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[LF.Anastasia]

AUD: Activity in Australian Dollar is fading away

At the Forex currency market the Australian Dollar rate is traded sluggishly upward at the end of the week as activity in high risky currencies is decreasing at the end of the week.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, giving a buy signal. Stochastic Oscillator has come into overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0425, the pair will go to 1.0430 and 1.0450.

Statistics released on Friday showed that Australian price index for import increased by 2.5% q/q in Q4 against zero change in Q3. However, the AUD has ignored this data, as investors’ risk appetite is the main catalyst currently; however investors keep looking back at external background and situation in Eurozone.

Employment rate in November fell by 7.6 thousand against initial estimate of -6.3 thousand. At the same time, unemployment rate remained at the previous level of 5.3%. We would remind that economists expected the rise of jobs by 10 thousand. The index clearly reflects the impact of the European debt crisis on Australian economy.

According to the estimates of the government, last 12 months were the worst for the labour market over the last 20 years, as the sector has been weakening since the last six month of 2011.

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. Statistics released earlier showed that mortgage lending in Australia increased by 1.4% m/m in November against the growth of 0.8% in October. Number of permits to construct increased by 8.4% m/m (-10.0% y/y). The rise of 7% had been predicted. Retail sales showed zero change in November against the growth of 0.2% m/m in October.

 

[LF.Anastasia]

CAD: Canadian Dollar failed to stay at local highs

At the Forex currency market the Canadian Dollar rate retreats on Friday after four days of growth and achieving local highs of 1.0070. The CAD has not come so close to parity since October last year.

Forex forecast: MACD indicator for the pair USD/CAD is going down in the negative area and is giving a sell signal. Stochastic Oscillator remains in the oversold zone and maintains a sell signal.

Forex recommendations: in case of rebound from 1.0120, the pair will go to 1.0110 and 1.0090. There is a high chance that the pair will consolidate at the current levels.

Publication of Canadian statistics, which is expected this afternoon, can change force balance in the pair USD/CAD. However, most likely, players will prefer profit taking before the weekend.

As per available data, sales increased by 0.2% in the manufacturing sector of Canada against expectations of 1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7% in November, stocks in the warehouses: by 0.4%.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1, 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up during all 2013 in the moderate pace, while decline in mortgage rates will encourage boost in the volumes of lending to households.

Statistics showed that sales 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. 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.

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 head of the Bank Mr. Carney said in his speech yesterday that debts of the households began to worry the regulator, as this can cause reduction in GDP in the long term. Carney also noted that the balance of the Canadian companies is positive in general; however impact of European recession, which might last until Q4 this year, is detrimental. The Bank of Canada kept interest rate at the level of 1.0% per annum and the market was not surprised.

 

[LF.Anastasia]

EUR/USD: Euro continues to decline

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

By 9.00 MSK the Euro is at 1.2896 against closing level of 1.2933 on Friday.

Euro’s “Bulls”’s optimism is vanishing now, as negotiations between Greece and private capital have not been successful, while a meeting of EU Finances Ministers is scheduled for Monday where they are going to discuss Greek debt problems .

A flow of positive news is urgently required to continue Euro’s active correction, which not available at the moment.

Most likely the pair EUR/USD will not go beyond the range of 1.2810-1.2940 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound started this week with sales

At the Forex currency market the British Pound Sterling rate is traded downward on Monday, as investors are not very confident in external environment.

Forex forecast: MACD indicator for the pair GBP/USD is traded slightly upward in the negative area, while volumes are weak and is giving a buy signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 1.5555, the pair will go to 1.5560 and 1.5570. There is a high chance of consolidation at the current levels.

Macro-economic background is stable so far. The release of the minutes of the last meeting of the Bank of England is expected this week. Comments of MPC members will be of interest to players; however they are unlikely to affect overall pattern of trades for GBP/USD.

Unemployment continues to thrive in Britain. Unemployment rate rose to 8.4% in November against the forecast of 8.3%, the level of unemployed increased by 118 thousand over three months against +128 thousand in the previous three months, according to estimates.

Statistics released earlier showed that consumer confidence Nationwide in the UK reduced to 38 points in December against the level of 40 points in November. It seems that the latest data has smoothed over the rise achieved in November, although it has not been unexpected. The end of 2011 was not simple for the British consumers, which is reflected in statistics. 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.

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

 

[LF.Anastasia]

CHF: Swiss Franc backs off

At the Forex currency market Swiss Franc rate is traded downward at the beginning of the week after triumphal growth last week.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it declines, while volumes are decreasing, and is giving a sell signal. Stochastic Oscillator pushes away from oversold zone and is giving a signal for moderate buying.

Forex recommendations: in case of breakdown at 0.9375, USD/CHF will go to 0.9390 and 0.9410. A chance is high that the pair will consolidate at the current levels.

Situation is Switzerland is stable in terms of macro-statistics.

Interesting statistics on national economy will be published only on Friday; leading indicator index KOF in January is also scheduled for the release then.

Ax week ago Swiss authorities said 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.

The data showed in the middle of last week that investor economic expectations index ZEW was at the level of -50.1 points in January against -72 points a month before that. This is a positive signal, indicating some stability in the country. 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. It became known the day before 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.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned at the beginning of January. 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. 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 is still under pressure

At the Forex currency market the Japanese Yen rate continues to give way to the USD.

Forex forecast: MACD indicator for the pair USD/JPY moves sideways in the negative area; volumes are average, which all together, does not give a clear signal. Stochastic Oscillator is going up in the neutral zone, shaping a buy signal.

Forex recommendations: in case of breakdown at the level of 77.10, the pair will go to 77.30 and 77.40. A chance that the pair will consolidate at the current levels is high.

Volumes in the pair were not big at the Asian session.

Market is waiting for the end of the meeting of the Bank of Japan. Most likely, it will not bring any surprises and the rate will be maintained at its minimal level. On Tuesday, 24 January, Japanese government is planning to release updated forecast for national budget and its problems. Edition of Nikkei said last Friday that budget deficit in Japan will be above 17 trillion yen in 2015, which is 3.5% of GDP of the country even if government raises tax on consumption. Officially Japan plans to reduce budget deficit to 3.2% of GDP in 2015 in order to reduce the index twice versus to 2010.

The head of the Bank of Japan Mr. Shirakawa said last week 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 also worth noting, that according to the Bank of Japan, 7 out of 9 regions of the country downgraded assessments of economic situation versus the value in October. Only in two regions assessments remained unchanged. Nevertheless, Japanese statistics demonstrates deceleration in economy: revised average wages in the country fell by 0.2% y/y in November against preliminary decline of 0.1%. The index was stable in October, so it is the first decline in two months. In addition, bank lending rose by 0.5% y/y in December against the growth of 0.2% y/y in November.

 

[LF.Anastasia]

AUD: Australian Dollar maintains at local highs

At the Forex currency market on Monday the Australian Dollar rate looks worthy, continuing to stay close to local highs. Positions of the AUD seem especially stable, due misgivings of the market about Greece and uncertainty about interest in risk. In addition, trading floors is China are closed.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, volumes are increasing, giving a buy signal. Stochastic Oscillator has come into overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0500, the pair will go to 1.0510 and 1.0530.

Macro-economic background in the country is stable this morning. No important statistics has been published on Monday

Statistics released on Friday showed that Australian price index for import increased by 2.5% q/q in Q4 against zero change in Q3. However, the AUD has ignored this data, as investors’ risk appetite is the main catalyst currently; however investors keep looking back at external background and situation in Eurozone.

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.

Statistics released earlier showed that mortgage lending in Australia increased by 1.4% m/m in November against the growth of 0.8% in October. Number of permits to construct increased by 8.4% m/m (-10.0% y/y). The rise of 7% had been predicted. Retail sales showed zero change in November against the growth of 0.2% m/m in October.

Employment rate in November fell by 7.6 thousand against initial estimate of -6.3 thousand. At the same time, unemployment rate remained at the previous level of 5.3%. We would remind that economists expected the rise of jobs by 10 thousand. The index clearly reflects the impact of the European debt crisis on Australian economy. According to government’s estimate, last 12 months were the worst for the labour market over the last 20 years, as the sector has been weakening since the last six month of 2011.

 

[LF.Anastasia]

CAD: Canadian Dollar is slowly losing positions

At the Forex currency market the Canadian Dollar rate is weakening at the beginning of the week in response to market’s hesitations that rally in high-yielding currencies will be continued.

Forex forecast: MACD indicator for the pair USD/CAD is going down in the negative area and is giving a sell signal. Stochastic Oscillator has come out of the oversold zone and is giving a buy signal.

Forex recommendations: in case of rebound from 1.0135, the pair will go to 1.0140 and 1.0150.

Latest statistics showed that CPI in Canada fell by 0.6% m/m (+2.3% y/y) in December against the forecast of -0.1% m/m. Despite this obvious fact, the data requires some clarification. Annual growth of CPI has been minimal since February 2011, and inflation reduced due to decline in prices for gasoline and other fuel.

Therefore, basing on the current inflationary situation, the Bank of Canada can keep inflation at the existing level for some more time with no damage for its monetary policy.

At the same time, forecast of the Bank of Canada indicates that inflation will slow down up to +1.5% on annual basis in April-June.

We would remind that last week, the Bank of Canada left interest rate at the level of 1.0% per annum, which did not become a surprise for the market.

The data showed that sales increased by 0.2% in the manufacturing sector of Canada against expectations of 1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7% in November, stocks in the warehouses: by 0.4%.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1, 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up during all 2013 in the moderate pace, while decline in mortgage rates will encourage boost in the volumes of lending to households.

Statistics demonstrated that sales 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. 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.

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%.

 

[LF.Anastasia]

EUR/USD: Euro was frustrated with uncertainty of Greece

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

By 9.05 MSK the Euro is at 1.2997 against yesterday’s closing level of 1.3034.

Thus, the Euro failed to go above 1.30; yesterday’s positive surge was triggered by comments of German monetary politician who did not rule out possibility of merging of ESM and EFSF funds in case of deterioration of economic situation in Eurozone.

Unsettled negotiation between Greece and private capital remain a risk factor.

A two-day meeting of the U.S. Federal Reserve will start today; it is expected that interest rate will be kept unchanged.

Most likely the pair EUR/USD will not go beyond the range of 1.2940-1.3050 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound is uncertain on Tuesday

At the Forex currency market the British Pound Sterling rate is traded slightly downward on Tuesday, while external background is still ambiguous.

Forex forecast: MACD indicator for the pair GBP/USD is in the negative area and is going up while volumes are low, giving a buy signal. Stochastic Oscillator tends to reverse in overbought area and started to shape a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 1.5560, the pair will go to 1.5565 and 1.5580. If external pessimism prevails, sellers’ target will be the level of 1.5455.

Representative of the Bank of England Mr. Posen said yesterday that he still adheres to “pigeon” attitude to monetary policy in the country. Thus he believes that inflation pressure is decreasing rapidly and economic growth is increasing, although in a slow pace. Decision on QE will be adopted at the meeting in February, now members of MPC are discussing possibility to increase the volume of assets purchase. Posen stressed that this is not yet sufficient to stabilize situation in British economy.

Unemployment continues to thrive in Britain. According to estimates, unemployment rate rose to 8.4% in November against the forecast of 8.3%, level of unemployed increased by 118 thousand over three months against +128 thousand in three months before that.

Statistics released earlier showed that consumer confidence Nationwide in the UK reduced to 38 points in December against the level of 40 points in November. It seems that the latest data has smoothed over the rise achieved in November, although it has not been unexpected. The end of 2011 was not simple for the British consumers, which is reflected in statistics. 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.

The data released earlier showed that house prices in the UK fell by 16% in December, as per RICS estimates. According to the data released previously, 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. Minutes of the meeting of the Bank of England is going to be released this week, comments of MPC members will be of interest to players; however they are unlikely to affect overall pattern of trades for GBP/USD.