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[LF.Anastasia]

Forex Analytics of LiteForex of 17.09.10: CAD: Canadian Dollar goes up on Friday

At the Forex currency market the Canadian Dollar rate demonstrates consolidation on Friday; technical signals indicate sales of the pair USD/CAD. It seems that recovering oil prices provide support to the CAD.
Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going down giving a pair sell signal. Stochastic Oscillator is not giving a clear signal today.
Forex recommendations: off the market. At the same time the pair’ bearish sentiments can intensify sellers targets in this case will be the levels of 1.0170 and 1.0140.
At the meeting last week the Bank of Canada decided to raise interest rate level to 1% per annum (+25 basis points). Although the decision was entirely predictable Forex market responded to this by buying up CAD, ignoring monetary politicians accompanying comments that the situation in the economy is vague and uncertain.
In the release the Bank of Canada emphasized that national economy growth rate slowed down in QII this year although the process is within the forecast scope. The Bank gave an indication that although some stimulation of the financial system will be continued, further monetary policy tightening as well as rate rise is not excluded.
Statistics released in September did not please investors a lot: thus number of begun constructions in Canada reduced by 3% m/m in August while new houses foundations totaled 183 thousand. If the situation does not improve in the nearest few months, the CAD will be under significant pressure.
The Canadian trade balance deficit increased to 2.7 billion CAD in August against 1.8 billion in July. It was caused by the exports volume reduction which traditionally supports economy.
According to Timothy Lane, the deputy of the Bank of Canada governor, the economic recovery rate in Canada is more moderate now compared with the previous quarters. The country’s economy grows only due to the public and private spending while actual GDP is still not far from its pre-crisis level. In his view revitalization of the country is uneven and economic activity level is lower than expected.
He also reaffirmed the earlier GDP forecast for Canada noting that expected economic growth this year is about 3.5%, in 2011 –about 2.9%.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.09.10: Dollar goes down in pairing with Euro in advance of the FR meeting

The pair EUR/USD is traded upward at the Forex currency market today – investors do not take the risk of buying the USD in advance of the FR meeting tomorrow as they are positive that FR will announce introduction of some unpopular measures.
By 10.44 Moscow time the Euro is at 1.3078 against closing session level of 1.3037 on Friday.
If the FR reports on measures to support economy it will place the Dollar at a disadvantage – in addition to the signs of the slowdown in economy which is obvious in the statistics such announcement by the FR will urge on the USD decline.
The day is going to be uneventful in regard to macro-statistics in anticipation of the FR meeting which will keep trading in the range.
Most likely the pair EUR/USD will be in the range of 1.3020-1.3150 on Monday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.09.10: CHF: Swiss Franc continues to grow

At the Forex currency market on Monday Swiss Franc rate continues to consolidate after the fall a week earlier. The USD weakness today gives the CHF a great chance to regain from its previous fall.
Forex forecast: MACD indicator is in the positive area for the pair USD/CHF however it has merged with its signal line and does not give a clear signal. Stochastic Oscillator has not identified a clear signal either on Monday.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0125 the pair will go to 1.0160 and 1.0180. If the level of 1.0080 is exceeded, sellers’ targets will beсome the levels of 1.0040 and 1.0000.
We would recall that the Franc declined significantly at Forex due to the bad news pressure from the SNB. Thus at the last week meeting the Bank decided to keep the interest rate at the level of 0.25% for three months. However the major impact on the CHF had another factor: the Bank announced that with the current interest rate inflation level in the country would amount to 0.7% this year and 0.3% in 2011. By the year of 2012 inflation level will hit the level of 1.2%. Thus indicated inflation level makes it possible for the SNB to leave monetary policy unchanged which affected the Franc’s rate.
Swiss economy seems to be stable: GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y) and private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data:1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.
It became known earlier that investors’ optimism index ZEW in Switzerland declined to -5.1 in September against the previous level of 9.1.
Meanwhile investments into the CHF are becoming increasingly attractive for the Forex investors: market realizes that the SHF does not constitute a menace at the moment and is not planning to do it in the nearest future. The fact that investors are averse to risks at Forex counts in favor of CHF at Forex – public debts as well as budget deficit is at a low level in Switzerland; which is another merit of the CHF.
The Franc appears to be stable to hedge risks in expectations of actions by the U.S. Federal Reserve.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.09.10: JPY: Yen is going up slightly however full value correction is still far and away

At the Forex currency market the Japanese Yen rate is consolidating on Monday as the anticipation of the U.S. FR decisions puts pressure on the USD.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY at the beginning of the week however is it going down forming a pair sell signal. Stochastic Oscillator is giving a similar signal on Monday.
Forex recommendations: if the bearish trend intensifies for the pair, sellers’ targets will be the levels of 85.20 and 84.80.
Japanese markets are closed today due to the Old People Day celebrations.
Currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not be able to help the country to curb deflation. Noda noted also that China should continue to work out currency reforms.
The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.
Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Ozawa. The events today showed that investors’ joy was premature.
Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.09.10: GBP: British Pound awaits activators while determining movement direction

At the Forex currency market on Monday the British Pound Sterling rate goes down: even despite apparent weakness of the USD, the Pound fails to overcome macro-statistics impact.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it has merged with the signal line and does not give a clear signal. Stochastic Oscillator is not giving a signal either on Monday.
Forex recommendations: off the market.
Feasible events scenario at Forex: in case of breakdown at the level of 1.5730 the pair will go to 1.5780 and 1.5820. In case of breakdown at the level of 1.5650, sellers’ targets will be 1.5600 and 1.5550. The latter scenario is more feasible at the moment.
The following UK data is released today:
– Mortgage approvals in August: 45 thousand; previous value: 47 thousand;
– Preliminary money supply M4 in August: -0.2% m/m, +1.8% y/y;
– Net mortgage lending in August: STG1.8 billion against STG1.7 billion in July;
– Houses prices Rightmove in September:-1.1% m/m, +2.6% y/y.
Despite such bad statistics the UK rating agency Moody's stated today that the UK AAA rate will be maintained. The data on the retail sales level in Great Britain released earlier was very weak, demonstrating decline by 0.5% while investors expected growth by 0.3% in August.
It is an alarm bell for the economy: it indicates in particular that people feel cautious and alerted regarding their spending as the British economy outlooks are still very uncertain.
The data released earlier was not too optimistic either: number of people who received unemployment benefit in Great Britain increased by 2.3 thousand in August while reduction by 3 thousand was predicted. Unemployment rate remained at the level of 7.8%.
As it became known on Wednesday number of unemployed in Great Britain increased by 2.3 thousand in August to 1.47 million people while market expected reduction by 3 thousand.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.09.10: AUD: Australian Dollar goes up supported by domestic news

At the Forex currency market on Monday the Australian Dollar rate goes up, keeping up ascending trend started last week which however had been interrupted by the sideways.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is going up, giving a pair buy signal. Stochastic Oscillator is giving a similar signal on Monday.
Forex recommendations: buyers’ targets at the beginning of the week will be the levels of 0.9500 and 0.9540.
Monetary policy became a positive factor for the Australian Dollar today: the head of the Reserve Bank of Australia Glenn Stevens stated today that the natural resources boom will continue in the medium term resulting in the Australian economic growth which will be in keeping with the trend and in the year of 2011 will accelerate.
Stevens noted also that if the economy slowdown risks are not justified the Bank will start monetary tightening policy.
It became known last week that the Reserve Bank of Australia kept current interest rate unchanged at the level of 4.50% per annum as market had expected. There was also nothing new in Mr. Stevens’ comments: he stressed that the world economic outlook is still vague although the Australian economic recovery rate is quite acceptable.
According to the data released earlier GDP level in Australia rose to the maximum of the last three years in QII demonstrating consolidation by 1.2% against the forecast of 0.9%. Previous index value was at the level of 0.7%. Economists believe that Chinese demand for iron ore is an activator of the Australian economic growth. New interest rate increase hardly threatens Australia. Interest rate in Australia is at the level of 4.50%per annum now. The main and official version of the last RBA meeting is as follows –current level of the inflation decline made it possible not to undertake drastic measures to tighten monetary policy.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 21.09.10: FR meeting will set the record straight for the pair EUR/USD

The pair EUR/USD continues to consolidate at the Forex currency market on Tuesday morning – however in a smaller volume
By 10.31 Moscow time the Euro is at 1.3084 against closing session level of 1.3061 yesterday.
Market is full of anticipation of the U.S Federal Reserve evening session and especially the subsequent statement of the FR chairman Bernanke.
The data on the U.S. new construction volume is expected to be released this afternoon – it is assumed that the number will demonstrate an increase.
In general it is most likely that the currency will move in narrow ranges until the FR meeting outcome is known.
Presumably the pair EUR/USD will be in the channel of 1.3030-1.3150 on Tuesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 21.09.10: GBP: British Pound continues to go down

At the Forex currency market the British Pound Sterling rate continues to go down – as a whole the downward trend has been going on for the fourth consecutive session as the GBP still has nothing to base itself upon.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it is still going down giving ground for a pair sell signal. Stochastic Oscillator is giving a pair buy signal on Tuesday.
Forex recommendations: off the market.
Feasible event scenario at Forex: if case of breakdown at the level of 1.5580 the pair will go to 1.5650 and 1.5680. If the level of 1.5540 is exceeded, sellers’ targets will become the levels of 1.5490 and 1.5450.
According to the data released today public sector need of the borrowed funds amounted to 5.804 billion pounds against the forecast of 8.1 billion pounds.
In August 2009 public sector declared the need for the additional funds in the amount of 10.317 billion pounds.
It became known earlier that mortgage approvals in the UK amounted to 45 thousand in August; previous value was 47 thousand; market was not elated by this information which caused the Pound decrease; amid the Rightmove data which demonstrated another decline in the houses prices the situation in the sector seems deep gloom.
The Bank of England interest rate is at the level of 0.50% per annum now where it remains for five consecutive months.
The data on the retail sales level in Great Britain released earlier appeared to be very weak, demonstrating decline by 0.5% while investors had expected growth by 0.3% in August.
It is an alarm bell for the economy: it indicates in particular that people feel cautious and alerted regarding their spending as the British economy outlooks are still very uncertain.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 21.09.10: JPY: Yen continues to grow slightly amid the USD instability

At the Forex currency market on Tuesday the Japanese Yen rate continues the slight increase started earlier – investors get away from the investments in the USD towards safer currencies in advance of the U.S. FR meeting today.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY however it is still going down giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today being in the neutral area.
Forex recommendations: targets of the pair’s traders today will be the levels of 85.20 and 84.85.
Basically the situation in the Japanese economy has not changed. The country celebrated Old People Day yesterday therefore trading floors were closed.
Naoto Khan won elections and became the head of the Democratic Party, retaining the leader’s chair. In response the Yen surged to a new peak as Khan is not so ardent supporter of the currency intervention as his rival Ozawa. The events today showed that investors’ joy was premature.
Finance Minister Noda noted on Friday that although different countries interpret intervention differently he believes that his country’s actions are appropriate; however he agrees that the whole background of the process should be explained.
Currency intervention conducted by the Bank of Japan last week was intended to reduce significant fluctuation at the currency market however it would not be able to help the country to curb deflation. Noda noted also that China should continue to work out currency reforms.
The head of the Bank Shirakawa made a statement in which he noted that authorities should closely monitor the downside risks to the national economy; the politician gave an indication that the Bank’s further intervention is probable. On Thursday Shirakawa noted that intervention would help to appease Forex market; currency market as well as stock market is unstable although the economy itself demonstrates moderate recovery.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 21.09.10: CHF: Swiss Franc grows more steadily

At the Forex currency market on Tuesday Swiss Franc rate continues to demonstrate growth.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF on Tuesday and continues to go down confirming a pair previous sell signal. Stochastic Oscillator has started to form a pair buy signal today.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0080 the pair will go to 1.0120 and 1.0170. If the level of 1.0030 is exceeded, traders’ targets will be the levels of 0.9970 and 0.9930.
The following Swiss data was released today:
– Exports in August: +8.6% y/y to 14.43 billion francs;
– Imports: +24.9% y/y: to 13.87 billion francs;
– Foreign trade black ink: 0,568 billion francs.
As the Swiss Customs administration noted surplus increase is associated with the expensive Franc. Furthermore extra working day in August also counted.
We would recall that the Franc declined significantly at Forex due to the bad news pressure from the SNB. Thus at the last week meeting the Bank decided to keep the interest rate at the level of 0.25% for three months. However the major impact on the CHF had another factor: the Bank announced that with the current interest rate inflation level in the country would amount to 0.7% this year and 0.3% in 2011. By the year of 2012 inflation level will hit the level of 1.2%. Thus indicated inflation level makes it possible for the SNB to leave monetary policy unchanged which affected the Franc’s rate.
It became known earlier that investors’ optimism index ZEW in Switzerland declined to -5.1 in September against the previous level of 9.1.
Meanwhile Swiss economy seems to be stable: GDP level in Switzerland rose by 0.9% on quarterly basis (+3.4% y/y) in QII against the forecast of +0.8% (+2.6% y/y) and private consumption index in Switzerland increased to 1.86 in July against the previous value of 1.81 (revised data:1.80). Index is calculated on the basis of the several indicators and the fact that it is above 1.50 is an indication of the favourable economic development in the country.