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[LF.Anastasia]

AUD: Australian Dollar has grown up taking advantage of stability

At the Forex currency market the Australian Dollar rate is being traded upward in the middle of the week for the second consecutive day; on the one hand stable external background and positive sentiment of players encourage purchases, on the other hand, the levels at the beginning of the week are really attractive for the buyers.

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 going up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0190, the pair will go to 1.0200 and 1.02300. The growth is based emotional nature.

Statistics released today showed that leading indicator index Westpac-MI in Australia increased to ***.2 points (+0.4 points) in October. The data reflects the pace of economic activity in the next 3-9 months; index has increased on monthly basis, however it is sliding down on annual basis (2.6% against 2.8% earlier). This is a signal that business activity in the country may decline in the coming months.

As it was noted by Australian Central Bankon Tuesday, the country is fighting off repercussions of European debt crisis with the help of investment boom: minutes of the last meeting of the Reserve Bank of Australia showed that there is no urgent need at the moment in lowering rate and current steps directed to ease monetary policy is sufficient to support economy.

Observers believe that lowering of the rate of RBA in December was just a safeguard against external negative factors.

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]

CAD: Canadian Dollar is recovering in the middle of the week

At the Forex currency market the Canadian Dollar rate is traded upward on Wednesday, making use of growing oil prices and positive investors’ sentiments at the global capital markets.

Forex forecast: MACD indicator for the pair USD/CAD is going up in the positive area and maintains a buy signal, volumes are small. Stochastic Oscillator is going down in the neutral zone giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.025, the pair will go to 1.0240 and 1.2000.

It became known yesterday that CPI in Canada increased by 0.1% m/m (+2.9% y/y) which agreed with forecast. Expectations have been justified. Growth is in the permissible range and risks for economy are not expected from this side.

Unemployment rate in Canada increased by 0.1% in November, up to 7.4%, while the number of employees reduced by 18 thousand. Moreover, share of labour force decreased by 0.1%, to 66.6% last month. GDP in Canada rose by 3.5% y/y in Q3 against the revised decline of 0.5% in April-June.

Economists predicted growth of 3%. 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.

It became known in December that the regulator left interest rate unchanged at the level of 1% per annum. The news did not become a surprise for the players, as investors had assumed that interest rate would be kept at the current levels for a least another 12 months. In the follow-up comments the Bank of Canada said that the impact of recession in the global economy can be projected onto the Canadian economic system and that through the fault of Eurozone conditions at the global financial platforms have deteriorated sharply.

The head of the Bank of Canada Mr. Carney said commenting on the last week’s EU summit that he did not have any illusions in regards of the efficiency of the measures proposed by European Union. Apparently monetary politician thinks that actions of the EU are insufficient in the current situation.

Earlier Carney noted that Canadian enterprises and companies shall become the mover of economic growth in the country and it would be better for the households to reduce the level of debts.

 

[LF.Anastasia]

EUR/USD: Euro’s rally did not last for long

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

By 9.15 Moscow time the Euro is at 1.3042 against yesterday’s closing level of 1.3046.

Rally in the pair took place only in the morning, starting from noon the growing momentum begun to fade, since the news release did not demonstrate any positive data. At the same time, players ignored positive statistics on sales in the U.S. housing secondary market.

It became known today that rating agency S&P downgraded the rating of Hungary by one notch, to BB+ and gave a warning of another downgrade in the coming year. Earlier Hungary asked for financial aid from EU and IMF “just in case”, reasoning this request by negative environment.

Starting from tonight, activity in the currency market will begin to drop; celebration of Catholic Christmas will take place next weekend and a week later there will be New Year holiday. The fact that it is the end of the year will not help to create conditions for activity in the trades.

Most likely the pair EUR/USD will not go beyond the range of 1.3000-1.3090 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound tends to continue its growth

At the Forex currency market on Thursday the British Pound Sterling rate is traded slightly upward, in anticipation that the growth will be continued.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is giving a buy signal, while volumes are average. Stochastic Oscillator is growing in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.5680, target for buying will be the levels of 1.5690 and 1.5700. Meanwhile, buying is of a corrective nature.

Macro-economic background in the UK is neutral this morning.

It became known yesterday that consumer confidence GFK/NOP in the UK declined to-33 points in December against the level of -31 points in November. Judging by small real expenditures and low income of households, the British are getting more conscious about spending. Index is still at 35-year lows and presently regarded as a negative indication.

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).

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. 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 in the statistics released at the end last week.

Great Britain is still trying to keep away from European debt problems: yesterday, during discussions of ways to increase International Monetary Fund with the help of collective contributions, London stated that it would announce its decision at the beginning of 2012.

Minutes of the last meeting of the Bank of England has been released this week: according to the document all members of the IFA (ratio 9-0) voted for maintaining interest rate at the current level. In addition, the Committee believes that changes in the program of assets purchases will not bring significant benefits; however, if inflation does not subside the increase in the volume of the assets purchase program can be required. Sharp decrease of inflation is still expected in the first 6 months of 2012, the prospects of CPI in the next 6 months look more blurry.

 

[LF.Anastasia]

CHF: Trades of Swiss Franc are fluctuating

At the Forex currency market on Thursday Swiss Franc rate is changing movement direction once again

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is going down, giving a sell signal. Stochastic Oscillator is pushing away from the oversold zone and starting to grow in the neutral zone and giving a buy signal.

Forex recommendations: in case of break down at the level of 0.9240, the pair USD/CHF will go to 0.9230 and 0.9210. If downward breakdown does not take place, the pair will consolidate at the current levels.

Swiss National Bank noted yesterday that the regulator is prepared to take additional measures if situation at Forex deteriorates. According to SNB, strong Franc creates extra problems for the economy and the issue of negative interest rates and control over the capital movement is being thoroughly scrutinized in the Bank.

It became known earlier that trade balance in Switzerland rose by 3.0 billion francs in November against the forecast of +2.00 billion francs and previous value of +2.15 billion francs. Index is favourable, however it is based on the efforts of the local regulator to curb the rate of the Franc.

In other respects, macro-economic background is stable. 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 maintain the target rate of CHF, with the help of 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.

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: Strengthening of Japanese Yen has been prevented

At the Forex currency market the Japanese Yen rate is traded slightly upward on Thursday in response to investors’ interest in “safe harbours”. However, general trend in the currency remains unchanged, JPY is still under pressure.

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 up in the neutral zone and is giving a moderate buy signal.

Forex recommendations: in case of breakdown at the level of 78.15, the pair will go to 78.30 and 78.40. If upward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background in Japan is stable.

Statistics released earlier was negative. Japanese statistics is negative today. Trade balance deficit amounted to Y684.7 billion in November against the forecast of -Y442.4 billion; at the same time exports decreased by 4.5% y/y in November, while imports increased by 11.4% y/y. It is getting more difficult for Japan to maintain economic growth rate, as both, significant weakness of the world economy and strong Yen complicates the process.

Yesterday’s meeting of the Bank of Japan was gloomy. Thus, the regulator noted that growth of economic activity has slowed down and activity in Japanese economy is zero. The Bank has revised economic situation assessment downward in comparison with November, which is logical. Japanese economy will start to recover as soon as pressure from Europe diminishes.

In addition, interest rate in the country was left unchanged at the level of 0.1%. This decision had been expected.

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.

Finance Minister of Japan Mr. Azumi has noted yesterday that markets have trust in the USD. Declaration about intention of Japan to buy Chinese bonds was of interest. Azumi said that final decision has not been adopted yet and prospects of assets purchase should not be interpreted as a complete abandonment of dollar’s investments. On the other hand it is quite clear that Japan takes preventive measures in the hope of protecting the country from risks in the future.

 

[LF.Anastasia]

AUD: Australian Dollar still hopes to continue ascending trend

At the Forex currency market the Australian Dollar rate continues to grow moderately on Thursday, which makes relative activity in the market possible.

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 going up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0100, the pair will go to 1.0120 and 1.0130.

Macro-economic background in the country has not changed on Thursday.

Statistics released this week showed that leading indicator index Westpac-MI in Australia increased to ***.2 points (+0.4 points) in October. The data reflects the pace of economic activity in the next 3-9 months; index has increased on monthly basis, however, it went down on annual basis (2.6% against 2.8% earlier). This is a signal that business activity in the country may decline in the coming months.

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.

As it was noted by Australian Central Bankon Tuesday, the country is fighting against repercussions of European debt crisis with the help of investment boom: minutes of the last meeting of the Reserve Bank of Australia showed that there is no urgent need at the moment in lowering rate and current steps directed to ease monetary policy is sufficient to support economy.

Observers believe that lowering of the rate of RBA in December was just a safeguard against external negative factors.

 

[LF.Anastasia]

NZD: New Zealand Dollar is waiting for new catalyst to start growing

At the Forex currency market on Thursday the New Zealand rate is traded slightly upward in response to positive New Zealand statistics this morning; however external catalysts are required for a more significant rise.

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 0.7700, the pair will go to к 0.7720 and 0.7740. There is a high chance of rebound.

It became known today that GDP in New Zealand increased by 0.8% q/q in Q3 (+1.9% y/y) against the forecast of +0.6% on quarterly basis. Significant support to the economy of New Zealand was provided by Rugby Championship which attracted a lot of investments into the country. 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, however has revived later. Most likely the data in Q4 will be weaker.

It became known this week 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. In addition, the rise in activity was recorded in the four major regions of the country for the first time this year.

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.

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.

 

[LF.Anastasia]

EUR/USD: Euro is growing moderately in advance of Christmas

The pair EUR/USD is traded slightly upward at the Forex currency market on Friday morning in response to positive U.S. news.

By 9.15 Moscow time the Euro is at 1.3069 against yesterday’s closing level of 1.3051.

The U.S. macro-economic data, released last night, was in general positive, except for the revised GDP of the country in Q3, which went downward. This news helped the pair to strengthen, however external background again brought some nasty surprises.

Thus, it became known today that agency S&P downgraded rating of the Bank Goldman to A+, and agency Moody’s revised the rating of Slovenia downward up to A1 with a “negative” forecast.

It seems unlikely that the day will be too active today, as Catholic Christmas is ahead after which investors normally do not conduct serious deals until the end of the year.

Most likely the pair EUR/USD will not go beyond the range of 1.3000-1.3090 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is growing at the end of the week

The British Pound Sterling is traded upward at the Forex currency market on Friday morning in response to investors’ favourable sentiment in advance of Christmas.

Forex forecast: MACD indicator for the pair GBP/USD is traded upward in the negative area and is giving a buy signal, while volumes are average. Stochastic Oscillator is growing in the neutral zone and is giving a similar signal, however it is ready to shift into sideways movement.

Forex recommendations: in case of breakdown at the level of 1.5700, target for buying will be the levels of 1.5710 и 1.5730.

Activity in the currency is minimal today, which is logical in advance of the Catholic Christmas. Most likely we are not going to see anything fundamentally new in the pair until New Year.

Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3, yesterday’s statistics supported buyers. The index is above preliminary assessment, which was appreciated in the market.

Great Britain still tries to keep away from European debt problems: yesterday, during discussions of ways to increase International Monetary Fund with the help of collective contributions, London stated that it would announce its decision at the beginning of 2012. Minutes of the last meeting of the Bank of England has been released this week: according to the document all members of the IFA (ratio 9-0) voted for maintaining interest rate at the current level. In addition, the Committee believes that changes in the program of assets purchases will not bring significant benefits; however, if inflation does not subside, the increase in the volume of the assets purchase program can be required. Sharp decrease of inflation is still expected in the first 6 months of 2012, the prospects of CPI in the next 6 months look more blurry.

It is also worth noting that the Bank of England expects stagnation in the economy in the next quarter and GDP growth in Q1 next year.

It became known earlier that consumer confidence GFK/NOP in the UK declined to-33 points in December against the level of -31 points in November. Judging by small real expenditures and low income of households, the British are getting more conscious about spending. Index is still at 35-year lows and presently regarded as a negative indication.

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).

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. 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.