LiteForex's analytics

[LF.Anastasia]

AUD: Australian Dollar slips steadily downward

At the Forex currency market the Australian Dollar rate continues to be actively sold out on Wednesday.

Forex forecast: MACD indicator for the pair AUD/USD has broken through the signal line from top to bottom and is still 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 0.9760, the pair will go to 0.9750 and 0.9730. If downward breakdown does not take place, the pair will consolidate at the current levels.

The data released today showed that leading indicators index CB in Australia increased by 0.1% m/m in September against previous decline of 0.2% m/m. Corporate profit and exports of agricultural products were among the main drivers of the increase in the index. New statistics does not cancel downward pressure, and the main reason for this was caused by changes in prices for securities at the stock market.

The AUD has ignored this statistics.

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. 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.

 

[LF.Anastasia]

NZD: Trades for New Zealand Dollar went below the lows of September

At the Forex currency market the New Zealand Dollar rate remains under strong downward pressure in the middle of the week. Investors are not going to enter into long positions in the high-yielding currencies because of increasing risks.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal; volumes are increasing. 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.

Economic situation in New Zealand remains unchanged.

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

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 in the current economic situation : regulator keeps on pursuing quite aggressive monetary policy.

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.

 

[LF.Anastasia]

EUR/USD: Euro is being corrected after downfall

The pair EUR/USD is traded upward at the Forex currency market on Thursday morning as part of correction.

By 9.30 the Euro is at 1.3370 against yesterday’s closing level of 1.3336.

American trading floors are closed today due to celebration of the Thanksgiving Day and trading activity is going to be moderate today. A big strike is scheduled for today in Portugal: protesters are against introduction of austerity measures. Next week Portuguese Parliament will review and approve a scheme of measures to reduce budget deficit by lowering levels of national debt and cutting budget expenditures.

The data on business confidence in Germany will be noteworthy this afternoon.

Most likely, the pair EUR/USD will not go beyond the range of 1.3320-1.3410 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound makes attempts at correction

At the Forex currency market the British Pound Sterling rate makes attempts at correction on Thursday after yesterday’s massive sale.

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 1.5550, target for sale will be the levels of 1.5540 and 1.5520.

Trading activity is unlikely to be high today due to absence of American traders.

Representative of the Bank of England, a former “Hawk” noted that inflation rate will drop sharply next year; however the Bank of England will continue to stimulate economy. It is interesting that all monetary politicians are pretty positive that CPI will fall sharply, but no one has specified what factors will trigger these radical changes in the situation.

Discussions about levels of incentives and interest rates are still going on in Great Britain. Representative of the Bank of England Miles said earlier that with the development of the recovery process in 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.

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

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 remains within the range

At the Forex currency market Swiss Franc rate is traded upward on Thursday, and still remains in the range of 0.9084-0.9225.

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 0.9175, the pair USD/CHF will go to 0.9160 и 0.9150.

Situation in Swiss economy remains unchanged this morning.

Attention today will be focused on the employment data in non-agricultural sector in Q3. 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 good considering global decline in demand and expensive Franc.

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 to Swiss National Bank estimates, 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.

 

[LF.Anastasia]

JPY: Japanese Yen is growing again

At the Forex currency market the Japanese Yen rate is growing again on Thursday after three days of decline. As usual bad news became a catalyst for the JPY growth,

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 has slowed down its growth in the neutral zone and is still maintaining a buy signal.

Forex recommendations: in case of breakdown at the level of 77.10, the pair will go to 77.05 and 77.00.

Rating agency S&P said today that Japanese rating is going to be revised soon, as financial situation in the country is deteriorating every day. According to the economists of the Agency it is hardly probable that Japan will be able to avoid debt problems.

The Yen responded to the news with growth.

At a 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.

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%. 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.

 

[LF.Anastasia]

AUD: Australian Dollar is recovering

At the Forex currency market on Thursday the Australian Dollar rate stopped its protracted fall and is recovering now, while external background is neutral.

Forex forecast: MACD indicator for the pair AUD/USD has broken through the signal line from top to bottom and is still 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 0.9740, the pair will go to 0.9730 and 0.9720. As part of technical correction the pair can go to 0.9800.

Macro-economic background in Australia is quiet.

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.

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 the 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.

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.

The data released earlier showed that leading indicators index CB in Australia increased by 0.1% m/m in September against previous decline of 0.2% m/m. Corporate profit and exports of agricultural products were among the main drivers of the increase in the index. New statistics does not cancel downward pressure, and the main reason for this was caused by changes in prices for securities at the stock market.

 

[LF.Anastasia]

CAD: Canadian Dollar has a chance to regain from sales

At the Forex currency market the Canadian Dollar rate goes up today because of quiet external background and lack of activity at the trading floors.

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

Forex recommendations: in case of breakdown at the level of 1.0460, the pair will go to 1.0470 and 1.0490.

If upward breakdown does not take place, the pair will remain at the current levels. As part of correction the pair can go to 1.0380.

Earlier the head of the Bank of Canada Mr. Carney said that the regulator will maintain the rate at the level of 1% under the influence of the European developments. He believes that situation with European debt has deteriorated prospects of the global economy and spread panic in the financial markets. Taking into account the foregoing it is obvious that the program of providing help to the banks will be continued.

It became known at the end of last week that CPI increased by 0.2% (+2.9% y/y) in October against the forecast of growth of 0.1% (+2.7% y/y) The index was below the previous level of 3.1% y/y but remained within the range of 1-3% designated by the Bank of Canada. Last month, prices in Canada increased mostly for gasoline and food.

The Bank of Canada believes that country’s GDP will amount to 2.8% in 2011 (decline by 0.1% against the forecast in April), in 2012 it will be: 2.6% and in 2013: 2.1%. According to the Bank, export performance in Canada is weak, because low demand in the U.S. impedes progress in the index and expensive CAD also offers a challenge. The rise in the interest rate in Canada will directly depend on stability in economic growth.

Unemployment rate increased by 0.2% in October, up to the level of 7.3% versus the level of 7.1% in September. Full employment reduced by 71.7 thousand, part- time employment increased by 17.7 thousand. Overall rate of employment in Canada fell by 54 thousand last month against the growth of 60.9 thousand in September. After the release of this statistics representative of the Bank of Canada Harper noted that employment statistics fully reflects low confidence both in Canada and in the world; however labour sector is very volatile. According to information received earlier, Canadian companies are going to continue effective work in the future, by increasing volume of investments and creating new jobs; however not as fast as it had been announced earlier. The forecast for sales in 2012 has been lowered in the country; as a result, local producers had to temper their personal forecasts. According to the estimates of the Bank of Canada, sentiment of the leaders of the large companies fell down compared with the summer period, since top management expects the decrease in the U.S. GDP and conservation of uncertainty in respect to global economic outlooks.

 

[LF.Anastasia]

EUR/USD: Euro is being sold out again

The pair EUR/USD is traded downward at the Forex currency market on Friday morning.

By 9.25 the Euro is at 1.3311 against yesterday’s closing level of 1.3315.

The motive for the sale was markets’ concerns about developments in Europe. Thus, yesterday rating agency Fitch downgraded the rating of Portugal, maintaining “negative” forecast, for the reason that presently there are no positive prospects in the economy. It also became known this morning that agency Moody’ downgraded rating of Hungary with the “negative forecast” as well. Earlier Hungary asked for financial aid from IMF ”just in case”

In addition, investors started to talk again that there is a chance of increasing capital reserve requirements for those banks that forgave half of the Greek debt. It is also possible that Eurozone will need about 106 billion euro to recapitalize of 70 large banks of the region.

Most likely, the pair EUR/USD will not go beyond the range of 1.3290-1.3380 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound tends to decline to new lows

At the Forex currency market the British Pound Sterling rate is traded downward, approaching new local lows at the end of this week.

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

Forex recommendations: in case of break down at the level of 1.540, target for sale will be the levels of 1.5430 and 1.5420.

The British Pound is still under pressure, as Great Britain suffers seriously from the European debt crisis. There is practically no interest in risk among investors which is quite natural considering current situation.

In addition, the “Independent” informed on Friday that British Budget Committee intends to lower the forecast on labour market because a number of jobs in the private sector is going to be less than expected.

Representative of the Bank of England, a former “Hawk” noted that inflation rate will drop sharply next year; however the Bank of England will continue to stimulate economy. It is interesting that all monetary politicians are pretty positive that CPI will fall sharply, but no one has specified what factors will trigger these radical changes in the situation.

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.

Discussion about levels of incentives and interest rates is still going on in Great Britain. Representative of the Bank of England Miles said earlier that with the development of the recovery process in 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.

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