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[LF.Anastasia]

Forex Analytics of LiteForex of 09.08.10: CHF: Swiss Franc is being corrected following the growth earlier

At the Forex currency market on Monday Swiss Franc is traded downward in pairing with the USD, being corrected after a sharp bounce on Friday. Nevertheless the situation for the pair USD/CHF has not become clearer and the pair’s prospects are still vague.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF on Monday and it goes down, giving a pair sell signal. Stochastic Oscillator is giving a pair buy signal today.
Forex recommendations: off the board.
Feasible event scenario at Forex: in case of breakdown at the level of 1.0400, the pair will go to 1.0470 and 1.0540. If the pair exceeds the level of 1.0350, sellers’ targets will be 1.0300 and 1.0270.
The news that Swiss Minister of Finance Mr. Mertz intends to retire in the autumn can put pressure on the CHF to some extent. Job market data released on Friday has not affected trading considerably. The data (unemployment rate: 3.8% in July against 3.9% earlier) was quite positive and indicated labour market improvement; however it did not support Franc. “Although we expect that improvement at the labour market will be gradual, we forecast that unemployment rate will reach the level of 3.9% on average in 2010” stressed economist Fabia Hiller.
According to the data released earlier consumer activity indicator in Switzerland rose to 1.81 in June against the level of 1.71 a month earlier – UBS noted in the review that index growth was mainly activated by the increase in the number of the registered cars. However business activity index in Switzerland is still not the most optimistic.
Earlier Swiss National Bank presented monetary reserve data: the index reduced by 6.6 billion francs in June. Most likely it was caused by the assets revaluation, provoked by the national currency significant growth taken place recently. Released data suggests that SHNB did not carry out currency intervention in the first summer month. Earlier in May the Bank spent about 79 billion to buy EUR. Swiss National Bank interest rate is at the level of 25% currently and it was left untouched at the last SHNB meeting. Inflation forecast this year amounted to +0.9% (preliminary value: +0.7%), in 2011: +1.0% (preliminary value +0.9%), in 2012 – about +2.2%.
Strong СHF affects economy: imports are getting cheaper, which causes consumer goods prices reduction, which in its turn, impacts major Swiss importers.

However, according to Hildebrand, SHNB currently has enough assets to withstand even greater losses. An observer might doubt it as the SHNB currency reserves of 226.8 billion francs made the Bank extremely vulnerable.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.08.10: NZD: New Zealand Dollar is determining movement direction

At the Forex currency market this morning the New Zealand Dollar is determining its movement direction in the absence of the significant guideline.

Short term trend as well as medium term trend looks like trades in the range.

NZD/USD

Support levels: 0.7245, 0.7190.

Resistance levels: 0.7355, 0.7400.

Interest rate is at the level of 3.0% per annum in New Zealand now. Two weeks ago the Reserve Bank of New Zealand raised the interest rate for the second time at a run – to 25 basis points, then an interval in the sequence of the rises was announced. “Cessation of the further monetary incentive measures is appropriate. The pace and scope of the further rate increases is likely to be more moderate than anticipated in the June statement”, said the Head of the Bank, Alan Bollard in his comment. He stressed that previous NZD growth runs counter to the plans to mitigate New Zealand economy prospects. “Growth in the economies of our trading partners proved to be better than we predicted, however outlooks have worsened. Although prices of the raw materials are still high, they became more moderate”.
The data released last Thursday showed unexpected growth of unemployment rate in QII in New Zealand, therefore domestic demand in the country remains limited and economy does not receive additional support for the growth, as has been expected by the Reserve Bank of New Zealand.
Labour market growth in the country has apparently faced some difficulties, which the RBNZ passed over in silence while saying that pace of the interest rate increases will be moderate in the future. In this regard an interval in the chain of the interest rate increases can be long lasting.
Worth noting also that employment rate demonstrated reduction by 0.3% q/q in QII against the forecast of +0.4% and the previous level of +1.0%.

It became known earlier that number of construction permits in New Zealand reduced to 6.6% in QII against the level of 0.1% in QI. The data will have a major impact on both housing construction restoration in New Zealand in general and on the country’s entire economic growth. It is worth noting that poor data had been expected by the economists; however downside risks increased as soon as statistics had been released.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.08.10: CAD: Canadian Dollar is under pressure today

At the Forex currency market the Canadian Dollar is under pressure – this is the situation which has been going on since Friday when unexpectedly poor data on the Canadian labour market was released.

Short term trend for the pair USD/CAD seems upward, as well as the medium one.

Support levels: 1.0100, 1.0010.

Resistance levels: 1.0300, 1.0400.

Statistics released last week showed the labour market in Canada is not as strong as it seems to be. Jobs decreased by 9.3 thousand in July against the forecast of growth by 14 thousand. Unemployment rate in the country increased to 8.0% against the previous value of 7.9%.

Apparently Canadian employers overplayed their hand a month ago: employment rate in June amounted to 93.2 thousand – now companies fire employees, to play safe.

In June the Bank of Canada announced a decision to raise interest rate to 0.75% per annum which was the second consecutive rate increase. In spite of positive development, the last comments of the Bank’s representatives poured cold water on those who were interested in buying CAD. The Bank noted that the world economy recovery is still in progress; however it is slow and constraint. Bank’s representatives also stressed that further interest rate increase will be carried out with extreme prudence based on the progress in both Canadian and world economy. Most likely by such comment the Bank ensured that they have wiggle room left, not implying that the interest rate increase is impossible in the foreseeable future. The Bank of Canada expects that the country’s economy will grow by 3.5% this year; while the growth forecast in April was by 3.7%. Growth forecast for 2011 was reduced to 2.9% from 3.1%.
Earlier the CB of Canada brought down the economic growth quarterly forecasts until QI 2011 inclusive as a response to the weak and obscure world economic outlooks. Inflation forecasts were also slightly adjusted. However, investors viewed the report as a signal of the monetary policy tightening, which was mainly activated by the phrase that the Bank intends to implement a gradual reduction of monetary stimulus, which will correspond to the achieved target level of inflation.

The next meeting of the Bank of Canada will be held on 8 September.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 09.08.10: JPY: Yen is pending rate decision tomorrow

Japanese Yen afforded an opportunity for the USD to regain and went up from the previous lows at the Forex market today.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however it goes up, giving ground for a pair buy signal. Stochastic Oscillator is giving a similar signal.

Forex recommendations: USD/JPY buyers’ targets today will be the levels of 86.00 and 86.50.

Two day meeting of the Bank of Japan started today: interest rate decision will be announced at the meeting tomorrow – the market expects that a regulator will leave the interest rate unchanged at the level of 0.1% per annum; the level which has been maintained since 2008.

A number of the latest macro-economic news showed that Japanese economy has slowed down; expensive Yen also adds oil to the fire.

Economists still believe that the Bank of Japan will maintain interest rate at the lows to hold in check deflationary pressure on the country’s economy.
Although growth of the Yen started neither today nor yesterday, Japanese authorities have not lunched currency intervention yet. On Wednesday Japanese Minister of Finance Mr. Noda emphasized once again that authorities closely monitor currency fluctuations; investors still believe that the economy in the country of the rising sun is stable enough to be impacted by the expensive national currency. It is exports in Japan which is affected in the first place, as it actually shoulders the burdens of the domestic economy recovery after the recession.
It was also Noda who stated earlier that currency markets have the right to fix currency exchange rate by themselves. The Minister was not alerted by the expensive Yen or its possible impact on the Japanese economy. The politician said on Tuesday that in general Yen’s growth affects exports decline and government economic growth strategy makes references to the necessity to prevent excessive growth of the Yen. Noda also noted that currency abrupt and random movement is very undesirable for the economy.
Japanese authorities fear that JPY consolidation at Forex will become one of the factors, affecting national economy recovery pace. Currently expensive JPY reduces exports level. Finance Minister Deputy Motohisa Ikeda stated earlier that the government would like to avoid this. The official noted earlier that Yen’s growth can jeopardize the growth of the GDP levels. Experts believe that the pressure on the Bank of ponies can now be amplified by the Prime Minister Khan. “If Yen continues to demonstrate rapid growth, pressure on the Bank of Japan is likely to increase. It seems that the Government intends to take all efforts to prevent this situation” - says Societe Generale SA.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 11.08.10: Euro continues to be corrected

The pair EUR/USD continues to go down at the Forex currency market this morning: yesterday the USD received support from FR and it seems likely that correction for the pair will continue on Wednesday as well.
By 9:50 Moscow time the Euro is at 1.3097 against the closing session level of 1.3176 yesterday.
Late last night the U.S. Federal Reserve announced a decision to keep interest rate in the target range of 0-0.25% per annum. The FR noted in the accompanying statement that the rate would be maintained at the low levels for a long time.
FR also stressed that economic recovery pace will be moderate in the nearest future.
Tonight the U.S. trade balance and oil reserves data for a week will be released. It is assumed that in general investors today will regain from the yesterday’s news, however the major pair trend reverse has not been the point at issue yet.
Most likely the pair EUR/USD will be in the range of 1.3030-1.3180 on Wednesday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 11.08.10: GBP: Pound continues to go down

At the Forex currency market the British Pound Sterling rate continues to go down and statistics of today will only accelerate the currency downward trend.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and is going down, confirming a previous sell signal for the pair. Stochastic Oscillator is giving a similar signal today.

Forex recommendations: sellers’ targets today will be the levels of 1.5650 and 1.5580.

The following UK news was released today:

– Number of unemployed in the UK in June: 3.8 thousand, forecast: 17 thousand;

– Unemployment rate in June: 4.5%;

– Average wages in June: +1.3% against +2.7% in May.

The Pound continued to fall in price after the poor statistics release.
According to the data released earlier the UK job market has been decreasing in July - KPMG/REC calculations show that permanent jobs index declined to 60.2 in July against the level of 60.7 in June. Temporary jobs index reduced to 54.3 in July against the previous level of 57.0.
As per Halifax data houses prices increased by 0.6% on monthly basis (+4.9% y/y) in July

Employment data is of interest also because statistics on Tuesday showed that number of jobs in the UK increased to 102 as per Reed index in July – key level of the growth rate is specified to be 100, excess over this level indicates rate growth. At the same time work force is required urgently in some sectors: production sector has reached the level of 116, insurance sector – 138.

The pair GBP/USD ascending trend has been in progress since mid-May this year at Forex. Worth noting that last week the Bank of England kept the interest rate unchanged at the level of 0.50% per annum, which agreed with the market expectations, the assets buy-back program was also left unchanged in the amount of 200 billion pound sterling. Note, that earlier one of the MPC members, Sentence has already advocated for the rate increase – however market believes that it will not happen until spring next year. Further forces alignment will fall into place as soon as the minutes of the meeting are released. Players’ attention today is focused on the head of the Bank of England, Mervin King’s speech.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 11.08.10: JPY: Yen rose to 8 months maximum

Japanese Yen continues to grow at the Forex currency market – at the trading session today the pair USD/JPY has already broken down psychologically important level of 85.00.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to go down, confirming a previous sell signal for the pair. Stochastic Oscillator also gives a pair sell signal.

Forex recommendations: sellers’ targets today will be the levels 84.50 and 84.00.

The bank of Japan announced its decision to leave the in interest rate at the level of 0.1%. This is the level, that has been maintained since 2008. Japanese economic situation evaluation remains unchanged.

Finance Minister Mr. Noda who has been commenting currency market situation more actively than the others emphasized on Wednesday that currency abrupt and random movement can have an impact on the economy, therefore a controller is carefully monitoring the situation. According to him all currencies move in the same direction following the U.S. FR interest rate decision yesterday.

Japanese Minister of Trade Mr. Naoshima stressed in the middle of the week that it is very hard to take currency market intervene decision at the moment. According to him it is required to put together all the data once again to take such decision.

Although growth of the Yen started neither today nor yesterday, Japanese authorities have not lunched currency intervention yet. On Wednesday Japanese Minister of Finance Mr. Noda emphasized once again that authorities closely monitor currency fluctuations; investors still believe that the economy in the country of the rising sun is stable enough to be impacted by the expensive national currency. It is exports in Japan which is affected in the first place, as it actually shoulders the burdens of the domestic economy recovery after the recession.
It was also Noda who stated earlier that currency markets have the right to fix currency exchange rate by themselves. The Minister was not alerted by the expensive Yen or its possible impact on the Japanese economy. The politician said on Tuesday that in general Yen’s growth affects exports decline and government economic growth strategy makes references to the necessity to prevent excessive growth of the Yen. Noda also noted that currency abrupt and random movement is very undesirable for the economy.
Japanese authorities fear that JPY consolidation at Forex will become one of the factors, affecting national economy recovery pace. Currently expensive JPY reduces exports level. Finance Minister Deputy Motohisa Ikeda stated earlier that the government would like to avoid this. The official noted earlier that Yen’s growth can jeopardize the growth of the GDP levels. Experts believe that the pressure on the Bank of ponies can now be amplified by the Prime Minister Khan. “If Yen continues to demonstrate rapid growth, pressure on the Bank of Japan is likely to increase. It seems that the Government intends to take all efforts to prevent this situation” - says Societe Generale SA.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 11.08.10: NZD: New Zealand Dollar will continue to fall in price for some time longer

At the Forex currency market on Wednesday the New Zealand Dollar rate continues to go down in pairing with the USD – investors have aversion to risks; global capital markets’ sentiments are still mixed.

The pair NZD/USD short term trend seems downward; medium term trend looks like trades in range.

Support levels: 0.7165, 0.7095.

Resistance levels: 0.7355, 0.7400.

The New Zealand economic situation has not changed significantly since yesterday; however, it is more obvious today that traders are reluctant to open risky positions. Oil prices adjustment has also put pressure on the NZD at Forex.

Interest rate is at the level of 3.0% per annum in New Zealand now. Two weeks ago the Reserve Bank of New Zealand raised the interest rate for the second time at a run – to 25 basis points, then an interval in the sequence of the rises was announced. “Cessation of the further monetary incentive measures is appropriate. The pace and scope of the further rate increases is likely to be more moderate than anticipated in the June statement”, said the Head of the Bank, Alan Bollard in his comment. He stressed that previous NZD growth runs counter to the plans to mitigate New Zealand economy prospects. “Growth in the economies of our trading partners proved to be better than we predicted, however outlooks have worsened. Although prices of the raw materials are still high, they became more moderate”.
The data released last Thursday showed unexpected growth of unemployment rate in QII in New Zealand, therefore domestic demand in the country remains limited and economy does not receive additional support for the growth, as has been expected by the Reserve Bank of New Zealand.
Labour market growth in the country has apparently faced some difficulties, which the RBNZ passed over in silence while saying that pace of the interest rate increases will be moderate in the future. In this regard an interval in the chain of the interest rate increases can be long lasting.
It should be noted that in general the NZD is quite attractive for the investments at Forex considering current drawdown; it is probable that investors’ interest in the currency will revert as soon as the situation with the U.S. economy clarifies.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 11.08.10: AUD: Aussie is not appealing for investors

At the Forex currency market the Australian Dollar rate today continues to decline – downward trend has started on Monday this week, when correction spreads to the capital markets

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and is moving down, which confirms a previous sell signal for the ‘Australian”. Stochastic Oscillator is giving a pair sell signal on Wednesday too.

Forex recommendations: sellers’ targets today are the levels of 0.8970 and 0.8900.

It became known today that consumer confidence Westpac increased by 5.4%, to 119.2 in August against the previous level of 113.1. Thus the rate leaped to the seven months maximum, however it has not supported AUD.
Last week the Reserve Bank of Australia retained current interest rate at the previous level of 4.50% per annum. The main and official version –current level of inflation ease will prevent from undertaking drastic measures to tighten monetary policy- and it is true in general: the last inflation report in Australia released on 28 July showed that net prices increased by 2.7% on annual basis in QII. The head of RBA Stevens is planning to hold inflation level in the range of 2-3%. He says that the core inflation is expected to be approximately in the center of the indicated range until mid- 2011, however CPI inflation can rebound above 3% due to the introduction of the tobacco and utilities taxes.
However global situation is far from being stable and quiet – and this is the second factor which put pressure on the RBA. According to Stevens forecast of the world economic recovery is still obscure, considering inflation factor and ambiguous prospects of the global capital markets. RBA can extend an interval in the serious of rate increases indefinitely.

Economists note that RBA has an opportunity to monitor the situation: mortgage rates now are close to the pre-crisis levels in the country; sharp rise in inflation is not impending either. According to RBA, core inflation level will amount to 2.75% by December 2011, by mid-2012 - 3%. At the same time annual inflation rate will grow only: this year – to 3.75%; next year – to 4%.

It is worth noting that AUD sales will continue at Forex until investors’ desire to risk is back again.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 12.08.10: Major pair correction is not completed yet

On Thursday morning at Forex the pair is being corrected upward following the bulk sale yesterday; however investors are not ready to take risk as far.
By 10:05 Moscow time the Euro is at 1.2914 against closing session level of 1.2862 yesterday.
On Wednesday night the thing of which everyone had thought, however a few expected, finally come down – the Euro fell for almost 2 figures, losing almost everything it had gained. American economy which recovery rate is still slow- dragged the others. General market overheat also had its impact.
Players will be interested in the U.S. data of the last night today – benefit requirements and exports/imports prices. It is probable that after a slight upward rebound, the pair’s decline will continue; however the Euro seems to be stable nevertheless.
Most likely the pair EUR/USD will be in the range of 1,2900-1.3000 on Thursday trading session