapering, US treasury yields continue to weaken and dragged down USD/JPY. USD/JPY was hovering at 102.50-105.50 in the near term. Investors who bought JPY above 105 may consider selling around 102.50-80. USD/CHF NEUTRAL BULLISH USD/SGD NEUTRAL NEUTRAL Market's doubt on Fed speeding up the pace of tapering cooled down is favorable to the emerging markets. USD/SGD fell back with near term trading range at 1.26 1.2760. Investors who bought SGD above 1.27 may consider selling at 1.26 for profit. AUD NEUTRAL Australia housing market data posted better than expected, plus the market was soothed about worries the Fed to speed up the tapering. AUD/USD was up to above 0.90 and was hovering at 0.8820-0.9150. 14-Jan vs SGD 1.1450 vs USD 0.9050 Daily change: 0.74% Support*: 1.1270 vs USD 0.8893 Resistance*: 1.1560 vs USD 0.9149 (+) Australia Nov trade balance at -AUD 118 million, better than market expectations (~) Australia Nov unemployment rate at 5.8%, as expected (-) Australia Q3 GDP at 2.3% yoy, lower than expected (~) RBA kept interest rate at 2.50% in Dec as expected AUD/SGD 6-month
EUR NEUTRAL ECB governor believes there was no widespread problem of deflation in the Eurozone. EUR/USD was consolidating around 1.35-1.38 in the near term. Investors may consider selling EUR for profit in bathes 14-Jan vs SGD 1.7290 vs USD 1.3670 Daily change: 0.12% Support*: 1.7120 vs USD 1.3515 Resistance*: 1.7530 vs USD 1.3860 (+) German December unemployment change reduced 15K, better than market expectations (~) Eurozone 2013 third quarter GDP final reading is -0.4%, less than expected (+) Eurozone Dec PMI composite increased to 52.1, higher than market expectations (~) ECB kept rate unchanged at 0.25% in Jan 1.80 1.70 EUR/SGD 6-month 1.60 1.50 GBP BULLISH GBP was pressured due to profit-selling activities, investors could buy GBP on dips around 1.63 if needed. 14-Jan vs SGD 2.0720 vs USD 1.6380 Daily change: -0.50% Support*: 2.0570 vs USD 1.6273 Resistance*: 2.0940 vs USD 1.6547 (+) UK Q3 final GDP at 1.9%, higher than expected (-)UK Nov retail sales increased 2.0% yoy, less than expected (~) UK Nov manufacturing production increased by 2.70%, less than expected (~) BOE kept interest rate and asset purchase target unchanged in Jan GBP/SGD 6-month 2.20 2.00 1.80 NZD BULLISH New Zealand Q4 Business Confidence posted better than expected. NZD/USD rose and was hovering at 0.8120-0.8410 in the near term. Investors may consider buying NZD on dips around 0.8120-0.8160 and 14-Jan vs SGD 1.0590 vs USD 0.8380 Daily change: % Support*: 1.0390 vs USD 0.8197 Resistance*: 1.0700 vs USD 0.8471 (~) New Zealand Q3 GDP increased 3.5% yoy, higher than expected (~) RBNZ kept rate unchanged at 2.5% in Dec (+) New Zealand Q3 employment increased 1.2% qoq, higher than market expectations (+) New Zealand Sep trade balance at -199 mio, higher than expected NZD/SGD 6-month 1.05 0.95 0.90
RMB BULLISH China on-shore and off-shore RMBs both reached the new high after the exchange reform in 2005. Investors may consider buying RMB in batches. 14-Jan vs SGD 0.2090 vs USD 6.0430 Daily change: 0.24% Support*: 0.2080 vs USD 6.0311 Resistance*: 0.2100 vs USD 6.0650 (+) China Nov trade balance at $33.8 B, higher than market expectations (-) China Dec HSBC Manufacturing PMI at 50.5, lower than market expectations (~) China 3Q GDP at 7.8% yoy, in line with expectation (-) China Dec consumer price index at 2.5% yoy, worse than market expectations RMB/SGD 6-month 0.22 0.21 0.21 0.20 0.20 CAD NEUTRAL CAD had a technical rebound, USD/CAD may form a near term trading range of 1.06-1.0950, investors may consider range trading. 14-Jan vs SGD 1.1640 vs USD 1.0860 Daily change: 0.40% Support*: 1.1480 vs USD 1.0649 Resistance*: 1.1880 vs USD 08 (+) Canada Oct GDP increased 2.7% yoy, higher than market expectations (-) Canada Nov CPI increased 0.9% yoy, lower than expected (+) Canada Dec employment figures raised by 21.6k, higher than expected (~) BOC kept rate unchanged at 1.0% in Dec 1.25 1.15 CAD/SGD 6-month JPY BEARISH Market was soothed worries the Fed to speed up the tapering, US treasury yields continue to weaken and dragged down USD/JPY. USD/JPY was hovering at 102.50-105.50 in the near term. Investors who bought 14-Jan vs SGD 1.2280 vs USD 103.0000 Daily change: 1.21% Support*: 70 vs USD 102.0600 Resistance*: 1.2390 vs USD 104.6700 (~) Japan bank lending 2.4%, lower than expected (~) BOJ kept rate unchanged in Dec (-) Japan Nov trade deficit increased to 1290bn yen (-) Japan Q3 GDP rose1.1% YoY,lower than expected 1.40 JPY/SGD 6-month
CHF NEUTRAL 14-Jan vs SGD 1.4070 vs USD 0.8990 Daily change: 0.51% Support*: 1.3850 vs USD 0.8815 Resistance*: 1.4340 vs USD 0.9145 (-) Switzerland Nov trade balance at 2.11bn, worse than expected (-) Switzerland Oct consumer price index fell by 0.3%yoy, bigger than expected (+) Switzerland Sep trade balance at 2.49 billion, higher than expected (~) SNB kept interest rates unchanged in Dec CHF/SGD 6-month 1.50 1.40 SGD NEUTRAL Market's doubt on Fed speeding up the pace of tapering cooled down is favorable to the emerging markets. USD/SGD fell back with near term trading range at 1.26-1.2760. Investors who bought SGD above 1.27 may 14-Jan vs USD 1.2650 Daily change: 0.09% Support*: vs USD 1.2591 Resistance*: vs USD 1.2719 (+) Singapore Q3 GDP up 5.1% yoy, higher than market expectations (+) Singapore Q3 unemployment rate fell to 1.8% (-) Singapore Sep CPI rose 1.6% yoy, lower than market expectations (+) MAS will continue to target a modest and gradual appreciation of its currency USD/SGD 6-month 1.25
HSBC forecasts 09-Dec-13 Current rate Q1 2014 Q2 2014 Q3 2014 Q4 2014 0 North America US 0-0.25 0-0.25 0-0.25 0-0.25 0-0.25 0.00 Canada 0.00 Asia-pacific Japan 0-0.10 0-0.10 0-0.10 0-0.10 0-0.10 0.00 Australia 2.50 2.50 2.50 2.75 3.00 0.00 New Zealand 2.50 2.75 3.25 3.25 3.50 0.00 Western Europe EMU 0.25 0.25 0.25 0.25 0.25 0.00 UK 0.50 0.50 0.50 0.50 0.50 0.00 *Support Levels are normally defined as where market participants see good value and start to push prices higher again. *Resistance Levels are normally regarded as a ceiling, as the price levels prevent the market from moving prices upward. Please note that the indicative support and resistance level are given for general reference only. Customers should not rely on this information to buy or sell currency. This information is only for a reference and does not represent recommendation from HSBC for customer to buy or sell based on the information provided. Customer should not rely on the views or information expressed in this document solely to make investment decisions. HSBC shall not be held liable for damages arising out of any person s reliance upon this information. Customer should make his/her buy and sell decision based on his/her own view. Also, past performance is not indicative of future performance. ^ Time deposit rates are for reference only and quoted as of 14-1-2014. RMB and exchange rate offers are available at any HSBC branches and through 24-hour manned phonebanking services only. Terms and Conditions apply. Risk Disclosure: Currency conversion risk the value of your RMB deposit will be subject to the risk of exchange rate fluctuation. If you choose to convert your RMB deposit to other currencies at an exchange rate that is less favorable than the exchange rate in which you made your original conversion to RMB, you may suffer loss in principal. RMB is currently not freely convertible and subject to regulatory restrictions. This document is issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC). The information contained herein is derived from sources we believe to be reliable, but which we have not independently verified. HSBC makes no representation or warranty (express or implied) of any nature nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information, projection, representation or warranty (expressed or implied) in, or omission from, this document. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. Any examples given are for the purposes of illustration only. The opinions in this document constitute our present judgement, which is subject to change without notice. The document is intended to be distributed in its entirety. Copyright. The Hongkong and Shanghai Banking Corporation Limited 2012. ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the Hongkong and Shanghai Banking Corporation Limited.