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[LF.Anastasia]

AUD: Growth of Australian Dollar subsides

At the Forex currency market the Australian Dollar rate barely goes upward on Thursday morning: new catalyst which is capable to rouse traders for buying did not turn up and the pair AUD/USD does not receive internal support so far.

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and is growing, giving a buy signal, while volumes are still insignificant. Stochastic Oscillator has come into overbought zone and a buy signal is fading away; however it tends to go out of the zone, which gives a chance for a buy signal during a day.

Forex recommendations: in case of breakdown at the level of 1.0660, the pair will go to 1.0620 and 1.0590. If downward breakdown does not take place, the pair will continue to go to1.0750.

At the moment, the AUD responds very sensitively to the changes in investors’ sentiments: balance in the global financial markets is too fragile to make purchases in bulk.

Macro-economic situation in Australia is improving: consumer lending in Australia increased by 0.2% m/m in July versus the fall of 0.1% in June. Number of permits to construct in Australia increased by 1.0% m/m in July against the decline of 3.6% m/m in June; Although it is a good indication, it is too early to speak about tendency.

It became known earlier that price index for corporate services in Australia remains unchanged on monthly basis, -0.5% y/y in July against the level of -0.8% y/y in June. In addition, index of leading indicators Conference Board in Australia fell to -0.8% in June; while a month earlier it had amounted to -0.1%. It became known the day earlier sales in the primary housing market of Australia fell by 8.0% m/m in July against the decline of 8.7% m/m a month earlier. Presently, it looks more like stabilization of the situation, than a tendency for improvement in the indicator.

Index of leading indicators Westpac in Australia increased by 0.2% m/m (+1.6% y/y) in June against the growth of 3.0% y/y in May. However, the rate of decline in the index is minimal, considering that the index has been steadily decreasing since 2010. This index indicates prospects for economic activity for the next 3-9 months and judging by its dynamics, rapid growth can be hardly expected.

 

[LF.Anastasia]

CAD: Canadian Dollar steps back under pressure from USD

At the Forex currency market the Canadian Dollar rate is losing benefits gained in the last three weeks and is getting weaker. For the time being, there is no particular interest in risky positions at the market.

Forex recommendations: in case of breakdown at the level of 0.9800, the pair will go 0.9820 and 0.9850. If upward breakdown does not take place, the pair will stay at the current levels.

According to the data released yesterday, GDP in Canada increased by 0.2% m/m in June against the decline of 0.3% in May.

Statistics released earlier prevented growth of the CAD: prices for industrial goods remain at the level of -0.3% in July, the same as a month earlier; prices for raw materials fell by 1.2% against previous expectations of decline by 2.5%.

The situation became harder due to the data on trade balance: the index amounted to -$15.33 billion in Q2 against expectations of -$13.8 billion.

The data is still mixed, which is attributed to strong influence of the American economy on the state of affairs in Canada.

Net CPI in Canada increased by 0.2% m/m (+1.6% y/y) in July. The indicator fell by 0.7% m/m (+3.1% y/y) in June.

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. 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. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

As it became known, number of begun construction in Canada increased to 205.1 thousand in July which is higher than the forecast at 194.5 thousand and above the previous level of 196.6 thousand. In addition, trade deficit in Canada was at the level of -$1.6 billion in June against the level of -$1 billion in May. This is probably related to the problems in the neighboring U.S.

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.

 

[LF.Anastasia]

EUR/USD: EUR/USD awaits catalysts for movement

The pair EUR/USD is traded slightly upward at the Forex currency market on Thursday morning.

By 9.40 MSK the Euro is at 1.4370 against yesterday’s closing level of 1.4369.

The day is going to be eventful in terms of macro-statistics; meanwhile, external catalysts for growth have been exhausted. The data on the business activity index in industry in several European countries will be released in the middle of the session. The U.S statistics will become known in the afternoon: investors will learn the data on a number of claims for unemployment benefits last week; revised data on labour productivity in Q2; index of economic conditions ISM in manufacturing sector in August.

In general, market tends to focus on macro-statistics; however, if external background will give occasion, it can become the guide for the movement.

Most likely the pair EUR/USD will not go beyond the range of 1.4320-1.4430 at the trading session on Thursday.

 

[LF.Anastasia]

EUR/USD: EUR has a chance to rebound

The pair EUR/USD slightly goes up at the Forex currency market on Friday morning ceasing the descending trend of the past three days.

By 9.30 MSK the Euro is at 1.4265 against yesterday’s closing level of 1.4258.

It seems that two factors will be advantageous to the Euro today: first of all markets expect employment statistics tonight which is projected to be not too strong; secondly the Euro needs to be corrected after a three- day decline.

There are no external catalysts for changes in the medium term movement of the major pair yet; therefore the market will be guided by statistics.

Most likely the pair EUR/USD will not go beyond the range of.4230-1.4350 at the trading session on Friday.

 

[LF.Anastasia]

GBP: The fall of British Pound can be continued

At the Forex currency market morning the British Pound Sterling rate slowed down its fall in the morning; however all factors which has brought along sale of the GBP are still in force.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area and goes down rapidly, giving a sell signal, while volumes are low. Stochastic Oscillator has come into oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.6170, the target for sale will become the levels of 1.6150 и 1.6120.

It became known yesterday that PMI CIPS in the manufacturing sector of the UK was at the level of 49.0 points in August against the forecast of decline to 48.6 points and the level of 49.1 points in July.

It is obvious now that the GBP cannot expect support from anywhere until significant improvements in the external background take place. Although technical rebound at the end of the week can become an exceptional option, however after that the pair will be on sale again.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

Unemployment rate in the UK was at the level of 4.9% in July. At the same time, level of unemployed increased by 37.1 thousand. 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.

As it became known earlier net volume of borrowing in the public sector of Great Britain was at the level of -stg1.961 billion in July against the value of stg1.350 billion in June. In addition, other indices also showed that volumes of various public borrowings also went down, indicating fairly high level of effectiveness of the current economic programs.

According to the data released today consumer confidence index GFK/NOP in the UK fell to -31 points in August against the level of -30 points in July. This index, which is one of the most objective assessment of consumer confidence in the UK, is now below the lows of 1970, the time of recession in the country Note: that this index indicates consumers’ economic expectations for the next 12 months.

It became known earlier that index of consumer optimism in the service sector of Great Britain fell by 29% in Q3, as per CBI estimates, against the growth of 10% in Q2. At the same time, the Bank of England expected the growth of the index to the more optimistic levels in Q3 - statistics showed the opposite: optimism is fading away in the current quarter, and volume of business operations reduces in parallel. Despite such gloomy indications, CBI expects stabilization of the situation in Q4.

 

[LF.Anastasia]

CHF: Swiss Franc continues to strengthen

At the Forex currency market Swiss Franc rate is traded upward on Friday morning, continuing to strengthen.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and came into the positive area, maintaining a weak buy signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7900, the pair USD/CHF will go to 0.7890 and 0.7870. If downward breakdown does not take place, the pair will consolidate at the current levels.

Yesterday, agency Reuters said that according to the information from some sources Swiss authorities are going to adopt a new program to support economy which will be the second one. Program can include measures to support innovations and also a package of measures to support infrastructure sector. It is expected that the package will be presented at the winter session of the Parliament.

The major objective of the program will be mainly focused not on the external developments, but will be concentrated on smoothing over the effects of the expensive Franc.

Demand for Franc went up when government announced a new market aid program; although the amount of CHF870 million was lower than expected. In addition, authorities indicated that they are not going to set a target rate for the Franc. According to the Minister of Economic Affairs of Switzerland, the country will have to put up with expensive Franc for some time and only SNB is able to influence on the Franc in medium-term.

It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June. In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points.

Statistics released earlier showed that consumption indicator UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy.

According to the data released earlier, unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.

 

[LF.Anastasia]

JPY: Japanese Yen keeps on aspiration for growth despite technical signals

Japanese Yen rate is traded upward at the Forex currency market on Friday; while the USD is in the position of the outsider, due to expectations of the macro-statistics on the U.S. employment sector tonight.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and it goes up, giving a weak buy signal, and is prepared to break through the signal line. Stochastic Oscillator goes up slightly in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 77.00, the pair will go to 77.20 and 77.40. If upward breakdown does not take place, the pair will aim to 76.40.

New Prime-Minister of Japan Yosihiko Noda has formed a new cabinet: particularly, Jun Adzumi will become a new Finance Minister.

The data released today showed that capital expenditures excluding financial companies in Japan fell by 7.8% y/y in Q2 against the growth of 3.0% y/y a quarter earlier.

As it became known earlier number of begun housing construction in Japan rose by 21.2% in July against the growth of 5.8% in June. In addition, preliminary volume of industrial output in Japan increased by 0.6% m/m in July against the growth of 3.8% a month earlier. The data was weak, which was to the advantage of the growing Yen, which normally moves in the direction opposite to the markets’ sentiment.

According to previous estimates of the Bank of Japan, 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%. Real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the country of the rising sun said that Japan will demonstrate the rise of economy next quarter.

Note: that Rating Agency Moody's reported that rating of Japan had been downgraded to AA3. According to Moody’s the country is under the threat of high level of budget deficit, which has already reached 200% of GDP. In addition, the memorandum has mentioned aftermaths of the disaster in March and ministerial changes that take place too often in the past five years. In addition, Japanese authorities also said that they are going to invest up to $100 billion to fight against expensive Yen.

The fight against expensive JPY is one of the three guidelines of the new cabinet.

 

[LF.Anastasia]

AUD: Australian Dollar has shifted from slow growth to sluggish sales

At the Forex currency market the Australian Dollar rate goes down on Friday morning terminating slow growth of this week.

Forex forecast: MACD indicator remains in the negative area for the pair AUD/USD, and is growing, giving a buy signal, while volumes are still insignificant. Stochastic Oscillator remains in the overbought zone and its buy signal is fading away; however it tends to go out of the zone, which gives a chance for a buy signal during a day.

Forex recommendations: in case of breakdown at the level of 1.0690, the pair will go to 1.0670 and 1.065. If downward breakdown does not take place, the pair will continue to go to1.0750.

Macro-economic situation in Australia is improving: statistics released earlier showed that consumer lending in Australia increased by 0.2% m/m in July versus the fall of 0.1% in June. Number of permits to construct in Australia increased by 1.0% m/m in July against the decline of 3.6% m/m in June; Although it is a good indication, it is too early to speak about tendency.

It became known earlier that price index for corporate services in Australia remains unchanged on monthly basis, -0.5% y/y in July against the level of -0.8% y/y in June. In addition, index of leading indicators Conference Board in Australia fell to -0.8% in June; while a month earlier it had amounted to -0.1%. According to the previous data, sales in the primary housing market of Australia fell by 8.0% m/m in July against the decline of 8.7% m/m a month earlier. Presently, it looks more like stabilization of the situation, than a tendency for improvement in the indicator.

Leading indicators index Westpac in Australia increased by 0.2% m/m (+1.6% y/y) in June against the growth of 3.0% y/y in May. However, the rate of decline in the index is minimal, considering that the index has been steadily decreasing since 2010. This index indicates prospects for economic activity for the next 3-9 months and judging by its dynamics, rapid growth can be hardly expected.

The AUD is very sensitive to the changes in investors’ sentiments: balance in the global financial markets is too fragile to make purchases in bulk.

 

[LF.Anastasia]

NZD: New Zealand Dollar stands still in Friday

At the Forex currency market on Friday the New Zealand Dollar rate almost stands still because external background remains mixed at the end of the week.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD, however it tends to grow, giving ground for a buy signal. Stochastic Oscillator is coming out of the overbought zone and is giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8520, the pair will go to 0.8540 and 0.8560. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Economic situation in New Zealand has not changed fundamentally at the end of the week. Investors’ interest to risk affects the interest rate of the NZD; however fragile stability at the trading floors, which has been observed this week, does not give grounds for the more significant purchases. It became known on Tuesday that permits to construct in New Zealand increased by 13.0% in July against the fall of 1.3% in June.

It is too early to speak about tendency in the indicator; nevertheless current results are quite good.

Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it was 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 which has been planned for the nearest future is aimed to duly curb the rise in 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 point to maintain the rate at the current low level any further.”

It became known earlier that retail sales in New Zealand increased by 0.9% q/q in Q2 against the forecast of growth by 0.7% on quarterly basis. According to the details given in the report the growth is attributed to the sale of motor spare parts, electrical goods and medicine.

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. 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. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

 

[LF.Anastasia]

EUR/USD: A new motive for sales of EUR has been found

The pair EUR/USD continues to descend at the Forex currency market on Monday morning, this time the catalyst has come from outside.

By 9.00 MSK the Euro is at 1.4168 against closing level of 1.4205 on Friday.

Sales of the pair were caused by continuing tension in the market concerning prospects for the Eurozone; in regards to Greece, for example. In addition, the party of German Chancellor, Angela Merkel CDU has lost elections in Mecklenburg-West Pomerania. Due to all these facts, investors are skeptical that consensus about the help to the peripheral countries will be reached fast, as position of Germany in some ways is fundamental.

This afternoon, traders will be interested in the data on the retail sales in Eurozone. ECB meeting will be held on Thursday; surprises are not expected; however the tone of speech of Mr. Trichet, the head of the ECB will be of importance for investors.

Most likely the pair EUR/USD will not go beyond the range of 1.4100-1.4220 at the trading session on Monday.