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[LF.Anastasia]

GBP: British Pound became a target for sale

At the Forex currency market morning the British Pound Sterling rate is traded downward on Monday, as interest in risk is very low at the market.

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 remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.6160, the target for sale will become the levels of 1.6150 и 1.6120.

Economic situation in Great Britain has not changed significantly this morning. Low interest in risk is unfavourable factor for the Pound; traders are not in a hurry to make purchases because of the obscure external prospects. It is obvious now that the GBP cannot expect support from anywhere until significant improvements will take place in the external background. Although technical rebound 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.

It became known earlier 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.

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.

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.

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.

A meeting of the Bank of England will be held this week, will be interesting to know follow-up comments of the monetary authorities.

 

[LF.Anastasia]

CHF: Growth of Swiss Franc has been suspended

At the Forex currency market growth of Swiss Franc rate has suspended on Monday.

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, approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 0.7870, the pair USD/CHF will go to 0.7860 and 0.7850. If downward breakdown does not take place, the pair will consolidate at the current levels.

In general, conditions in the market are favourable for the growth of the Franc, because global market outlook is rather gloomy. In addition, authorities of Switzerland supported SNB’s plans of non-intervention into the exchange trading, which can also be beneficial to CHF.

We would remind that 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.

Agency Reuters said earlier 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.

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.

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.

 

[LF.Anastasia]

JPY: Japanese Yen has shifted to strengthening again

Japanese Yen rate continues to strengthen gradually at the Forex currency market on Monday morning.

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

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to к 76.20 and 76.00. If downward breakdown does not take place, the pair will aim to 77.40.

The Yen continues to grow at the beginning of the week, despite technical signals, because demand for the currency as a safe harbor is still preserved.

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

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 next quarter Japan will demonstrate the rise of economy.

The fight against expensive JPY is one of the three objectives of a new Cabinet.

 

[LF.Anastasia]

AUD: Australian Dollar is on sale at the beginning of the week

At the Forex currency market the Australian Dollar rate is traded downward on Monday, because investors’ interest in risk has dropped.

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 goes down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0550, the pair will go to 1.0520 and 1.0510. If downward breakdown does not take place, the pair will consolidate at the current levels.

According to the data released today, macro-economic situation in Australia remains mixed. On the one hand, activity index in the service sector AIG/CBA in Australia increased by 3.3 points, to the level of 52.1 points. On the other hand, number of vacancy announcements ANZ in Australia fell by 0.6% m/m in August against similar decline in July.

At the same time, 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.

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.

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%.

 

[LF.Anastasia]

NZD: New Zealand Dollar continues to decline

At the Forex currency market on Friday the New Zealand Dollar rate continues to decline on Monday. Due to the pessimistic sentiment at the global markets, investors are not in a hurry to make purchases, awaiting unambiguous catalysts to determine movement direction.

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 goes down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8390, the pair will go to 0.8370 and 0.8360.

Investors’ interest in risk, or rather lack of interest, affects the NZD.

It became known earlier, 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.

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%.

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.”

 

[LF.Anastasia]

EUR/USD: Market receives more grounds to sell Euro

The pair EUR/USD continues to decline on Tuesday, which was caused by expectations of weak Germany statistics this time.

By 9.00 MSK the Euro is at 1.4041 against yesterday’s closing level of 1.4097.

Confidence in the European currency is decreasing every day- sales of the major pair have been going on for the 6th consecutive day and there are no indications of correction.

Today, traders will await German statistics on a number of orders of industrial enterprises which fell sharply in July according to projections. In addition, the data on GDP of Eurozone in Q2 will be known this afternoon.

There are no grounds for the technical rebound so far, although the Euro is significantly oversold.

Most likely the pair EUR/USD will not go beyond the range of 1.3970-1.4150 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: Sales of British Pound are increasing

At the Forex currency market morning sale of the British Pound Sterling continues on Tuesday morning and seems increasing, amid external negative factors.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area and goes down rapidly, giving a sell signal, however volumes started to increase. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.6050, the target for sale will become the levels of 1.6020 and 1.5980.

It became known today that retail sales BRC in the UK fell by 0.6% y/y in August. Low level of consumption in Great Britain, along with the low consumer confidence and poor state of the real estate market has become the main reasons of the decline in the index. Demand is obvious only for food, while demand for clothes and household goods goes down sharply,- reported British Retail Consortium.

Low interest in risk is unfavourable factor for the Pound; traders are not in a hurry to make purchases because of the obscure external prospects. It is obvious now that the GBP cannot expect support from anywhere until significant improvements will take place in the external background. Although technical rebound can become an exceptional option, however after that the pair will be on sale again.

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.

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.

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.

It became known earlier 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.

 

[LF.Anastasia]

CHF: Swiss Franc is slowly strengthening

At the Forex currency market Swiss Franc rate started to strengthen again on Tuesday morning, however the growth is slow.

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 has come into the oversold 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 0.7840, the pair USD/CHF will go to 0.7820 and 0.7800. If downward breakdown does not take place, the pair will consolidate at the current levels.

Last week, agency Reuters announced that according to the information from some sources Swiss authorities are going to adopt a new program to support economy which will become 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. Meanwhile, the program will be targeted not to the external factors but to neutralize the impact of the expensive Franc.

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.

In general, conditions in the market are favourable for the growth of the Franc, because global market outlook is rather gloomy. In addition, authorities of Switzerland supported SNB’s plans of non-intervention into the exchange trading, which can also be beneficial to CHF.

We would remind that 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.

 

[LF.Anastasia]

JPY: Japanese Yen has been strengthening for the third consecutive day

At the Forex currency market the Japanese Yen rate continues to demonstrate a trend to strengthen on Tuesday morning, while the growth rate is low.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and goes up, giving a buy signal, and is preparing to break through the signal line. Stochastic Oscillator continues to go up in the neutral zone, and can shift to sideways; meanwhile it is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to к 76.20 and 76.00. If downward breakdown does not take place, the pair will aim to 77.40.

Thus, the Yen is repeating yesterday’s trend and continues to grow despite technical signals, because demand for the “safe harbor” currency is still preserved. New Prime Minister of Japan Yosihiko Noda has formed a new cabinet: Jun Adzumi has become a new Finance Minister. The data released earlier 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.

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 next quarter Japan will demonstrate the rise of economy.

The fight against expensive JPY is one of the three objectives of a new Cabinet. 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.

Meeting of the Bank of Japan will be held this week; economic projections for the period until the end of the year are worthy of being noted.

 

[LF.Anastasia]

AUD: Australian Dollar goes down

At the Forex currency market the Australian Dollar rate continues to lose positions on Tuesday, largely due to traders’ risk aversion which is not only preserved but is increasing.

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 the oversold zone, maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0510, the pair will go to 1.0490 and 1.0470. If downward breakdown does not take place, the pair will consolidate at the current levels.

At the meeting of the Reserve Bank of Australia which was held today, it is decided to leave the cash rate unchanged at 4.75% per annum, as expected.

In the follow-up comments the head of the RBA Glen Stevens noted that “medium term economic prospects look worse that it had been expected a few months earlier. Global financial markets demonstrated severe instability”. The situation with the rate seems logical amid such background. “The RBA Committee decided that the most viable option will be to maintain current course of the monetary policy. At the next meeting the RBA will continue to carefully analyze both the prospects for economic growth and inflation in Australia, –said Stevens.

The pause in the policy of monetary tightening, maintained by the RBA, has been going on for 9 months already.

Statistics released on Tuesday showed that mortgage lending in Australia increased by 1.0% m/m in July against the growth of 0.6% m/m in June. In addition, current account balance in Australia amounted to -A$7.4 billion in Q2 against the level of -A$11.1 billion in Q1.

At the same time, activity index in the service sector AIG/CBA in Australia increased by 3.3 points, to the level of 52.1 points. On the other hand, number of vacancy announcements ANZ in Australia fell by 0.6% m/m in August against similar decline in July. Consumer lending in Australia increased by 0.2% 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.

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.