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[LF.Anastasia]

AUD: Australian Dollar started this week with decline

At the Forex currency market the Australian Dollar rate is declining slightly on Monday due to uncertainty in investors’ sentiments at the global capital markets.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, it goes up, giving a sell signal. Stochastic Oscillator has reached overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0820 the pair will go to 1.0835 and 1.0850.

If upward breakdown does not take place, the pair will consolidate close to the current levels.It became known today that PPI index in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1.This week investors expect publication of the CPI index in Q2 on Wednesday and also the data on the volume of lending in the private sector on Friday.It was made public last week that business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points.

At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points). According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain.It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%.

As it became known earlier leading indicator in Australia fell by 0.3 points in June, to the level of 279.5 points, as per Westpac estimates. Import price index in Australia rose by 0.8% in Q2 against the forecast of -1.1%. At the same time, export price increased by 6.0% in Q2 against the forecast of +4.5%. Growth in exports last quarter was attributed largely due to the rise in exports of lubricants, mineral oil and also related materials.

 

[LF.Anastasia]

CAD: Canadian Dollar weakens at the beginning of the week

At the Forex currency market the Canadian Dollar rate weakens on Monday, pressured by the lack of decision on the public debt of the U.S.

Forex forecast: MACD indicator is moving in the negative area for the pair USD/CAD and goes down, maintaining a pair sell signal. Stochastic Oscillator is coming out of the oversold zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9525, the pair will go to 0.9540 and 0.9560. If upward breakdown does not take place, the pair will consolidate near the current level.

According to the data released on Friday CPI in Canada decreased by 0.7% m/m (+3.1% y/y) in June. It became a negative signal for the CAD..

In addition, retail sales increased by 0.1% in May against the growth of 0.3% in April.

Balance of current account in Canada was at the level of –CAD $8.92 billion in QI against the level of CAD$10.28 billion in Q4 last year. In addition, real GDP of basic prices increased by 0.3% (+2.8% y/y) in QI against revised level of -0.1 % m/m in February.

It became known earlier that sale of new cars in Canada fell by 6.1% m/m in May against preliminary forecast of -1.1% m/m.

The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy.

Earlier, the Bank of Canada left interest rate at the previous level of 1.0%, which agreed with the forecast.

According to the follow-up comments of the regulator, certain monetary incentives can be phased out in the nearest future and current level of inflation, which is about 3.7%, is assessed as temporary. At the same time, global inflationary pressure is obviously growing. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

The Bank of Canada believes that GDP of the country will account to 2.8% in 2011 (reduction by 0.1% versus forecast of April); and it will be: 2.6% in 2012 and 2.1% in 2013. According to the Bank evaluation, export performance in Canada is negative, because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation more complicated. The growth in the interest rate in Canada will directly depend on stability in the economic development.

 

[Bravo458]

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[LF.Anastasia]

EUR/USD: Euro grows taking advantage of the USD weakness

The pair EUR/USD is growing steadily at the Forex currency market on Tuesday because yesterday, the U.S. President Obama warned once again about possibility of default. By 9.15 Moscow time the Euro is at 1.4483 against yesterday’s closing level of 1.4376.

Last night the president of the U.S. Barack Obama stated that since negotiations on the budget between Republicans and Democrats has not progressed, it can result in default. Obama continues to call politicians for compromise, because the deadline of making decision, the 2nd of August is coming closer.

Amid this situation, the Euro has received support and is growing to 1.45.The day is going to be eventful in terms of macro-statistics today; most of it will be from the U.S. and will be released after 16:30 Moscow time.Most likely the pair EUR/USD will not go beyond the range of 1.4400-1.4550 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound reverted to growth

At the Forex currency market the British Pound Sterling rate is growing on Tuesday morningб taking advantage of the USD weakness. As long as the decision on the size of the public debt has not adopted, the USD will be under pressure and will give a chance to other currencies to grow.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, and is going up, giving a buy signal. Stochastic Oscillator remains in the overbought zone, maintaining a buy signal.

Forex recommendations: in case of break down at the level of 1.6360, the pair will go to к 1.6375 and 1.6400.

If upward breakdown does not take place the pair will consolidate at the current levels. Economic situation in the UK has not changed significantly.Important news is going to be released today: this will be the data on the country’s GDP in Q2.

The Pound will react sensitively to any deviation from the forecast.The minutes of meeting of the Bank of England, which were made public earlier indicates that MPC ranks are still suffering from the split: Will and Dale continue to vote for the rate increase by 25 basis points. In general, most members of the Monetary Committee believes it is very unlikely that tightening of the monetary policy can take place in the short term, moreover, there is an opinion that most likely economic weakness will last longer than expected.Moody’s believe that the UK DGP will rise by 1.6% this year; in 2012 – by 2.1%; while the growth in 2010 had been by 1.3%.

At the same time unemployment rate will vary in the range of 7.8-8.0%. The forecast of the agency is based on the belief that the Bank of England will raise interest rate by 25 basis points before the end of this year and by another 1% -over the next year.Earlier the Pound received momentum for growth: retail sales increased by 0.7% m/m (0.4% y/y) in June against the forecast of reduction by 0.1% m/m. This was the fact that inspired players to start purchase. In addition, net volume of public borrowing PSNB amounted to 11.977 billion pounds in June against the forecast of 10.4 billion pounds.

The report which was made public last week showed that CPI in Great Britain fell by 0.1% m/m (4.2% y/y) in June versus the forecast of growth by 0.2% m/m. In addition, overall trade balance in the UK amounted to -stg4.06 billion in May against the forecast of stg2.700 billion. It seems that the rise of imports in May triggered the growth of deficit in trade balance of the country. According to the data released earlier, unemployment rate in the UK amounted to 7.7% in March-May, level of unemployed reduced by 26 thousand within the same period. The level of unemployed rose by 24 thousand in June, while unemployment rate amounted to 4.7%.

 

[LF.Anastasia]

CHF: Swiss Franc has shifted historic highs

At the Forex currency market Swiss Franc rate has reached new historic highs once again on Tuesday morning, taking advantage of ongoing uncertainty in the issue of public debt size in the USA.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, giving a sell signal; volumes are increasing. Stochastic Oscillator is going down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8000, the pair USD/CHF will go to 0.7990 and 0.7975.

The rise in the Franc was caused by high level of uncertainty in the U.S. budget issues and lack of decision on the limits of the public debts.According to authorities’ evaluation, Swiss National Bank is solely responsible for the course of monetary policy and in the nearest future it is likely to adopt new, effective measures to achieve price stability.

The data released earlier showed that trade balance in Switzerland totaled +1.74 billion francs in June against preliminary revised level of +3.25 billion francs.Three- month Libor rate remains in the previous range of 0-0,75% with a tendency to 0.25%. At the same time, the SNB said that GDP growth would amount to 2% this year. Inflation in 2011 is predicted at around +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013: +1.7% (previously +2.0%).

Representatives of Swiss government noted earlier that national economy is still in good shape despite strengthening of the national currency. As the same time, first signs of cooling in the export sector could be observed and if these symptoms continue to develop, it will have a negative impact on the economy as a whole.Earlier, rating agency Fitch confirmed the ranking of Switzerland at the level of AAA, with a “stable” forecast.According to the representative of Swiss National Bank Mr. Jordan, Switzerland went through the crisis easier than other countries largely, due to its monetary policy and if the country will return to deflation, the CNB knows how to fight it off.

Jordan is concerned, however about recent dynamics of the EUR/CHF, saying that risks will increase when Italy joins the list of the EU problematic countries. On Wednesday investors will await publication on the leading indicators index KOF in July. Economic expectation index ZEW amounted to -58.9 points in July against the level of -24.3 points in June.

 

[LF.Anastasia]

JPY: Japanese Yen goes on testing peaks of March indefatigably

The Japanese Yen rate continues to grow at the Forex currency market on Tuesday morning due to the preservation of high level of uncertainty and weakness of the USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shaping a sell signal; volumes are high. Stochastic Oscillator goes down in the neutral zone, giving a sell signal and tightly approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 78.00, the pair will go to 77.90 and 77.60.

As it became known today, price index for corporate service in Japan rose by 0.3% m/m (-0.7% y/y) in June versus the level of -0.3% in May.On Tuesday morning, Finance Minister Mr. Noda stressed that authorities continue to close monitoring situation with the Yen and one should be prepared to its further growth.

Last week Mr. Noda had already paid attention to the expensive Yen. He noted that the Yen is moving only in one direction lately. He believed that stabilization in Greece would encourage improvement of the general situation in the market.Representative of the Bank of Japan Mr. Yamaguchi said that high rate of the JPY would no effect on the actual state of economy.At the meeting which was held last week, the Bank of Japan decided to leave interest rate unchanged in the target range of 0-0.1% per annum, as expected.Lending program was also left unchanged in the volume of 30 trillion yen.

According to the Bank estimates, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%.Exports in Japan decreased by 1.6% y/y last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.

Trade balance in Japan increased to the level of +Y70.7 billion in June against the forecast of -Y149.0 billion; therefore the balance exceeded limits of the two-month downfall of deficit. It is of interest that starting from this June the Bank of Japan is going to raise its estimate for economic growth in the country, as the growth in the production volumes has triggered revival of exports, and, at the same time, private demand is also growing.

 

[LF.Anastasia]

AUD: Australian Dollar continues to soar up

At the Forex currency market the Australian Dollar rate continues to soar up, taking advantage of opportunity while the USD remains under pressure.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, it goes up, giving a buy signal. Stochastic Oscillator has reached overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0930 the pair will go to 1.0945 and 1.0960.

If upward breakdown does not take place, the pair will consolidate close o the current levels.It became known today that leading indicators index Conference Board fell by 0.1% m/m in May against the growth of 0.1% in April. The main driver for the growth of the AUD is weakness of the USD today.PPI index in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1It was made public last week that business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points.

At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points). According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain.It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%.

As it became known earlier leading indicator in Australia fell by 0.3 points in June, to the level of 279.5 points, as per Westpac estimates. Import price index in Australia rose by 0.8% in Q2 against the forecast of -1.1%. At the same time, export price increased by 6.0% in Q2 against the forecast of +4.5%. Growth in exports last quarter was attributed largely due to the rise in exports of lubricants, mineral oil and also related materials.

This week investors will be waiting for the publication of the CPI index in Q2 on Wednesday and also the data on the volume of lending in the private sector on Friday.

 

[LF.Anastasia]

NZD: New Zealand Dollar conquers new peaks

At the Forex currency market the New Zealand Dollar rate continues to grow steadily, due to preservation of the USD weakness.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal; volumes are high. Stochastic Oscillator remains in the overbought zone; however, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8720, the pair will go to 0.8755 and 0.8780. The pair could drop to 0.8600 as part of correction.

According to statistics released on Tuesday, trade balance in New Zealand increased by NZ$230 billion in June against the forecast of NZ$400 billion. Slowdown in surplus was logical in June: volume of growth rate in imports and exports fell last month. Thus exports increased by 4.5% in Q2, to NZ$12.2 billion; imports dropped by 1%, to the level of NZ$11.8 billion.

Exports to China and Australia fell sequentially: to +1.3% y/y (+24.2% y/y earlier) and 1.2% y/y (+4.7% y/y earlier) respectively.

CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand.

Statistics released earlier showed that GDP in New Zealand rose by 0.8% on quarterly basis (+1.4% y/y) in Q1 against the forecast of growth by 0.3% q/q (+0.5% y/y). The indices have been very favourable, which supports the NZD. It is possible that the data will be less positive in Q2; however in general, the trend will remain the same, which is favourable for the pair NZD/USD in the long term.

It became known earlier that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.

There is speculation in the market that the Reserve Bank of New Zealand is looking closely at market’s reaction to the measures to resolve debt crisis in Europe which might imply a disposition to raise the level of the interest rate at the meeting next week. Net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast. According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.

 

[LF.Anastasia]

EUR/USD: Euro remains strong in the middle of the week

The pair EUR/USD continues to grow at the Forex currency market on Wednesday and is traded above the level of 1.45.By 9.05 Moscow time the Euro is at 1.4519 against yesterday’s closing level of 1.4509.The reason for preservation of long positions in the major pair has been the same as previously: that is the lack of decision on the U.S. public debt.

Authorities and Congress fail to come to agreement so far, and Republicans are going to revise a plan to reduce budget deficit, although the influence of this party is decreasing. U.S. President Barack Obama threatened to veto the revised plan which proposed budgetary spending cuts of $3 trillion in the next 10 years.

There are not going to be publications of important statistics from Eurozone today; interesting data will come from the U.S.Most likely the pair EUR/USD will not go beyond the range of 1.4450-1.4550 at the trading session on Wednesday.