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[LF.Anastasia]

EUR/USD: Euro is again below the level of 1.35

The pair EUR/USD is traded downward at the Forex currency market on Tuesday morning because interest to risk is low again.

By 9.40 the Euro is at 1.3487 against yesterday’s closing level of 1.3501.

Investors expect that the data on the level of the consumer confidence in Eurozone will be unfavourable, as well as the outcome of the next auction, Italy is going to offer its bonds this time.

Yesterday, rating agency Moody's и S&P confirmed that they are not going to review credit rating of the USA although work of the Bicameral Commission in the Congress admitted to be a failure.

Traders’ attention tonight will be focused on the U.S. where final GDP data in Q3 is being prepared for the release.

Most likely, the pair EUR/USD will not go beyond the range of 1.3420-1.3520 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound tries to go up from the lows of October

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Tuesday.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it is descending moderately and is giving a sell signal. Stochastic Oscillator remains in the oversold zone, maintaining a sell signal and tends to go out of the zone.

Forex recommendations: in case of break down at the level of 1.5650, target for sale will be the levels of 1.5640 and 1.5630. The pair can go up to 1.5700 as part of correction.

According to British Prime Minister Cameron, paralyses in the market were caused by European panic. In the current situation recovery of Great Britain is too slow. The country has to resolve the issue of its own debts and not to look around at others. In the current state of affairs additional stimulation could be dangerous; therefore it is not seriously considered.

However if Eurozone resolved its urgent problems, it would become a powerful catalyst for the British economy.

It became known yesterday that house prices Rightmove in the UK fell by 3.1% m/m (+1.2% y/y) in November. The Pound did not react to statistics too actively, since it had already been under pressure from sales.

Consumer confidence index Nationwide in the UK declined to the record lows of 36 points in October against the forecast of 43 points. Consumer expectations fell to 48 points against previous level of 62 points. It is a negative signal because steady economic growth cannot be expected without revival of consumer sentiments. In addition, according to the data released yesterday the Bank of England has revised its inflationary expectations, as per the Bank estimates, in three years time CPI will be 1.5%, while volume QE will be STG275 billion and interest rate will be consistent with market expectations.

The head of the Bank of England Mervyn King immediately noted that economic situation in Britain remains complex and growth of industrial output shall be practically zero since mid-2012, although in the short-term it will be weaker than previously expected. According to him, resources of monetary policy to stimulate economy are limited. According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.

 

[LF.Anastasia]

CHF: Swiss Franc slowly strengthens

At the Forex currency market on Tuesday Swiss Franc rate is traded upward, although it is hardly noticeable; the same trend has been going on for the third consecutive day; however it does not go beyond the scope of inactive purchases.

Forex forecast: MACD indicator for the pair USD/CHF is going up in the positive area and is shaping a buy signal. Stochastic Oscillator has come out of the overbought zone and started to give a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9145, the pair USD/CHF will go to 0.9130 и 0.9120.

It became known today that trade balance in Switzerland amounted to 2.15 billion francs in October against the forecast of 2.06 billion francs. The data is positive, given global slump in demand and expensive franc.

On Thursday investors’ attention will be drawn to employment data in non-agricultural sector in Q3.

Representative of SNB Mr. Jordan reported earlier that Swiss regulator does not need external guidance on monetary policy, as it is an independent institution and does not intend to receive instructions from business groups and politicians. SNB will continue to take appropriate measures if economic forecasts and deflation will need them. According to him growth of Swiss economy has slowed down earlier, due to the high exchange rate of Swiss Franc.

According estimates of Swiss National Bank, GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be attributed to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August. Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. The data which is going to be released this week will show dynamics in the index.

 

[LF.Anastasia]

JPY: Japanese Yen is getting weaker for the first time this week

At the Forex currency market the Japanese Yen rate is traded downward, since investors realized that there is no threat to the U.S. rating yet.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is going down, giving a sell signal; volumes are minimal. Oscillator has come out of the oversold zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 77.20, the pair will go to 77.35 and 77.50. If downward breakdown does not take place, the pair will consolidate at the current levels.

Japanese Yen was in demand as a “safe harbor” currency; however after yesterday’s announcement made by rating agency Moody's и S&P that highest rating of the country is not going to be reviewed yet, interest to JPY has faded away.

It became known earlier that index of coincident indicators in Japan was revised to -1.3 points in September against previous level of -1.4 points.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y.

Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.

At two-day meeting which finished last week, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October. It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once. Japanese economy is still strongly dependant on the external demand, which is not very reliable at the moment. All these encourages Yen’s tendency to grow.

According to the minutes of the last meeting of the Bank of Japan, acquisition of two-year government bonds is an effective method of influence on the currency market; at the same time state of affairs in Eurozone has its enormous affect as well. In addition, descending risks have increased for Japanese economy due to the growing Yen and collapse of the stock markets.

 

[LF.Anastasia]

AUD: Sales of Australian Dollar have not subsided

At the Forex currency market the Australian Dollar rate is under pressure of sellers on Tuesday.

Forex forecast: MACD indicator for the pair AUD/USD has broken through the signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.9860, the pair will go to 0.9850 and 0.9830. If downward breakdown does not take place, the pair will consolidate at the current levels.

The Australian Dollar is still in a shaky position, since demand for high yield currencies is minimal. Situation in Europe is far from ideal; therefore, as long as turbulence at the trading floors is not subsided there will not be any craving for risk.

Australian economic situation has not changed this morning.

Minutes of the last meeting of the Reserve Bank of Australia were released last week. According to the document, RBA expects that in the next two years dynamics of the country’s GDP will be close to the trend; at the same time regulator noted that latest statistics had improved slightly. Slowdown of the Chinese economy naturally affected the growth rate of the Australian economy and inflation in Australia probably has reached its peak. According to RBA, decline in market rates enables to maintain discount rate unchanged, while high risks of deceleration in Australian economy, which can be caused by recession in Europe, are still preserved.

Unemployment rate in Australia decreased to 5.2% in October against 5.3% a month earlier. Business confidence NAB increased to 2 points in October against preliminary level of -1 points. According to NAB, the growth has been triggered by expectations that the Reserve Bank of Australia will continue to soften monetary policy in the future. It is interesting that business confidence NAB in Q3 amounted to -4 points in Q3; while the index had been at the level of +5 points in Q2. According to estimates of the observers, the level of employment, sales and corporate profit in the country has dropped considerably.

According to statistics released earlier, index of leading indicators Westpac in Australia fell by 0.3% m/m in September against 0.8% m/m a month earlier. It is not surprising if we take into to account strong influence of the situation in Eurozone and China on the Australian economy. According to statistics released earlier, consumer sentiments Westpac in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to the monetary politician Evans the level of the indicator has been at the highs since May 2011 which shall not prevent RBA from lowering the rate once again at the meeting in February.

 

[LF.Anastasia]

NZD: Trades for New Zealand Dollar is at the lows of this Autumn

At the Forex currency market the New Zealand Dollar rate is traded with minimal deviation on Tuesday; however it is still under pressure caused by investors’ low interest to risk.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal. Stochastic Oscillator remains in the oversold zone maintaining a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7485, the pair will go to 0.7470 and 0.7460. If downward breakdown does not take place, the pair will consolidate at the achieved levels. The pair can reach the level of 0.7510 as part of rebound.

The data released this morning showed that annual inflationary expectations in New Zealand fell to 2.72% in Q4 against the level of 2.94% a quarter earlier. It became another indication that economic growth in the country is decelerating.

According to previous data, GDP in New Zealand rose 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. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report 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.

As it became known this week volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points.

It will be difficult for the RBNZ to decrease rate under existing economic realities: regulator keeps on pursuing quite aggressive monetary policy.

 

[LF.Anastasia]

EUR/USD: Sellers of Euro are back again

The pair EUR/USD is declining at the Forex currency market on Wednesday morning.

By 9.35 the Euro is at 1.3461 against yesterday’s closing level of 1.3512.

Grounds for today’s sales came from China: weak data on manufacturing activity in China was released this morning; in addition, investors try to regain from poor statistics on final U.S. GDP in Q3.

What important is that market did not expect major revision of the U.S. economic growth rate of the last quarter; such figures do not excluded that the U.S. economy will need additional stimulation.

This afternoon traders will wait for the data on manufacturing activity in Germany and France; if indicators will be weak, it will increase sales of the major pair.

Most likely, the pair EUR/USD will not go beyond the range of 1.3410-1.3495 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound continues to decline

At the Forex currency market the British Pound Sterling rate continues to decline on Wednesday: investors shy away from risky positions facing with another bunch of dubious information from Eurozone and the U.S.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it is descending moderately and is giving a sell signal, preparing to break through the signal line from top to bottom. Stochastic Oscillator remains in the oversold zone, maintaining a similar signal.

Forex recommendations: in case of break down at the level of 1.5620, target for sale will be the levels of 1.5610 and 1.5600.

Discussions about levels of incentives and interest rates are still going on in Great Britain. Yesterday representative of the Bank of England Miles said that in the recovery process of the British economy the rates shall revert to the normal levels. At the same time monetary politician stressed that uncertainty about income of households has increased sharply. Net income of the most households has decreased considerably.

A week ago British Prime Minister Cameron noted that European panic was the ground for paralyses in the market. In the current situation recovery of Great Britain is too slow. The country has to resolve the issue of its own debts and not to look around at others. In the current state of affairs additional stimulation could be dangerous; therefore it is not seriously considered. However if Eurozone resolved its urgent problems, it would become a powerful catalyst for the British economy.

It became known earlier that house prices Rightmove in the UK fell by 3.1% m/m (+1.2% y/y) in November. The Pound did not react to statistics too actively, since it had already been under pressure from sales.

According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.

Consumer confidence index Nationwide in the UK declined to the record lows of 36 points in October against the forecast of 43 points. Consumer expectations fell to 48 points against previous level of 62 points. It is a negative signal because steady economic growth cannot be expected without revival of consumer sentiments. In addition, according to the data released yesterday the Bank of England has revised its inflationary expectations, as per the Bank estimates, in three years time CPI will be 1.5%, while volume QE will be STG275 billion and interest rate will be consistent with market expectations.

 

[LF.Anastasia]

CHF: Swiss Franc ceased to grow

At the Forex currency market on Tuesday Swiss Franc rate in traded almost unchanged in the middle of the week; however growth of the currency has slowed down.

Forex forecast: MACD indicator for the pair USD/CHF is going up in the positive area and is shaping a buy signal. Stochastic Oscillator is descending in the neutral 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 0.9145, the pair USD/CHF will go to 0.9130 и 0.9120. Ir Franc becomes weaker it will lead the pair to 0.9200.

Economic situation in Switzerland has not changed significantly currently.

It became known yesterday that trade balance in Switzerland amounted to 2.15 billion francs in October against the forecast of 2.06 billion francs. The data is positive, given global slump in demand and expensive franc. On Thursday investors’ attention will be drawn to employment data in non-agricultural sector in Q3.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August. Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. The data which is going to be released this week will show dynamics in the index.

Representative of SNB Mr. Jordan reported earlier that Swiss regulator does not need external guidance on monetary policy, as it is an independent institution and does not intend to receive instructions from business groups and politicians. SNB will continue to take appropriate measures if it is required considering the state of economic forecasts and deflation. According to him slowdown in economic growth in Switzerland, which took place earlier, was caused by high exchange rate of Swiss Franc.

According estimates of Swiss National Bank, GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be attributed to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

 

[LF.Anastasia]

JPY: Market’s sympathies are not with Japanese Yen

At the Forex currency market the Japanese Yen rate continues to be under moderate pressure.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is going down, giving a sell signal; volumes are small. Oscillator is going up in the neutral zone and is giving a strong signal to buy.

Forex recommendations: in case of breakdown at the level of 77.10, the pair will go to 77.2 5 and 77.40. If upward breakdown does not take place, the pair will consolidate at the current levels.

Presently, economic situation in Japan remains unchanged; demand for the YPY is low due to the mixed information from the U.S. and Eurozone.

It became known earlier that index of coincident indicators in Japan was revised to -1.3 points in September against previous level of -1.4 points.

At two-day meeting last week, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October. It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once. Japanese economy is still strongly dependant on the external demand, which is not very reliable at the moment. All these fosters Yen’s tendency to grow.

According to the minutes of the last meeting of the Bank of Japan, acquisition of two-year government bonds is an effective method of influence on the currency market; at the same time, state of affairs in Eurozone has its enormous affect as well. In addition, descending risks have increased for Japanese economy due to the growing Yen and collapse of the stock markets.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y. Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.