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[LF.Anastasia]

NZD: New Zealand Dollar remains strong

At the Forex currency market the New Zealand Dollar rate continues to grow on Thursday.

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, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8750, the pair will go to 0.8765 and 0.8780.

The pair could drop to 0.8600 as part of correction.At the meeting which was held today, the Reserve bank of New Zealand decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening is planned for the nearest future to duly curb the growth of prices in the country.As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no sense to maintain the rate at the current low level any further.”Latest statistics was in general favourable.

Thus, index of business confidence in New Zealand increased to 47.6 points, as per NBNZ estimates, against the level of 46.5 points in May. Index of inflationary expectations fell to 3.15% (previously: 3.20%) and indicator of prospects with the account of activity increased to 43.7 points last month (38.7 points earlier). Business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.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.

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.

 

[LF.Anastasia]

EUR/USD: Euro is on sale again

The pair EUR/USD has declined at the Forex currency market on Friday as soon as new information on the weak countries of Eurozone became known.

By 9.30 Moscow time the Euro is at 1.4296 against yesterday’s closing level of 1.4332.

As it was made public today, rating agency Moody's has forwarded rating of Spain, that is now at the level of AA2 for review with possibility of further downgrade. This fact has intensified sales on the Euro.

Meanwhile, in the U.S. there is no progress in the issue of increasing limits of the public debts. Yesterday, House of representatives of the Congress should have voted on the budget expenditure cuts bill, proposed earlier by a speaker, a republican, Beyner, however voting did not take place and was postponed for a later time. Parties are still unable to reach consensus, although there is almost no time left before 2 August.

The day is going to be eventful in terms of statistics today; tonight investors will await publication on the U.S. GDP in Q2.

Most likely the pair EUR/USD will not go beyond the range of 1.4200-1.4350 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is in a state of complete uncertainty

At the Forex currency market the British Pound Sterling rate is traded downward on Friday, staying within the six-day range of 1.6260-1.6440.

Forex forecast: MACD indicator for the pair GBP/USD, has broken through the signal line from bottom to the top and is now in the positive area, maintaining a buy signal. Stochastic Oscillator has come out of the overbought zone and is giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of break down at the level of 1.6310, the pair will go to 1.6290 and 1.6270. If downward breakdown does not take place, the pair will consolidate at the current levels.

It became known today that consumer confidence index GfK in the UK fell to -30 points in July against expectations of -26 points. This became a negative sign.

Representative of the Bank of England Mr. Miles noted today that there is still a chance that British economy will slide into recession, according to him, economic growth rate has slowed down and no one can deny yet that there are problems with inflation, CPI might also continue to grow in the short term. In consideration of the data of the last 12 months production output increased only by 0.8%.

Finance Minister Osborne is confident that Great Britain continues to hold a status of a quiet habour, because national authorities are taking tough measures on fiscal policy. He believes that the country shall continue to adhere to consolidation plan to get rid of debts; meanwhile the Britain is able to keep away from recession. Rejection from the fiscal plan at the moment will become a real threat to economic growth, thinks Osborne.

As it became known earlier, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.

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.

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 remains close to highs

At the Forex currency market Swiss Franc rate keeps on being close to historic highs for the third day already.

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 0.7990, the pair USD/CHF will go to 0.7980 and 0.7965. If downward breakdown does not take place, the pair will consolidate at the level of 0.8000.

Franc still acts as a currency- safe harbor.

Rating agency Fitch has 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.

Authorities believe that 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.

It became known earlier that leading indicators index KOF in Switzerland fell to 2.04 in July against the forecast of 2.11. This has become another sign of slowdown in Swiss economy.

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.

 

[LF.Anastasia]

JPY: Japanese Yen continues to rise in price

At the Forex currency market the Japanese Yen rate continues to rise in price on Friday morning due to weak USD and lack of real decisions on the limits of the U.S. public debt.

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 coming very close to the oversold zone.

Forex recommendations: in case of breakdown at the level of 77.40, the pair will go to 77.30 and 77.10.

The following Japanese statistics was released today:

– Net national CPI increased by 0.4% in June against the forecast of +0.5%;

– Household spending in June - 4.2% y/y;

– Preliminary volume of industrial output increased by 3.9% m/m (-1.6% y/y) in June against the forecast of +4.5% m/m;

– Unemployment rate in June: 4.6%.

The data leads to two general conclusions: industrial production is still too poor, household spending continues to decline. Both of these two indicators are in the unfavourable state.

According to the Finance Minister Mr. Noda, current dynamics of the Yen does not correspond to fundamental indicators; however it is necessary to carry out thorough analysis to decide for how long actual situation at Forex can be left unattended.

Representative of the Bank of Japan Mr. Yamaguchi said that high rate of the JPY had no effect on the actual state of economy.

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.

At the last meeting, 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 amount 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%.

 

[LF.Anastasia]

AUD: Correction is ongoing for Australian Dollar

At the Forex currency market on Friday, the Australian Dollar rate goes on with the decline, which started last night.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and goes up, giving a buy signal. Stochastic Oscillator tends to come out of the overbought zone and started to shape a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0920, the pair will try to reach the highs at 1.0900 and further at 1.0875.

It became known today that lending in the private sector in Australia declined by 0.1% m/m (+2.7% y/y) in June, while the forecast had been +0.4% m/m. At the same time mortgage lending increased by 0.3% m/m last month against the growth of 0.5% in May.

Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1. 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.

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.

CPI in Australia increased by 0.9% q/q ((+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q. This data turned out above expectations and supported growth in the pair AUD/USD. 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%.

 

[LF.Anastasia]

NZD: Profit- taking has been registered for New Zealand Dollar at the end of the week

At the Forex currency market the New Zealand Dollar rate declines on Friday – after the rally of this week, investors naturally started profit-taking

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 tends to come out of the overbought zone, and started to shape a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8650, the pair will go to 0.8620 and 0.8600.

According to the data released today, permits for construction in new Zealand decreased by 1.4% m/m in June against the forecast of +3.0%.

At the meeting which was held yesterday, the Reserve bank of New Zealand decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening is planned for the nearest future to duly curb the growth of prices in the country.

As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no sense to maintain the rate at the current low level any further.”

According to statistics released this week, 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.

 

[LF.Anastasia]

EUR/USD: Major pair evaluates decision of the U.S. Congress

The pair EUR/USD is traded with little progress at the Forex currency market on Monday morning, while investors evaluate last U.S. news.

By 8.45 Moscow time the Euro is at 1.4388 against closing level of 1.4395 on Friday.

Last weekend, the U.S. Congress has finally adopted the plan to reduce budget expenditures, it is known currently that the budget will be cut by $2.5 trillion in the next 20 years and main burden will fall on defense sector, while social sphere and health care sector will not be affected.

Thus, at the moment Republicans and Democrats still have one day to adopt decision on the rise of the public debts limits.

Interesting data on Eurozone will be released today, such as unemployment rate in June; the U.S. news will become known in the afternoon.

Most likely the pair EUR/USD will not go beyond the range of 1.4300-1.4450 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound continues grow on Monday

At the Forex currency market the British Pound Sterling rate grows on Monday, continuing the trend of the final days of last week.

Forex forecast: MACD indicator for the pair GBP/USD, has broken through the signal line from bottom to the top and is now in the positive area, maintaining a buy signal. Stochastic Oscillator has come back to the overbought zone, maintaining a buy signal.

Forex recommendations: in case of break down at the level of 1.6450, the pair will go to 1.6480 and 1.6500. If upward breakdown does not take place, the pair will consolidate at the current levels.

The situation in the British economy has not changed much by this morning.

On Monday investors will await publication on the business activity index in the industrial sector in July.

Finance Minister Osborne is confident that Great Britain continues to hold a status of a quiet habour, because national authorities are taking tough measures on fiscal policy. He believes that the country shall continue to adhere to consolidation plan to get rid of debts; meanwhile the Britain is able to keep away from recession. Rejection from the fiscal plan at the moment will become a real threat to economic growth, thinks Osborne.

As it became known earlier, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.

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.

According to statistics released last week consumer confidence index GfK in the UK fell to -30 points in July against expectations of -26 points. This became a negative sign.

Representative of the Bank of England Mr. Miles noted today that there is still a chance that British economy will slide into recession, according to him, economic growth rate has slowed down and no one can deny yet that there are problems with inflation, CPI might also continue to grow in the short term. In consideration of the data of the last 12 months production output increased only by 0.8%.

Recall that CPI in the UK fell by 0.1% m/m (4.2% y/y) in June against the forecast of growth by 0.2% m/m.

 

[LF.Anastasia]

CHF: Swiss Franc is being corrected after reaching new historic highs

At the Forex currency market Swiss Franc rate is being corrected on Monday: Franc grew significantly last Friday, amid uncertainty at the market, and has reached new historic highs, which is now at the level of 0.7850.

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 0.7940, the pair USD/CHF will go to 0.7920 and 0.7890. If downward breakdown does not take place, the pair will consolidate at the current levels.

Swiss data on manufacturing sector in July will be released on Tuesday as well as level of retail sales in June. On Friday, 5 August, investors will focus their attention on CPI for the last month.

Leading indicators index KOF in Switzerland fell to 2.04 in July against the forecast of 2.11. This has become another sign of slowdown in Swiss economy.

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.

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 has 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.

Authorities believe that 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.