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[LF.Anastasia]

GBP: British Pound regains from previous sales

At the Forex currency market the British Pound Sterling rate regains from previous sales which were of emotive nature on Tuesday.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is going down moderately, while volumes are increasing, and is giving a sell signal. Stochastic Oscillator has come out of the oversold zone, giving a buy signal.

Forex recommendations: The pair GBP/USD can go to 1.5410 and1.5430 as part of correction. There is a high chance that the pair will consolidate at the current levels.

Obviously, growth of the Pound is part of correction at the moment, as there have not been fundamental changes in economy.

The data released today showed that house prices Rightmove in the UK dropped by 0.8% m/m (+0.4% y/y) in January. Research Group stated that asking prices fell three times this month; however interest to the British real estate sector is still preserved. Meanwhile, according to experts’ estimate, situation in the sector remains “complex” in 2012, as unemployment rate is increasing and impact from European problem is not waning.

According to the data released earlier, house prices in the UK fell by 16% in December, as per RICS estimates. The Pound has neglected this statistics, concentrating on the external background.

Statistics released earlier showed that the UK retail price index BRC increased by 1.7% m/m in December against the rise of 2.0% a month earlier. Thus, the index fell to 16-month lows, largely due to Christmas sales, when retailers reduced prices. Prices declined by 0.1% on monthly basis.

At the meeting which was held last week, the Bank of England left interest rate at 0.50% per annum, volume of securities repurchase was also kept unchanged at 275 billion pounds. In other respects, views of MPC remained unchanged: there is no need to revise interest rate; therefore the Bank will continue to monitor economy and inflation. It is worth noting that the Bank of England expects economic stagnation in Q4 2011 and GDP growth in Q1 2012. Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3.

 

[LF.Anastasia]

CHF: Swiss Franc is growing on Tuesday

At the Forex currency market Swiss Franc rate is growing today.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, has gradually shifted to sideways movement, and is not giving a clear signal. Stochastic Oscillator is going up in the neutral zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at 0.94800 USD/CHF will go to 0.9470 and 0.9460.

Swiss Franc positions are attractive for investors now, despite mixed sentiments in the market.

It became known yesterday that producer prices index and import prices in Switzerland increased by 0.3%% m/m (-2.3% y/y) in December against the forecast of -0.1% m/m. The data is of interest; however we shall wait for January figures in order to draw up a conclusion.

Swiss authorities said earlier that government does not have tools for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to doubt the Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after further discussion.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned last week. The name of successor is still unknown and it is also not clear if new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted that search for the candidate for SNB governor will take several months.

According to the data released in the end of December leading indicators index KOF fell to 0.01 points in December against the forecast of 0.23 points and previous revised value of 0.34 points. 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. It became known earlier that unemployment rate in Switzerland increased to 3.3% in December against expectations of 3.2% and the level of 3.1% in November. Obviously, slowdown in the national economy still goes on.

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. 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.

 

[LF.Anastasia]

JPY: Japanese Yen continues to grow

At the Forex currency market the Japanese Yen rate continues to stick to the ascending trend on Tuesday.

Forex forecast: MACD indicator for the pair USD/JPY continues to go down in the negative area, volumes are increasing; which, all together, gives a sell signal. Stochastic Oscillator is moving sideways in the neutral zone and is not giving a clear signal.

Forex recommendations: in case of breakdown at the level of 76.50, the pair will go to 76.40 and 76.20. It is also possible that the pair will consolidate at the current levels.

Japanese authorities keep saying that local economy continues to grow, although suffers from sluggish exports. According to the economic estimates released today, state of economy remains unchanged in the Country of the Rising Sun; however export sector has been revised downward for the first time in three months: wording has been changed to: “weakening” from previous “stable”, largely due to the growth of JPY and delays of shipments to Thailand.

The data released on Monday showed that composite index of consumer confidence in Japan increased to 38.9 points in December against the level of 38.1 points in November.

At the same time, the head of the Bank of Japan Mr. Shirakawa said today that economic recovery in the Country of the Rising Sun has suspended and situation in Europe represents the most dangerous risk for the economy. Local companies have no problems with credits currently; however the situation can become more complicated due to external influence.

It is worth noting that according to the Bank of Japan, 7 out of 9 regions of the country downgraded assessments of economic situation in comparison with the state of affairs in October. Only in two regions assessments remained unchanged.

Minutes of the last meeting of the Bank of Japan released earlier, stated that it is necessary to trace back the effect of the recent soft policy; potential impact from the expensive Yen also causes special concern.

Mr. Shirakawa, the head of the Bank of Japan 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.

Statistics released earlier showed that trade balance in Japan was at the level of -Y496.5 billion in December. In addition, bank lending increased by 0.5% y/y in December against the growth of 0.2% y/y in November.

 

[LF.Anastasia]

AUD: Australian Dollar resumed its growth

At the Forex currency market the Australian Dollar rate resumed its growth on Tuesday following two days of moderate sales.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, giving a buy signal. Stochastic Oscillator demonstrates sideways trend and is traded sideways, not giving a clear signal.

Forex recommendations: in case of breakdown at the level of 1.0420, the pair will go to 1.0430 and 1.0460.

Macro-economic situation in Australia has not changed significantly today.

Statistics released yesterday showed that mortgage lending in Australia increased by 1.4% m/m in November against the growth of 0.8% in October, which is a positive indicator.

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. According to the data released earlier, business activity index AiG in the service sector of Australia increased to 49.0 points in November against the level of 47.7 points in October. In addition, trade balance amounted to +А$1.38 billion in November against expectations of +А$2.0 billion.

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, while economists expected the increase of jobs by 10 thousand. The indicator reflects the impact of European debt problems on the Australian economy. Statistics released earlier showed that number of construction permits in Australia increased by 8.4% m/m (-10.0% y/y) in November. Expected rise had been of 7%. Retail sales showed a zero change in November against the growth of 0.2% m/m in October.

 

[LF.Anastasia]

CAD: Canadian Dollar tries to grow

At the Forex currency market the Canadian Dollar rate continues the trend of rapid growth which started yesterday.

Forex forecast: MACD indicator for the pair USD/CAD shifted to sideways trend in the negative area and is not giving a clear signal. Stochastic Oscillator continues to go down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at 1.0110, the pair will go to 1.0100 и 1.0090.

According to statistics sales of new cars in Canada decreased by 1.0% in November, down to 137.640 thousand, smoothing over the rise in the index achieved over the last two months.

It became known earlier that house price index in Canada rose by 0.3% in November against the growth of 0.2% in October and expectations of the same level.

CPI in Canada increased by 0.1% m/m (+2.9% y/y) in November which agreed with the forecast. The growth is within the ball park, which meets with expectations and does not involve risk for the economy. The regulator had kept interest rate unchanged at the level of 1% per annum. The news did not take players by surprise, as investors assumed that the rate would be maintained at the current levels for at least another 12 months. The Bank of Canada said in the comments that negative factor, which was caused by deceleration of the global economy, can affect Canadian economic system as well, especially now when situation in the world financial platforms has worsened sharply through the fault of the Euro.

The data released last week showed that unemployment rate rose to 7.5% in December against the forecast of 7.4%, employment rate increased by 175 thousand versus expectations of growth of 15 thousand. Thus, invariably negative pattern in the Canadian employment market, which took shape in the last six months of 2011, still persists. Meanwhile, significant rise in jobs in the production sector is obvious. GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%.

The Bank of Canada believes that GDP in Canada will amount to 2.8% in 2011 (decline of 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.

 

[LF.Anastasia]

EUR/USD: Euro continues to be corrected

The pair EUR/USD continues to grow at the Forex currency market on Wednesday morning.

By 9.45 MSK the Euro is at 1.2767 against yesterday’s closing level of 1.2732.

Investors expect publication of strong US data tonight and also believe that Greece will resume negotiations with private capital about writing off 50%of debts or more. If Athens will not be flexible this time again, Q1 can be finished with a very bad result for the country this year.

Market continues to ignore external negative factors. Information, that the World Bank has lowered the forecast for the world economic growth for this year down to 2.5% from previous 3.6%, largely due to risks of recession in Europe, has also been neglected.

Therefore, rebound of the pair EUR/USD is still preserved.

Most likely the pair EUR/USD will not go beyond the range of 1.2690-1.2790 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound consolidates at the achieved levels before going further up

At the Forex currency market the British Pound Sterling rate consolidates after sales

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is going down moderately, while volumes are increasing, giving a sell signal. Stochastic Oscillator has come back to the oversold zone, maintaining a sell signal.

Forex recommendations: The pair GBP/USD can go to 1.5430 as part of correction. There is a high chance that the pair will consolidate at the current levels.

Obviously, Pound looks weak as there have not been fundamental changes in economy.

The latest data showed that unemployment rate in the UK amounted to 5.0% in December, which agrees with the forecast. Level of unemployed people increased by 1.2 thousand against forecast of growth of 7 thousand. It was also recorded that average weekly earnings, including bonuses, increased by 1.9% a month earlier against the rise of 1.8% in the previous reporting period.

Statistics released earlier demonstrated that economy of Great Britain is still under pressure and there are no factors which will help to improve it. Unsettled problems in Eurozone have reduced investors’ interest to the UK economy.

At the meeting which was held last week, the Bank of England left interest rate at 0.50% per annum, volume of securities repurchase was also kept unchanged at 275 billion pounds. In other respects, views of MPC remained unchanged: there is no need to revise interest rate; therefore the Bank will continue to monitor economy and inflation.

It is worth noting that the Bank of England expects economic stagnation in Q4 2011 and GDP growth in Q1 2012. Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3.

 

[LF.Anastasia]

CHF: Swiss Franc continues to grow on Wednesday

At the Forex currency market Swiss Franc rate continues to is grow today.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, has gradually shifted to sideways movement, and is not giving a clear signal. Stochastic Oscillator is going down in the neutral zone, and is giving a buy signal. Ichimoku indicator shows that quotes tends to Ichmoku cloud, upper border of which crosses through the level of 0.9300.

Forex recommendations: in case of breakdown at 0.9420 USD/CHF will go to 0.9300. Resistance zone stretches through the previous tops at 0.9600.

Swiss Franc positions are attractive for investors now, despite mixed sentiments in the market. Signals for sale prevail.

It became known today that key index of investor consumer confidence ZEW increased to the level of -50.1 in January against -72.0 in December. This growth indicates the rise in confidence of institutional investors in economic prospects in the country and in business climate in particular.

It became known earlier that producer prices index and import prices in Switzerland increased by 0.3%% m/m (-2.3% y/y) in December against the forecast of -0.1% m/m. The data is of interest; however we shall wait for January figures in order to draw up a conclusion.

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. 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.

Swiss authorities said earlier that government does not have tools for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to doubt the Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after further discussion.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned last week. The name of successor is still unknown and it is also not clear if new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted that search for the candidate for SNB governor will take several months.

 

[LF.Anastasia]

JPY: Japanese Yen is squeezed in the narrow channel

At the Forex currency market the Japanese Yen rate continues to strengthen in the narrow trading range of 76.20-77.60 on Wednesday.

Forex forecast: MACD indicator for the pair USD/JPY continues to go down in the negative area, volumes are increasing; which, all together, gives a sell signal. Stochastic Oscillator is in the oversold zone and is traded near the border, not govong a clear signal.

Forex recommendations: in case of breakdown at the level of 77.60, the pair will go to 76.40 and 76.20. It is also possible that the pair will consolidate at the current levels. Note that sideways movement in the pair had been developing since July last year.

The data released on Wednesday showed that revised industrial output in Japan decreased by 2.7% in November against the revised decline of 2.6% a month earlier.

At the same time, the head of the Bank of Japan Mr. Shirakawa said today that economic recovery in the Country of the Rising Sun has suspended and situation in Europe represents the most dangerous risk for the economy. Local companies have no problems with credits currently; however the situation can become more complicated due to external influence.

Minutes of the last meeting of the Bank of Japan released earlier, stated that it is necessary to trace back the effect of the recent soft policy; potential impact from the expensive Yen also causes special concern.

Mr. Shirakawa, the head of the Bank of Japan 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.

Statistics released earlier showed that trade balance in Japan was at the level of -Y496.5 billion in December. In addition, bank lending increased by 0.5% y/y in December against the growth of 0.2% y/y in November.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to grow versus USD

At the Forex currency market the Canadian dollar rate continues ascending trend which started yesterday.

Forex forecast: MACD indicator for the pair USD/CAD is in the negative area and started a new round of decline. Stochastic Oscillator continues to fall in the neutral zone and is giving a sell signal. Ichimoku indicator shows intention of the pair to go down to strong basis at 1.0040, while the level of 1.0325 acts as resistance.

Forex recommendations: in case of rebound from 1.0325, the pair will go to 1.0090 and 1.0040.

According to statistics, sale of new cars in Canada reduced by 1.0% in November, to 137.640 thousand, smoothing over the rise achieved over the few previous months.

CPI in Canada increased by 0.1% m/m (+2.9% y/y) in November which agreed with the forecast. The growth is within the ball park, which meets with expectations and does not involve risk for the economy. The regulator had kept interest rate unchanged at the level of 1% per annum. The news did not take players by surprise, as investors assumed that the rate would be maintained at the current levels for at least another 12 months. The Bank of Canada said in the comments that negative factor, which was caused by deceleration of the global economy, can affect Canadian economic system as well, especially now when situation in the world financial platforms has worsened sharply through the fault of the Euro.

It became known earlier that house price index in Canada rose by 0.3% in November against the growth of 0.2% in October and expectations of the same level.

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.

The data released last week showed that unemployment rate rose to 7.5% in December against the forecast of 7.4%, employment rate increased by 175 thousand versus expectations of growth of 15 thousand. Thus, invariably negative pattern in the Canadian employment market, which took shape in the last six months of 2011, still persists. Meanwhile, significant rise in jobs in the production sector is obvious. GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%.