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[LF.Anastasia]

NZD: the New Zealand Dollar correction goes forward at a steady gait

The New Zealand Dollar rate trades upward at the Forex currency market on Tuesday morning – traders use an excellent opportunity for the technical rebound.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal. Stochastic Oscillator is rising in the neutral zone, giving a poor buy signal.

Forex recommendations: in case of breakup at the level of 0.7860, the pair will go to 0.7870 and 0.7890.

In whole the main market driver is the external background and world financial markets’ investors’ sentiment.

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 worth noting that number of permits to construct in New Zealand decreased by 1.4% m/m in July against the forecast of +3.0%. Activity in the construction sector of Australia was at the level of - 6.6 q/q in Q2; which agreed with the revised data in Q1.

As it became known earlier, consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

It became known last week that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1.

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

Levels of exports do not support economy of New Zealand: the index decreased by 0.5% last quarter, while the share of imports increased by 1.7%.

As it became known at the beginning of the week, trade balance in New Zealand amounted to -NZD641 bln in august against the expectations of –NZD321 bln. This was a logical addition to the previously released data: current account balance in New Zealand amounted to –NZ$2.0 billion in Q2 against preliminary estimate of –NZ$1.5% billion. It is obvious that economy of the country suffers from the global decline in demand – New Zealand is the country which is focused on exports and supplies dairy products vegetables, wool, therefore much less money will come to the state treasury.

 

[LF.Anastasia]

GBP: The British Pound sets for new highs

At the Forex currency market the British Pound Sterling rate continues moving upward today – as soon as the external background creates a buying opportunity the currency is actively bought from a year lows.

Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, giving a sell signal; volumes are increasing. Stochastic Oscillator left the oversold zone and is steadily rising in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakup at the level of 1.5680, sales target will be the levels of 1.5690 and 1.5720. If breakup does not take place, the pair will consolidate close to the current levels. One cannot exclude that the British Pound will be sold again if the external background worsens.

In spite of the fact that it’s too early to talk of the about-turn, the British Pound’s year lows did good to the currency – amid rather stable external background investors gained interest in GBP.

There was no important data from Great Britain this week so traders take all decisions in line with external background.

According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before.

In this case the earlier data doesn’t seem strange: house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects.

It became known earlier that retail sales in the UK fell by 0.2% m/m, in August; the index has not changed on annual basis. In addition, Mr. Cable said that program QE will enable economy to regain both consumer and business confidence if they press ahead with a program in the same volumes. The data released earlier was interesting: index of retail sales in the UK amounted to +0.6% m/m (+5.2% y/y), which agreed with expectations. In addition, consumer price index CPI rose by 0.6% m/m (+4.5% y/y) in August against the forecast of growth by 0.6% m/m.

 

[LF.Anastasia]

CHF: Swiss Franc was trying to resume growth for the last several trading sessions

Swiss Franc rate was trying to resume growth and during the last three trading sessions moved to the middle of the tight range seen as an immediate reaction for the SNB strict measures.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator starts moving downward forming a sell signal.

Forex recommendations: in case of breadown at the level of 0.8950, the pair USD/CHF will go to 0.8935 and 0.8910. If breakdown does not take place, the pair will possibly stay near the current levels.

According to the research published this week, the economic forecast of KOF Institution in Switzerland this year totaled +2,3% in September.

As it became known the day before, UBS Consumption indicator in Switzerland fell to 0.79 points in August against the level of 1.29 points a month before. This is another sign of Swiss economy cooling.

Index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious. The data released also showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July. It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.

Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.

Released last week SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.

 

[LF.Anastasia]

JPY: the Japanese Yen rate sets for a long-term blockade

At the Forex currency market the Japanese Yen rate faces hard times – government plans to weaken the Japanese currency in the long term started to influence the JPY the day before.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going down, giving a sell signal. Stochastic Oscillator resumes growth in the neutral zone giving a buy signal.

Forex recommendations: in case of breakup at the level of 76.60, the pair will go to 76.80 and 77.30. If breakup does not take place, the pair will consolidate at the current levels.

As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments.

It should be noted that the Japanese Finance minister said that the third money tranche to restore injured by an earthquake objects will amount to JPY11 trln.

He also noted that all measures influencing the national currency will ne taken “if needed”.

It became known earlier that revised industrial output in July rose by 0.4% m/m against preliminary value of +0.6% m/m, which is logical since the decline that is being observed in all sections was caused by the slowdown of the world economy.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July. In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July.

It’s interesting to note that Japan doesn’t rule out taking part in Greece aid – in case the Athens provide an adequate plan.

 

[LF.Anastasia]

AUD: the Australian Dollar increases energetically

At the Forex currency market the Australian Dollar rate increases energetically as soon as positive external background allows the currency to rise. Current Aussie levels are still attractive – but in case the external background worsens, “Bears” will return to the pair very soon.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area and is giving a sell signal. Stochastic Oscillator left the oversold zone and is rising in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakup at the level of 0.9960, the pair will go to 0.9970 and 0.9995. If the breakup does not take place, the pair will consolidate at the current levels.

The macroeconomic situation remains the same by today. No data will be published in Australia till the end of the week, so traders should only hope for some rebound on the back of the external background.

Minutes of the last meeting of the Reserve Bank of Australia which were made public last week show, that current levels of the rates correspond to the existing situation, while medium- term outlooks for economic growth continue to be optimistic. Companies are ready to hire employees, which is a positive factor, however the expensive AUD has forced to review business strategies and plans. The minutes look weird, considering that Australian economy suffers huge losses now, due to the decrease in exports levels and particularly for coal.

The data released previously showed that consumer confidence Westpac in Australia rose by 8.1% m/m in September, reaching the level of 96.9 points. Index of business conditions NAB in Australia fell by 3 points in August against the level of -1 point in July. The index declined to the lowest level since April 2009, indicating recession in the sentiments and prospects. National Australian Bank Ltd, noted commenting these result, that it reflects increased level of uneasiness and concern about further expansion of the debt crisis.

Still the increase is correctional and it’s too early to speak of the about-turn. One should note that the Australian economy does not provide any pretext for technical rebound – the external background is the only hope.

 

[LF.Anastasia]

NZD: the New Zealand Dollar increase is not finished yet

The New Zealand Dollar rate continues trading upward at the Forex currency market showing all signs of recouping growth from the local lows. As soon as external background allows traders to risk, the currency will grow.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal. Stochastic Oscillator is rising in the neutral zone, giving a poor buy signal.

Forex recommendations: in case of breakup at the level of 0.7935, the pair will show a correctional movement to 0.7960 and 0.7990.

In whole the main market driver is the external background and world financial markets’ investors’ sentiment.

The statistics released the day before turned out to be mixed. Consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

It became known last week that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1.

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

Levels of exports do not support economy of New Zealand: the index decreased by 0.5% last quarter, while the share of imports increased by 1.7%.

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 worth noting that number of permits to construct in New Zealand decreased by 1.4% m/m in July against the forecast of +3.0%. Activity in the construction sector of Australia was at the level of - 6.6 q/q in Q2; which agreed with the revised data in Q1. As it became known at the beginning of the week, trade balance in New Zealand amounted to -NZD641 bln in august against the expectations of –NZD321 bln. This was a logical addition to the previously released data: current account balance in New Zealand amounted to –NZ$2.0 billion in Q2 against preliminary estimate of –NZ$1.5 billion. It is obvious that economy of the country suffers from the global decline in demand – New Zealand is the country which is focused on exports and supplies dairy products vegetables, wool, therefore much less money will come to the state treasury.

 

[LF.Anastasia]

EUR/USD: Euro gained support from decisions on Greece

The pair EUR/USD is traded upward at the Forex currency market early Wednesday amid positive Greece decisions.

By 0.10 MSK the Euro is at 1.3641.

A voting in Greece Parliament that took place the day before finished positively: politicians agreed on a set of strict economy measures including a quite arguable household tax. Still the Athens carry out its part of the agreement with EU and IMF though introduce aggressive measures at the very last moment creating extra stresses for the economy.

As said by the S&P the day before, the current crisis is not applicable to all the EU countries – only to some of them. At the same time the agency sees some steps towards overcoming the debt problems in Europe: some swap operations can be used as a positive measure.

At the same time there is no final decision on a new money transfer in Greece and September, 30, is approaching, so it’s too early to set aside the risk of default.

Most likely the pair EUR/USD will not go beyond the range of 1.3550-1.3720 at the trading session on Wednesday.

 

[LF.Anastasia]

EUR/USD: Euro rises amid positive expectations

The pair EUR/USD is traded upward at the Forex currency market on Thursday on expectations of Germany decisions.

By 9.00 MSK the Euro is at 1.3623 against yesterday’s closing level of 1.3542.Germany will make a decision on possible EFSF program enlarging – from current EUR440 bln to EUR780 bln today. This measure is likely to prevent debt crisis spreading across the Eurozone. The opposition has already supported the ruling party, so there is practically no doubt in project’s approval.

Midday investors will pay attention to the European statistics – Germany Unemployment data and Business climate index in Eurozone in September. USA will also make public some employment data.

Most likely the pair EUR/USD will not go beyond the range of 1.3570-1.3690 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: positive external background remains the main driver for the British Pound

At the Forex currency market the British Pound Sterling rate continues moving upward on Thursday in spite of yesterday’s evening correction. The external background remains the main driver for the British Pound – Europe is awaiting problem-solving decisions.

Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, giving a sell signal; volumes exceed average. Stochastic Oscillator is steadily rising in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakup at the level of 1.5680, sales target will be the levels of 1.5690 and 1.5720. If breakup does not take place, the pair will consolidate close to the current levels.

According to the data released today’s morning, Nationwide house price index in Great Britain increased by 0.1% m/m (-0.3% y/y) in September. The statistics released earlier showed that house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects.

As noted by the regulator the day before, banks shouln’t reinforce market volatility. Besides banks’ capital saving shouldn’t limit lending.

According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before.

It became known earlier that retail sales in the UK fell by 0.2% m/m, in August; the index has not changed on annual basis. In addition, Mr. Cable said that program QE will enable economy to regain both consumer and business confidence if they press ahead with a program in the same volumes. The data released earlier was interesting: index of retail sales in the UK amounted to +0.6% m/m (+5.2% y/y), which agreed with expectations. In addition, consumer price index CPI rose by 0.6% m/m (+4.5% y/y) in August against the forecast of growth by 0.6% m/m.

In spite of the fact that it’s too early to talk of the about-turn, the British Pound’s year lows did good to the currency – amid rather stable external background investors gained interest in GBP.

 

[LF.Anastasia]

CHF: Swiss Franc is not allowed to leave the range

Swiss Franc rate continues trading in the same range at the Forex currency market on Thursday morning as a reaction for the SNB strict measures.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator continues moving downward forming a sell signal.

Forex recommendations: in case of breadown at the level of 0.8950, the pair USD/CHF will go to 0.8935 and 0.8910. If breakdown does not take place, the pair will possibly stay near the current levels.

According to SNB representative Mr. Dallas, Swiss Franc’s reserves should be grown to prevent CHF from excessive strengthening, and SNB uses all measures to protect the target level of the currency. He also added, that if no actions were to be taken, the Swiss Franc would grow to above the parity in pairing with Euro.

Mr. Dallas didn’t comment on the possible rise of the target level. Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.

According to the research published this week, the economic forecast of KOF Institution in Switzerland this year totaled +2,3% in September. As it became known the day before, UBS Consumption indicator in Switzerland fell to 0.79 points in August against the level of 1.29 points a month before. This is another sign of Swiss economy cooling.

Released last week SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.

Index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious. The data released also showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July. It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.