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[LF.Anastasia]

AUD: Sellers of Australian Dollar are back

At the Forex currency market the Australian Dollar rate is traded downward on Wednesday, as external background remains mixed and advantages of internal news have already been used by investors.

Forex forecast: Earlier 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 is going up in the neutral zone and is giving a clear buy signal, approaching overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9950, the pair will go to 0.9940 and 0.9910. If interest in risk rises the pair can go above 1.0000 again.

Fiscal situation in the country is ambiguous: morning statistics showed that lending in the private sector of Australia increased by 0.2% m/m (+3.5% y/y) in October against the forecast of growth of 0.4% m/m. Previous block of statistics demonstrated that leading indicators index CB in Australia increased by 0.1% m/m in September against a 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.

It became known yesterday that Australian authorities revised forecast for GDP growth in 2012 downward, to 3.5%. Previous forecast was at 3.75%

The head of the Reserve Bank of Australia Mr. Stevens stressed earlier that Europe and its leaders have to hurry up to resolve their problems. According to export statistics, Australia and its economy is seriously affected by the slump in global demand.

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.

It also became known that rating agency Fitch upgraded rating on Australia’s obligations in foreign currency to the level of AAA from the previous notch of AA+, for the reason of positive revision of the levels of public debts which are now slightly above 26%.

 

[LF.Anastasia]

NZD: New Zealand Dollar is losing positions because of decline in interest to risk

At the Forex currency market the New Zealand Dollar rate goes down on Wednesday along with major currency pairs due to decline of investors’ 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; volumes are maximal. Stochastic Oscillator has left oversold zone and is giving a clear buy signal.

Forex recommendations: in case of breakdown at the level of 0.7595, the pair will go to 0.7600 and 0.7620. There is a high probability that aggressive sellers will be back in the pair.

Statistics of the middle of the week showed that permits to construct in new Zealand increased sharply by 10,0% in October against the fall of 1.3% y/y in September. The data is positive; however the NZD has ignored this information.

It became known this week that the party of the current prime-Minister John Kay won the elections, which supported growth of the NZD, as investors have received a confirmation that current monetary policy will be pursued.

It became known earlier that trade balance in New Zealand was at the level of –NZ$*** million in October against the level of NZ$784 million in September. The index remained in deficit last month although higher than the forecasts of economists. Volumes of export increased by 5.3% (NZ$3.9 billion on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production.

Statistics released this week showed that business confidence NBNZ amounted to +18.3 points in November against the level of +13.2 points in October. According to business estimates business outlooks shall become better soon, at least as indicated by statistics. As per previous statistics, volume of retail sale 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. The data released earlier showed that annual inflationary expectations in New Zealand declined to 2.72% in Q4 against the level of 2.94% a quarter earlier. This became another indication that economy of the country decelerates its growth rates.

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 continues to grow due to strong catalyst

The pair EUR/USD keeps on growing at the Forex currency market on Thursday morning, continuing yesterday’s trend.

By 9.15 Moscow time the Euro is at 1.3461 against yesterday’s closing level of 1.3432.

Yesterday the U.S. Federal Reserve reported that agreement has been reached with the ECB, banks of Canada, Japan, England and Switzerland to lower interest rates on dollar swops by 50 basis points. Agreement will come into force on 5 December. Currently the swop rate amounts to 100 basis points. Theoretically, this measure will help to increase USD liquidity at the market which shall slightly stabilize situation. Naturally, this step will not resolve systematic problems.

In any event, world’s central banks make it clear for the markets that they are determined to continue actions to stabilize monetary situation.

Investors’ attention today will be drawn to the data on the U.S. labour sector.

Most likely the pair EUR/USD will not go beyond the range of 1.3410-1.3490 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound has lost growing momentum

At the Forex currency market the British Pound Sterling rate is traded with minimal deviation on Thursday.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic oscillator continues to go up in the neutral zone and has reached the border of the overbought zone already, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.5700 the target for the buying will be the levels of 1.5720 and 1.5740. If sellers are back for the pair, the Pound can move to 1.5645.

Yesterday’s rapid growth of the Pound was based on the decision of the U.S. Federal reserve together with the world’s Central banks (including the Bank of England) to lower swop rates by 50 basis points. External background is not so clear today, as illustrated by the trading pair GBP/USD.

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.

Representative of the Bank of England Mr. Weale believes that economy of the country will not reach pre-crisis levels until Q3 2013, and growth of capital will support consumption. He believes that monetary policy alone cannot fix up economy and there is a high possibility that QE will be launched if the state of economy does not improve after the first round of stimulation. Weale also indicated that there are signs of new recession.

The head of the Bank of England Mr. King said earlier that inflation will go down considerably, as slow growth of wages and spare capacity of the economy are currently making progress in this direction. In the next 6 months however, drastic changes cannot be expected: CPI will remain in the channel of the existing rates. This is the first time in the last few months when supposition about reduction of the inflation level has been made. Representative of the Bank of England, a former “Hawk”, Mr. Dale noted that inflation rate would drop sharply next year; meanwhile the Bank of England would continue to stimulate economy.

 

[LF.Anastasia]

CHF: Swiss Franc strengthens again

At the Forex currency market Swiss Franc rate is traded upward at the Forex currency market on Thursday in response to the initiative of the U.S. federal reserve which has been supported by Swiss National Bank too.

Forex forecast: MACD indicator for the pair GBP/USD is in the positive area and started to go down, giving a sell signal; volumes are decreasing at the same time. Stochastic Oscillator continues to decline in the neutral zone, giving a sell signal.

Forex recommendations: in case of break down at the level of 0.9110, the pair will go to 0.9100 and 0.9080. If downward breakdown does not take place, the pair will consolidate at the current levels.

It became known today that GDP in Switzerland rose by 0.2% q/q (+1.3% y/y) in Q3 against the forecast of growth of 0.1% q/q (1.7% y/y). The data was positive on quarterly basis indicating that efforts of the Central Bank to curb the rates of the Franc are effective.

According to the 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.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. It became known last week 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 slump in demand and expensive Franc.

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 had taken place earlier, was caused by high exchange rate of Swiss Franc.

Trade surplus in Switzerland 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.

 

[LF.Anastasia]

JPY: Japanese Yen has suspended its growth once again

At the Forex currency market the Japanese Yen rate weakens again on Thursday after two sessions of growth this week. Medium -term channel for the pair is still uncertain due to ambiguous external factors. Meanwhile, demand for the JPY as a protective currency is minimal.

Forex forecast: MACD indicator for the pair USD/JPY begun to grow in the positive area and is giving a buy signal. Oscillator continues to decline slowly 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 77.70, the pair will go to 78.10 and 78.30. If upward breakdown does not take place, the pair has a chance to return to 77.40.

Macro-economic situation in Japan has not changed fundamentally this morning.

Statistics released yesterday showed that orders in the construction sector of Japan amounted to +24.3% y/y in October. In addition, preliminary industrial output rose by 2.4% m/m (+0.4% y/y) in October against the forecast of +1.1% m/m. nevertheless not everything is so positive: PMI in the manufacturing industry declined to 49.1 points in November, as per Markit/JMMA estimates, against the level of 50.6 points in October.

Another “fly in the ointment” came from rating agencies: Japanese agency R&I forwarded AAA rating of country for the review with probability of downgrade.

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

The head of the Bank of Japan Mr. Shirakawa noted this week that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was caused by the European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective.

It became known earlier that unemployment rate in Japan increased to 4.5% in October against the level of 4.1% in September, while expectations were at 4.2%. The rate is increasing for the first time in three months, which is an indication of a new round of slowdown in Japanese economy. Large funds have been invested into Japanese economy following the earthquake in March, which explains fairly rapid recovery; however the rate of recovery started to decelerate lately. It should be closely tracked to what extent European economic slump would affect Japanese economy.

 

[LF.Anastasia]

AUD: Statistics has prevented growth of Australian Dollar

At the Forex currency market the Australian Dollar rate stopped its steady growth that had been observed earlier, and begun to decline under pressure of poor statistics.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is shifting into sideways, not giving a clear signal. Stochastic Oscillator has come into overbought zone and is moving along the signal line, maintaining a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0210, the pair will go to 1.0220 and 1.0240. If negative factors intensify, the pair can go down to 1.0150.

It became known today that retail sales in Australia increased to the highest value of +0.2% m/m over 4 months. In September the index rose by 0.4%, and by 0.6% in August.

This data upset investors who are concerned that such precarious balance in the economy can be disturbed.

Fiscal situation in the country is ambiguous: previous statistics showed that lending in the private sector of Australia increased by 0.2% m/m (+3.5% y/y) in October against the forecast of growth of 0.4% m/m. Previous block of statistics demonstrated that leading indicators index CB in Australia increased by 0.1% m/m in September against a 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.

It became known earlier that Australian authorities revised forecast for GDP growth in 2012 downward, to 3.5%. Previous forecast was at 3.75%

Rating agency Fitch upgraded rating on Australia’s obligations in foreign currency to the level of AAA from the previous notch of AA+, for the reason of positive revision of the levels of public debts which are now slightly above 26%.

The head of the Reserve Bank of Australia Mr. Stevens stressed earlier that Europe and its leaders have to hurry up to resolve their problems. According to export statistics, Australia and its economy is seriously affected by the slump in global demand.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.

 

[LF.Anastasia]

CAD: Canadian Dollar still tends to grow

At the Forex currency market the Canadian Dollar rate is traded slightly upward on Thursday, with the help of general interest in risk and stable oil prices.

Forex forecast: MACD indicator for the pair USD/CAD is in the positive area and is moving along the signal line, not giving a clear signal while volumes are average. Stochastic Oscillator remains in the overbought zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0200, the pair will go to 1.0190 and 1.0170.

It became known yesterday that GDP in Canada increased by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the indicator by 3%.

Canadian monetary politician Mr. Flaherty noted this week that situation in the world economy would not change until Europe allocates more resources to fight against crisis. He shares point of view of German politicians and IMF that lost time will cost expensive price to Eurozone.

Worth noting statistics of the week is that prices for industrial goods reduced by 0.1% m/m in October while growth of 0.1% had been expected. Prices for raw materials fell by 1.2% m/m in October against the forecast of +1.0%.

CPI rose by 0.2% (+2.9% y/y) in October against the forecast of growth of 0.1% (+2.7% y/y). The indicator was below the previous level of 3.1% y/y, however within the range of 1-3% specified 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.


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. The bank of Canada along with other largest world’s banks supported the idea of the U.S. FR to lower swop interest rates which will enable to increase liquidity of the USD at the market and stabilize monetary situation.

 

[LF.Anastasia]

GBP: British Pound is growing despite ambiguous signals

The British Pound Sterling rate continues to grow at the Forex currency market, although activity in the pair is low.

Forex forecast: MACD indicator for the pair GDP/USD has broken through the signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic Oscillator continues to go up in the neutral zone and has already reached the border of the overbought zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.5715 the target for the buying will be the levels of 1.5720 and 1.5740. If sellers are back in the pair, the Pound may move to 1.5645.

It became known yesterday that PMI index in the manufacturing industry amounted to 47.6 points in November, as per CIPS/MARKIT estimates. The index is above expectations which supported growth of the Pound.

Previous rapid growth of the Pound was based on the decision made by the U.S. Federal Reserve together with the world’s Central banks (including the Bank of England) to lower the rates on swop by 50 basis points. Later the governor of the Bank of England Mervyn King said that he personally, as the head of the Eurogroup initiated discussion of the idea on swops. He believes that adopted measures will bring temporary relief, however will not enable to resolve fundamental problems.

It also became known this week that rating agency Fitch did not excluded probability that the UK ranking could be downgraded, as national budgetary reserves of the country have been rather depleted. The agency believes that economic growth rate in the UK will slow down and influence of the European debt crisis will increase, which will eventually challenge current rating of the country.

Representative of the Bank of England Mr. Weale believes that economy of the country will not reach pre-crisis levels until Q3 2013, and growth of capital will support consumption. He believes that monetary policy alone cannot fix up economy and there is a high possibility that QE will be launched if the state of economy does not improve after the first round of stimulation. Weale also indicated that there are signs of new recession.

According to 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 has lost support

Swiss Franc rate is traded downward at the Forex currency market after statement of Swiss government.

Forex forecast: MACD indicator for the pair GBP/USD is in the positive area and started to go down, giving a sell signal; volumes are decreasing at the same time. Stochastic Oscillator slows down its decline in the neutral zone, maintaining a sell signal.

Forex recommendations: in case of break down at the level of 0.9150, the pair USD/CHF will go to 0.9140 and 0.9130. Due to return of the “bulls” in the pair the target for the rise can be 0.9225

On Thursday Swiss government stated that they are prepared to lower interest rate to negative levels in order to use all available means to fight against the rise of Franc. At the same time, politicians noted that the most effective tools are in the hands of SNB.

Franc responded to the news by sharp decline.

It became known yesterday that GDP in Switzerland rose by 0.2% q/q (+1.3% y/y) in Q3 against the forecast of growth of 0.1% q/q (1.7% y/y). The data was positive on quarterly basis indicating that efforts of the Central Bank to curb the rates of the Franc are effective.

According to the 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.

Trade surplus in Switzerland 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.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. It became known last week 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 slump in demand and expensive Franc. 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 had taken place earlier, was caused by high exchange rate of Swiss Franc.