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[LF.Anastasia]

Euro/USD: USD has restored credibility

The pair EUR/USD goes down at the Forex currency market on Monday amid increased credibility in the USD after the news about destruction of the terrorist number one –Usam Bin Laden.

By 9.15 Moscow time the Euro is at 1.4793 against closing session level of 1.4806 on Friday.

It was reported on Monday morning that the U.S. destroyed the number one terrorist Usam Bin Laden. The U.S. President Barack Obama also confirmed this information. Amid such background The USD began to regain losses of the last week.

No important data on Eurozone is going to be released today, except for the index of business activity in industry; the data from U.S. will be released in the afternoon, including index of economic conditions ISM in industry.

Most likely the pair EUR/USD will not go beyond the range of 1.4700-1.4850 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound started new week with decline

At the Forex currency market the British Pound Sterling goes down on Monday, because credibility in the USD is restoring among investors.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is growing, maintaining a pair buy signal. Stochastic Oscillator has begun to decline in the neutral zone, giving an antipodal signal.

Forex recommendations: in case of breakdown at the level of 1.6650 the pair will go to 1.6640 and 1.6625. If breakdown does not take place the par will consolidate close to the current levels.

After the news at the beginning of the week, that the U.S. had destroyed number one terrorist Usam bin Laden, the USD started to restore credibility.
It became known today that level of house prices in the UK has not changed on monthly basis (-3.3% y/y) in April, as per Hometrack estimates. Minutes of the last meeting of the Bank of England released earlier showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still have no intention to start monetary tightening policy.

It is hardly probable that the rate will be raised before July-August this year.

Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.
Statistics released last week showed that GDP in the UK rose by 0.5% on quarterly basis (+1.8% y/y) in QI, which agreed with the forecast and was taken favourably by investors at Forex.

 

[LF.Anastasia]

JPY: Japanese Yen is getting weaker at the beginning of the week

At the Forex currency market the Japanese Yen rate goes down on Monday due to the pressure from the USD.

Forex forecast: MACD indicator for the pair has crossed signal line from top to bottom, indicating that a pair is in sale. Stochastic Oscillator is coming back to the oversold zone, and is not giving a clear signal yet.

Forex recommendations: in case of breakdown at the level of 81.60 the pair will go to 81.80 and further to 82.00. If upward breakdown does not take place, the pair will consolidate close to the current levels.

It became known last week, that the head of the Bank of Japan Mr. Shirakawa said that following the results of quarters I and II, it can be expected that level of GDP will decline due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Japan also considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Earlier the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

As it became known earlier, the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. Japanese data released after that was also mixed: unemployment rate remained at the previous level of 4.6% in March; preliminary data on industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; net CPI decreased by 0.1% y/y in march which became the 25th fact of reduction in a row; household spending decreased by 8.5% y/y in march against the previous decline by 0.2%.

 

[LF.Anastasia]

CHF: Swiss Franc moves away from highs

Swiss Franc rate moves away from highs at the Forex currency market on Monday, while the USD regains the losses amid interest to the American currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, giving a pair sell signal. Stochastic Oscillator tends to come out of the oversold zone, forming a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8700 the pair will go to 0.8915 and 0.8930. If upward breakdown does not take place the pair will consolidate close to the current levels.

The head of the National bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and harms tourism industry and negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician.

According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected.
Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sector is worthy of being noted.
It became known earlier that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.
Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Trade balance in Switzerland decreased to 1.09 billion francs in March against the revised value of 2.38 billion in February; although economists had expected the reduction to 2.1 billion francs, supporters of the Swiss Franc were not deeply vexed.

 

[LF.Anastasia]

AUD: Australian Dollar goes down after reaching highs once again

The Australian Dollar goes down at the Forex currency market on Monday after reaching new highs at 1.1014 and due to the decline in interest to the high -yielding currencies at the beginning of the week.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes up due to high trading volumes, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.1014 the pair will test new highs at 1.1020. If upward breakdown does not take place the pair will consolidate close to the current levels.

According to the data released today house prices in Australia reduced by 1.7% on quarterly basis in QI. Unemployment rate fell to 4.9% in March against preliminary level of 5.0% and employment rate increased to 37.8 thousand last month against the forecast of growth by 24 thousand. Therefore, strong performance in the employment sector helped the AUD to go up, convincing investors that monetary tightening process can resume earlier. In addition deficit of trade balance has been recorded in the country for the first time since spring 2010 (February -А$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

It became known on Wednesday that CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.

Kevin Rood, Minister of Foreign Affairs of Australia said earlier that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.

As it became known earlier, index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.

 

[LF.Anastasia]

CAD: Canadian Dollar moves away from local peaks

At the Forex currency market the Canadian Dollar rate decreases in pairing with the USD on Monday amid investors’ interest in the latter.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator has come into oversold zone today, giving a pair sell signal.

Forex recommendations: correctional movement can lead a pair to 0.9500 и 0.9520. However if upward breakdown does not take place the pair will continue to be traded close to the current levels.

As the data released on Friday showed, Canadian economy unexpectedly decreased in February: GDP fell by 0.2% in February against the growth by 0.5% in January largely due to the decline in the level of industrial output.

The Bank of Canada stated earlier that CPI in the country will begin to rise, as soon as it exceeds expected level. At the same time value of key index of net CPI is also growing, remaining close to the target level of 2%.

Regulator expects that average growth of GDP in Canada will be at the level of 2.9% per annum this year. According to the experts from International Monetary Fund, Canadian economy will grow by 2.3% y/y this year, which is less than the forecast of +2.7% y/y in October.

It became known earlier that retail sales in Canada increased by 0.4% in February against the fall by 0.4% in January. In addition, index of leading indicators in Canada increased by 0.8% in March against 0.8% m/m earlier and wholesales sale fell by 0.6% in February against 1.5% m/m in January.

As for the rate of the Canadian Dollar, IMF believes that if average oil price will remain at about $90 barrels (in October- $79 barrels) CAD will increase, with the help of support from the commodity sector of the country’s economy. Imperial Bank of Commerce reported on the revision of its GDP forecast for QIV 2010 to 2.6% versus the previous level of 2.3%; the Bank expects that this year economic growth will be by 2.6% (2.4 % previously).

 

[LF.Anastasia]

CHF: Swiss Franc maintains positions close to the highs

At the Forex currency market Swiss Franc rate remains close to the historic highs on Tuesday, since investors have not decided on their trading sentiment.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, maintaining a pair sell signal. Stochastic Oscillator remains in the oversold zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8650 the pair will retest highs at 0.8620.

It became known yesterday, that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points.

It also became known that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

The head of the National bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and harms tourism industry, therefore negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician.

According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected.

Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sector is worthy of being noted.

 

[LF.Anastasia]

GBP: British Pound is on sale again

At the Forex currency market the British Pound Sterling rate continues to decline on Tuesday, keeping on the trend of yesterday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is growing, maintaining a pair buy signal. Stochastic Oscillator is going to come out of the overbought zone, starting a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6640 the pair will go to 1.6650 and 1.6670. If the level of 1.6620 is exceeded, the level of 1.6590 will become the target for decline.

The head of the Bank of England Mervyn King believes that the rise in the interest rate can exacerbate problems of national debts. Such statement can be well regarded as support to “dovish” sentiments in the Monetary Committee.

Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.

Statistics released last week showed that GDP in the UK rose by 0.5% on quarterly basis (+1.8% y/y) in QI, which agreed with the forecast and was taken favourably by investors at Forex.

It became known yesterday that level of prices for houses in the UK has not changed on monthly basis (-3.3% y/y) in April, as per Hometrack estimates. Minutes of the last meeting of the Bank of England released earlier showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator has no intention to start monetary tightening policy yet.

It is hardly probable that the rate will be raised before July-August this year.

 

[LF.Anastasia]

Euro/USD: Euro remains in the range

The pair EUR/USD is traded slightly downward at the Forex currency market, being in the range for the past three days.

By 8.40 Moscow time the Euro is at 1.4803 against closing session level of 1.4830 yesterday.

Last night the Euro soared to the peak of December, 2009, to the level of 1.4900, as soon as excitement over destruction of number one terrorist- Usam Bin Laden subsided at the market.

Meanwhile, the Euro Евро is still in the range, since there are no additional drivers for the movement.

Most probably the pair EUR/USD will not go beyond the range of 1.4750-1.4850 at the trading session on Tuesday.

 

[LF.Anastasia]

JPY: Japanese Yen is getting close to highs of March

At the Forex currency market the Japanese Yen rate continues to grow on Tuesday, since the JPY acts as a safe harbor amid uncertainty in the market.

Forex forecast: MACD indicator has crossed the signal line from top to bottom, giving a pair sell signal. Stochastic Oscillator has come back into oversold zone and gives a similar signal.

Forex recommendations: in case of breakdown at the level of 80.85 the pair will go to 80.60 and 80.40.

Markets in Japan are closed today due to the “Gold week”

Japan considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Earlier the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

As it became known earlier, the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. Japanese data released after that was also mixed: unemployment rate remained at the previous level of 4.6% in March; preliminary data on industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; net CPI decreased by 0.1% y/y in march which became the 25th fact of reduction in a row; household spending decreased by 8.5% y/y in march against the previous decline by 0.2%.

Last week it was made public that the head of the Bank of Japan Mr. Shirakawa said that following the results of quarters I and II, it can be expected that level of GDP will decline due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Current growth of the JPY was caused by purely external factors.