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[LF.Anastasia]

CHF: Swiss Franc goes up after this week’s decline

At the Forex currency market Swiss Franc rate goes up on Friday, smoothing over previous sales. Franc’s investors relaxed after neutral meeting of SNB where the Bank clarified its current position of non-interference.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and started to go up, giving a buy signal. Stochastic Oscillator tends to leave overbought zone and started to shape a sell signal.

Forex recommendations: in case of break down at the level of 0.9370, the pair USD/CHF will go to 0.9360 and 0.9330. If upward breakdown does not take place, the pair will consolidate at the current levels.

So, the outcome of the meeting of Swiss National Bank, which has been expected so eagerly by players, was neutral. Three-month Libor rate was left in the range of 0-0.25%, closer to zero; the Bank did not change pegging level of Franc to Euro, maintaining the actual level of 1.20.

In the follow up comments the head of SNB Mr. Hildebrand stressed that the regulator will continue to preserve the target rate of CHF, using for this purchases of foreign currency in unlimited quantities and additional package of measures if situation requires. SNB is ready to maintain high level of liquidity, as inflation growth is not expected. In general, economy of the country depends a lot on the European crisis.

Apparently SNB adopted the attitude of an onlooker, keeping in place existing management tools, deciding fairly that they can intervene at any time.

Earlier, Switzerland had awakened interest of players by block of statistics. Thus, retail sales decreased by 0.2% y/y in October against a decline of 1.4% y/y earlier. GDP 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 on quarterly basis was positive, indicating that efforts of the Central Bank to curb the rates of the Franc are effective. Statistics of this week showed that unemployment rate in Switzerland remained at the level of 3.1% in November. In addition, CPI fell by 0.2% m/m in November, while expected growth had been of 0.1%. Inflation is clearly affected by external background.

Earlier, SECO released economic forecast, according to which economic growth in Switzerland will amount to 0.5% in 2012 against the previous expectations of growth of 0.9%.

As per 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: Japanese Yen completes this week with neutral trades

At the Forex currency market the Japanese Yen rate is traded slightly upward on Friday.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and is moving slowly along the signal line, not giving a clear signal. Stochastic Oscillator has come out of the overbought zone and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 77.70, the pair will go to 77.50 and 77.20 If downward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background is stable in Japan this morning.

Statistics released today showed that business sentiment in Japan deteriorated: Study from Tankan indicates that index of large producers amounted to -4 points in Q4 against preliminary +2 points and the forecast of March has shifted to -5 points against previously predicted +4. This is a negative signal for the prospects of Japanese economy.

Real GDP in Japan was revised downward to +1.4% q/q (+5.6% y/y) in Q3 against preliminary +1.5% q/q (+6.0% y/y). New block of statistics showed that surplus of current account in Japan amounted to Y562.4 billion in October, demonstrating a fall of 62.4% y/y. Morning statistics also showed that volume of credit outstanding in the country increased by 0.2% y/y last month. It indicates the increase in demand for corporate financing and can be perceived positively. Level of bank lending is also growing steadily (+0.2% y/y in November: +0.1% y/y in October; -0.3% y/y in September).

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by 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. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the “fly-through mode” presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

The data released this week showed that consumer confidence index in Japan fell for the first time in 7 months in November (38.1 against 38.6 previously), as global economy significantly affects Japan and its expensive Yen as well.

 

[LF.Anastasia]

AUD: Australian Dollar is rushing towards parity level

At the Forex currency market the Australian Dollar rate is traded upward on Friday, approaching to a parity level in pairing with the USD. The level 1.0000 looks important for the pair; however it is doubtful at the moment that the AUD can maintain above parity level for a long time.

Forex forecast: MACD indicator for the pair AUD/USD has merged with the signal line and is not giving a clear signal. Stochastic Oscillator is coming out of the oversold zone and starts to shape a weak buy signal.

Forex recommendations: in case of breakdown at the level of 1.0000, the pair will go to 1.0020 and 1.0050.

The end of the week is quite and calm in Australia. The rate of AUD is growing as part of technical rebound after significant sales this week.

According to released statistics, inflationary expectation in Australia reduced to 2.4% in December against preliminary level of 2.5%, as per Melbourne University. MI stated in the comments:”Decline in inflationary expectations reflects consumers’ concern about worsening international situation”. The decrease in CPI is logically associated with slowdown in the rate economic development.

Unemployment rate increased to 5.3% in November against the forecast of 5.2%. Employment rate fell by 6 thousand against the growth of 16.8 thousand earlier. The indicator reflects the impact of European debt problems on the Australian economy. Retail sales in Australia increased to the minimum value of +0.2% m/m over 4 months in October. In September the index rose by 0.4%, and by 0.6% in August. Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. This data is positive at the moment as current conditions have stabilized; however levels of business confidence are still unvaried. It became known yesterday that trade balance in Australia fell to +A$1.60 billion in October against expectations of +A$2.0 billion. Slump in the global demand has played its part here as well.

At the last meeting, the Reserve Bank of Australia announced that interest rate was lowered by 25 basis points, to 4.25% per annum. In the follow-up comments the RBA said that currently, inflationary forecast enables to decrease the rate gradually because in 2012-2013 CPI will be probably in the range of 2-3%.

GDP in Australia rose by 1.0% q/q (+2.5% y/y) in Q3 against the forecast of growth of 0.8% on quarterly basis. The data on economic growth in Australia was based on the rise in consumer expenditures and investments in the mining industry. Note that earlier Australian authorities have revised forecast of GDP growth downward, to 3.5% in 2012. Previous forecast had been at 3.75%.

 

[LF.Anastasia]

NZD: New Zealand Dollar is being actively corrected

At the Forex currency market the New Zealand rate is traded slightly upward on Friday, the currency that is too oversold is trying to regain losses caused by pressure of “bears” this week.

Forex forecast: MACD indicator for the pair NZD/USD has shifted into sideways movement in the negative area and is not giving a clear signal. Stochastic Oscillator has come out of the oversold zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.7615 the pair will go to 0.7620 and 0.7630.

Macro-economic background in New Zealand is neutral.

Only at the end of the week the fact that the NZD is oversold became favourable for the currency; as soon as external background stabilized players begun purchases at the attractive levels, although only as a part of rebound.

Decision of the Reserve Bank of New Zealand last week was of no surprise to anyone. Interest rate was left at the level of 2.5% per annum, since its level has already been revised last month. In addition, the data released on Thursday showed that activity in the manufacturing industry fell by 1.4% q/q and remained unchanged on annual basis in Q3, against the fall of 0.7% in Q2, which is the consequence of slump in the world economy.

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. Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier. The NZD regained from this information due to pressure from sellers.

GDP 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. Permits to construct in New Zealand increased sharply by 10,0% in October against the fall of 1.3% y/y in September.

 

[LF.Anastasia]

EUR/USD: Euro have found another ground to decline

The pair EUR/USD is traded downward at the Forex currency market on Monday morning responding to the developments of the external background.

By 9.20 Moscow time the Euro is at 1.3004 against closing level of 1.3036 on Friday.

The reason for sales turned up from two directions: first of all rating agencies again paid attention on the situation in Eurozone. Thus, agency Fitch downgraded rating forecast of France to “negative” from “stable” giving warnings about possibility of a similar scenario for Belgium, Spain, Italy, Slovenia and a number of other countries, which rating is already at revision.

In addition, it became known this week about the death of the head of DPRK Chim Chen Ira; market avoids risks presently, due to some uncertainty in the future policy of North Korea. In response to this information South Korean Joint Chiefs of Staff stepped up combat readiness particularly on the border with North Korea.

The day is going to be quiet in terms of macro-statistics, as well, this will be a week before Christmas for Catholic countries.

Most likely the pair EUR/USD will not go beyond the range of 1.2980-1.3090 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound started this week with sales

At the Forex currency on Friday the British Pound Sterling rate is traded downward on Monday, amid gloomy external background.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is growing in the neutral zone and is giving a weak byy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5480, target for sales will be the levels of 1.5470 and 1.5460. If specified level is not broken down, the pair will consolidate at the current levels.

It became known today that house price index Rightmove in the UK fell by 2.7% m/m (+1.5% y/y) in December against preliminary level of -3.1% m/m (+1.2% y/y). Looking at the past performance of the index we can say that in the first 6 months of the year, house prices went up, however in the next six months volatility in the sector increased and the rise in October was smoothed over by the decline in November.

In 2011 British housing sector distinguished by both record low rates and tougher mortgage conditions.

The Bank of England announced earlier that average annual inflationary expectations reduced to 4.1% in November against 4.2% in August. At the same time, two-year inflationary expectations were at the level of 3.4% (3.5% previously)

It became known earlier that CPI in the UK increased by 0.2% m/m (+4.8% y/y) in November, as expected. British inflation slows down its pace, however the index is still too far from the target level of the Bank of England. The data released earlier showed that retail sales BRC in the similar trading floors of the UK fell by 1.6% y/y in November against the forecast of -0.5%. It was the lowest level of the index since May this year. Activity in the British construction sector declined in November, which was demonstrated by statistics released at the end last week.

According to Markit estimates, PMI CIPS amounted to 52.3 points in November against 53.9 points earlier; however dynamics in the sector of new houses is positive and upward trend in the sector can be interpreted as an indication of the future stabilization. In general, the latest data from Markit looks good and does not rule out prompt recovery of the economic sectors in the future. Minutes of the last meeting of the Bank of England will be released this week, and it will be interesting to know comments of the members of the MPC about prospects of inflation in the country.

 

[LF.Anastasia]

CHF: Swiss Franc regained from previous weakness

At the Forex currency market Swiss Franc rate is traded upward on Monday, continuing to regain from the collapse last week.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and continues to go up, giving a buy signal; volumes are above average. Stochastic Oscillator is traded downward in the neutral zone and is giving a sell signal.

Forex recommendations: in case of break down at the level of 0.9350, the pair USD/CHF will go to 0.9340 and 0.9330. If upward breakdown does not take place, the pair will consolidate at the current levels.

By the beginning of this week, Swiss Franc almost completely regained from losses of the past five trading days.

Swiss National Bank was the main newsmaker last week. The meeting of Swiss National Bank, which had been expected so eagerly by players, was neutral. Three-month Libor rate was left in the range of 0-0.25%, closer to zero; the Bank did not change pegging level of Franc to Euro, maintaining the actual level of 1.20. In the follow up comments the head of SNB Mr. Hildebrand stressed that the regulator will continue to preserve the target rate of CHF, using for this purchases of foreign currency in unlimited quantities and additional package of measures if situation requires. SNB is ready to maintain high level of liquidity, as inflation growth is not expected. In general, economy of the country depends a lot on the European crisis.

Apparently, SNB has adopted attitude of an onlooker, keeping in place existing management tools, being pretty confident that they can start intervention any time.

Earlier, SECO released economic forecast, according to which economic growth in Switzerland will amount to 0.5% in 2012 against the previous expectations of growth of 0.9%.

As per 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. Retail sales fell by 0.2% y/y in October against a decline of 1.4% y/y earlier. GDP 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 on quarterly basis was positive, indicating that efforts of the Central Bank to curb the rates of the Franc are effective. Statistics of this week showed that unemployment rate in Switzerland remained at the level of 3.1% in November. In addition, CPI fell by 0.2% m/m in November, while expected growth had been of 0.1%. Inflation is clearly affected by external background.

 

[LF.Anastasia]

JPY: Japanese Yen gives way to USD

At the Forex currency market the Japanese Yen rate is getting weaker at the beginning of the week, while the USD is absolutely popular in the role of the main safe currency.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator is going down in the neutral zone and is giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 78.00, the pair will go to 78.10 and 78.20. If upward breakdown does not take place, the pair will consolidate at the current levels.

There has not been any important Japanese news at the beginning of the week, although the Yen is getting weak even without fundamental grounds. Investors are not sure that European risks will not grow in proportion to the time, which has been wasted on the dialogues, therefore they try to rescue from potential losses in the USD which became a safe currency now.

According to released statistics business sentiments in Japan are deteriorating: Tankan study proves that index of large producers amounted to -4 points in Q4 against preliminary +2 points and the forecast of March has shifted to -5 points against previously predicted +4. This is a negative signal for the prospects of Japanese economy.

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by 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. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the “fly-through mode” presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

The data released this week showed that consumer confidence index in Japan fell for the first time in 7 months in November (38.1 against 38.6 previously), as global economy significantly affects Japan and its expensive Yen as well. Real GDP in Japan was revised downward to +1.4% q/q (+5.6% y/y) in Q3 against preliminary +1.5% q/q (+6.0% y/y). New block of statistics showed that surplus of current account in Japan amounted to Y562.4 billion in October, demonstrating a fall of 62.4% y/y. Morning statistics also showed that volume of credit outstanding in the country increased by 0.2% y/y last month. It indicates the increase in demand for corporate financing and can be perceived positively. Level of bank lending is also growing steadily (+0.2% y/y in November: +0.1% y/y in October; -0.3% y/y in September).

 

[LF.Anastasia]

AUD: Australian Dollar remains near lows of November

At the Forex currency market the Australian Dollar rate weakens on Monday, retreating under pressure from negative external background.

Forex forecast: MACD indicator for the pair AUD/USD started to move downward from the signal line in the negative area and is giving a sell signal. Stochastic Oscillator is coming out of the oversold zone and started to shape a weak buy signal.

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 0.9960 and 0.9980.

In terms of macro-economic, situation in Australia remains unchanged. The rise of the AUD at the end of last week was triggered just by technical signals and now the AUD is losing positions again under pressure from external background. As expected, it was extremely difficult for the AUD to reach parity level and maintain its ascending position.

GDP in Australia rose by 1.0% q/q (+2.5% y/y) in Q3 against the forecast of growth of 0.8% on quarterly basis. The data on economic growth in Australia was based on the rise in consumer expenditures and investments in the mining industry. Note, that earlier Australian authorities have revised forecast of GDP growth downward, to 3.5% in 2012. Previous forecast had been at 3.75%.

According to released statistics, inflationary expectation in Australia reduced to 2.4% in December against preliminary level of 2.5%, as per Melbourne University. MI stated in the comments:”Decline in inflationary expectations reflects consumers’ concern about worsening international situation”. The decrease in CPI is logically associated with slowdown in the rate economic development.

Unemployment rate increased to 5.3% in November against the forecast of 5.2%. Employment rate fell by 6 thousand against the growth of 16.8 thousand earlier. The indicator reflects the impact of European debt problems on the Australian economy. Retail sales in Australia increased to the minimum value of +0.2% m/m over 4 months in October. In September the index rose by 0.4%, and by 0.6% in August. Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. This data is positive at the moment as current conditions have stabilized; however levels of business confidence are still unvaried. It became known yesterday that trade balance in Australia fell to +A$1.60 billion in October against expectations of +A$2.0 billion. Slump in the global demand has played its part here as well.

 

[LF.Anastasia]

NZD: New Zealand Dollar is on sale again

At the Forex currency market the New Zealand rate is traded downward on Monday, as traders do not want to take risk, amid aggravations in the external background.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and resumed its decline, giving a sell signal. Stochastic Oscillator is going up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.7590 the pair will go to 0.7580 and 0.75700.

It became known today that business activity index in the service sector amounted to 56.6 points in November, as per BNZ estimates, against preliminary level of 51 points; thus the index has reached twenty-month highs now. The report also showed that new orders of companies and enterprises, as well as sales became a catalyst for activity. Activity in the index was recorded in the four major regions of the country for the first time this year.

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 it was higher than 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. Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier. The NZD regained from this information under pressure from sellers.

GDP 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. Permits to construct in New Zealand increased sharply by 10,0% in October against the fall of 1.3% y/y in September.

Decision of the Reserve Bank of New Zealand last week was of no surprise to anyone. Interest rate was left at the level of 2.5% per annum, since its level has already been revised last month. In addition, the data released on Thursday showed that activity in the manufacturing industry fell by 1.4% q/q and remained unchanged on annual basis in Q3, against the fall of 0.7% in Q2, which is the consequence of slump in the world economy.