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[LF.Anastasia]

Forex Analytics of LiteForex of 19.08.10: CHF: Swiss Franc stands still in the sideways trend

Swiss Franc rate at the Forex currency market is in the sideways and is traded in the range of 1.0400-1.0445 for the second consecutive session.

Forex forecast: MACD indicator is in the negative area for the pair SD/CHF, giving grounds for a pair sell signal. Stochastic Oscillator is not giving a clear 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 1.0380 and 1.0350; if the pair exceeds the level of 1.0440, buyers’ targets will become the levels of 1.0480 and 1.0510.

It became known today that trade balance in Switzerland increased to 2.89 billion francs in July against the forecast of 1.82 billion francs and the previous value of 1.00 billion francs.
Economic situation remains almost unchanged in Switzerland. Interest rate of the Swiss National Bank is at the level of 25% currently as 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 – around +2.2%. Economists believe that there is no point to expect the interest rate increase in Switzerland earlier than the beginning of the next year.
The latest Swiss statistics (producer price index and imports prices in July: -0.5% m/m, +0.5% y/y; unemployment rate: 3.8% in July against the level of 3.9% earlier) seems to be mixed; intensified by the high level of volatility at Forex, it made Swiss Franc fluctuate.

Meanwhile the economist Fabia Hiller stressed last week that labour market improvement will be gradual and according to the forecast unemployment rate will amount to 3.9% in 2010 on average.
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 actuated by the increase in the number of the registered cars. However business activity index in Switzerland is still not the most optimistic.
The next SHNB meeting will be held on 16 September. Market believes that even if the issue of the interest rate will be raised at the meeting, the discussion will be superficial: first of all aid package shall be developed to prevent second bottom of recession and the issue of the expensive Franc which impacts on Swiss economy is also a matter to be discussed.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 19.08.10: CAD: Canadian Dollar continues to grow

The Canadian Dollar maintains strong position at the Forex currency market – the pair USD/CAD goes down at the trading session on Thursday which is the third consecutive session of decline.
Short term trend seems to be trades in range, medium term trend is similar.
Support levels: 1.0250, 1.0100.
Resistance levels: 1.0500, 1.0585.
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%.

The next meeting of the Bank of Canada will be held on 8 September.
It became known earlier that stock index in the industrial sector in Canada increased by 0.7% in June, while index of new orders in the same sector reduced by 0.3% in June.
Procurement in the industrial sector rose by 0.1%; purchase of foreign securities by Canadian investors went up to 4.01 billion CAD. This week Canadian statistics calendar is uneventful. Consumer price index for July which is scheduled to be released on Friday will be of interest

Current situation for the pair USD/CAD is mixed, as investors’ sentiments can change any moment. Proximity of the U.S., where economic recovery rate is slowing down, impacts on Canada. Labour market statistics leaves much to be desired. 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.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: Investors withdraw from Euro and looking for a safe harbor

At the Forex currency market the pair EUR/USD continues to fall – despite a slight rebound yesterday investors were selling Euro on Thursday night and go on selling this morning.

By 10:05 Moscow time the Euro is at 1.2801 against closing session level of 1.2852 yesterday.

It became known on Thursday that a number of unemployment benefit applications in the USA increased by 12 thousand within a week, while decline by 6 thousand was predicted. Thus the index is close to the annual maximum of 500 thousand which cannot but alert.

Traders turn to safe assets, to Japanese Yen in particular which is now between the devil and the deep sea. On the one hand investors demand for Yen bolster its growth; on the other local authorities’ comments prevent it from significant growth. The trades seem to be quite today for the major pairs: the day will be uneventful in terms of statistics which means that outflow of funds to safe harbor will continue.

Most likely the pair EUR/USD will be in the channel of 1.2740-1.2900 on Friday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: NZD: Kiwi rate declines again, oil prices exert pressure

At the Forex currency market the New Zealand Dollar rate is going down on Friday approaching a month lows. Pressure is exerted by the oil price which is close to 6 weeks lows and investors’ general tendency to risk aversion at the global capital market.
Short term trend seems to be downward, medium term trend is in range.
NZD/USD
Support levels: 0.7000, 0.6825.
Resistance levels: 0.7190, 0.7355.
The New Zealand economic situation has not changed; traders’ risk aversion desire is in the air at the Forex currency market which to a large extent is related with the NZD sales.
The head of the Reserve Bank of New Zealand Mr. Bollard noted today that GDP growth will continue in the future however economic recovery process has been gradual. Bollard also stated that inflationary pressure will intensify in the nearest future. 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 for the raw materials are still high, they have become more moderate”.
The data released earlier 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 quite long lasting.
Worth noting that according to the data released earlier (activity in the service sector in New Zealand in July: 30.50 (in June: 55.1). Consumers hold the purse strings due to the uncertainty in the projections for the world economy as a whole and New Zealand economy is particular.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: CAD: Canadian Dollar is losing ground

At the Forex currency market on Friday the Canadian Dollar is traded downward – as statistics released yesterday proved to be poor.
Short term trend for the pair USD/CAD – is ascending, medium term trend is in range.
USD/CAD
Support levels: 1.0250, 1.0100.
Resistance levels: 1.0500, 1.0585.
It became known yesterday that wholesale sales level in Canada declined by 0.3% in June while analytics expected growth by 0.4%. Stock growth amounted to 0.6% which also became a bad indication for the Canadian economy.
Following statistics release on Thursday, the pair USD/CAD bounced to 1.033, eliminating the CAD previous growth. That’s not all – leading indicators index in Canada increased by 0.4% in June, although market growth expectation had been up to 0.7%.
Thus, proximity of the U.S., where economic recovery rate slows down significantly, and statistics is not too good, does not turn to advantage of Canada. If we also add to it jobs reduction and decline in consumer prices level overall picture looks cheerless.
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%.
The next meeting of the Bank of Canada will be held on 8 September. It became known earlier that stock index in the industrial sector in Canada increased by 0.7% in June, while index of new orders in the same sector reduced by 0.3% in June.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: CHF: Swiss Franc is paying the price for the previous growth

At the Forex currency market on Friday the pair USD/CHF technical rebound is being observed after the decline yesterday. Signals however indicate that Franc’s consolidation can continue.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it is going up, giving ground for a pair buy signal. Stochastic Oscillator today is giving a similar signal, being in the neutral zone.

Forex recommendations: buyers’ targets today will be the levels of 1.0460 and 1.0400.

It became known yesterday that international trade surplus in Switzerland increased to 2.89 billion in July which the all-time high. Index obviously demonstrated correction. Some months ago the results have been reducing due to the Franc’s rapid growth. At the same time exports level in real terms increased by 1.9% in July, although nominally it decreased by 0.1% due to CHF cost.

Meanwhile exporters in Switzerland do not feel too confident, considering the Franc’s increase against the USD by 12% since the beginning of the year.

The latest Swiss statistics (producer price index and imports prices in July: -0.5% m/m, +0.5% y/y; unemployment rate: 3.8% in July against the level of 3.9% earlier) seems to be mixed; intensified by the high level of volatility at Forex, it made Swiss Franc fluctuate.
.
Meanwhile the economist Fabia Hiller stressed last week that labour market improvement will be gradual and according to the forecast unemployment rate will amount to 3.9% in 2010 on average.

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 actuated by the increase in the number of the registered cars. However business activity index in Switzerland is still not the most optimistic.

The next SHNB meeting will be held on 16 September. Market believes that even if the issue of the interest rate is raised at the meeting, the discussion will be superficial: first of all aid package shall be developed to prevent second bottom of recession and the issue of the expensive Franc which impacts on Swiss economy is also a matter to be discussed.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: GBP: British Pound Sterling retreats following the market

At the Forex currency market on Friday trading session is passive due to the lack of important statistics release. The British Pound which was traded upward yesterday in response of the positive statistics, failed to hold buyers’ interest. Closing session level on Thursday was close to the opening session levels. The Pound slips downward today.

Forex forecast: MACD indicator for the pair GBP/USD is close to the signal line and is not giving a clear signal. Stochastic Oscillator is giving a pair sell signal.

Forex recommendations: off the board.

Feasible events scenario at Forex: in case of breakdown at the level of 1.5500, the pair will go to 1.5460 and below. If the pair exceeds the level of 1.5550, buyers’ targets will be the levels of 1.5580 and 1.5610.

It became known yesterday that retail sales volume in Great Britain increased by 1.1% in July while analytics expected the rise by 0.3%. Number of approved mortgage applications was also quite high too.

David Blanchflower, a former MPC member is convinced that authorities shall abandon the use of austerity measures to reduce budget deficit and cut down a tax as a chance to bring the country on the firm ground. Worth noting that Blanchflower is an opponent of the tightening measures for the economy, assuming that people having jobs shall be offered tax incentives to stimulate expense items which will involve some economic growth. In his view there is a danger at the moment that any measures taken by the government will inevitably lead to the unemployment rate growth in the country.
Finance Minister Osborne stated this week that average income of about 61 billion pounds is expected due to the reduction in the departmental expenditures as a remedy for the budget deficit. Osborne also stressed that if efforts to reduce budget deficit are not taken and measures are not implemented it will look much like a shady enterprise, and authorities will not agree to it. Finance Minister noted that the politicians who speak about extra work to reduce debts will lead the country to collapse and economic downfall.
It became known earlier that houses prices index reduced by 1.7% on monthly basis in August, while a decline by 0.6% had been expected. As became known on Friday, houses prices in Great Britain and Wales increased by 0.1% on monthly basis (+8.1% y/y), in July which became the first growth factor over the last 5 months.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 20.08.10: AUD: Australian Dollar declines to the lows of August

At the Forex market on Friday the Australian Dollar rate continues to decline, while the Aussie sales rate does not go out.

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

Forex recommendations: sellers’ targets today will be the levels of 0.8860 and 0.8840.

It is uneasy in Australia today: Federal election in the country will take place this Saturday; the latest public opinion poll shows that voters swing to the opposition coalition which includes several parties. Julia Gillard, Prime Minister from the Labour Party is losing her popularity; her rating has dropped to 35% (-3%).

The Reserve Bank of Australia Deputy Mr. Batellino stated in his speech today that it is not clear if the rate in Australia will be changed next year or not. Target level of the RBA is 4.5%. The issue is being impacted by the U.S. situation where the economic recovery rate decelerates.
The interest rate now is at the level of 4.50% per annum. The main and official version –current level of the inflation decline cannot 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.
It became known last week that growth of unemployment had resumed in Australia – number of unemployed in the country increased by 23 thousand in July, while previously the rate went up by 37.4 thousand. Unemployment rate rose to 5.3% from 5.1%.
The minutes of the last meeting of the Reserve Bank of Australia in August, stated that GDP growth is expected to be above average in the next two years of 2011 and 1012; while core inflation level will amount to 2.75% in 2011 and in 3% in 2012. According to the document the Central Bank finds that current interest rate level is comfortable and will wait for the new data to analyze. RBA noted also that the inflation forecasts risks are both upward and downward, and expansion in the sector of natural resources will become the growth actuator.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 23.08.10: The rate of Euro is going up a little however background for the currency remains negative

At the Forex currency on Monday morning the situation seems peaceful: the Euro rebounded slightly following the previous fall, however economists assert that external background will be negative this week for the Unified European Currency.

By 9:30 Moscow time the Euro is at 1.2717 against closing session level of 1.2707 on Friday.

Investors continue to express concern regarding slowing down of the world economic growth; economic recovery prospect seems more and more obscure.

Traders are not in a hurry to carry out risky investments – funds outflow to Yen continues as it is traditionally considered to be a safe harbor.

The day is going to be uneventful in terms of statistics.

Most likely the pair EUR/USD will be in the channel of 1.2680-1.2790 on Monday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 23.08.10: GBP: British Pound is regaining from last week consolidation

At the Forex currency market on Monday the British Pound is traded upward; the currency is regaining from the previous decline following consolidation last week.

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

Forex recommendations: If buyers’ current sentiments maintain bulls’ targets today will be the levels of 1.5750 and 1.5840.

Last Friday was peaceful for the UK economy and investors sold the Pound amid risk aversion.

David Blanchflower, a former MPC member is convinced that authorities shall abandon the use of austerity measures to reduce budget deficit and cut down taxes as a chance to bring the country on the firm ground. Worth noting that Blanchflower is an opponent of the tightening measures for the economy, assuming that people having jobs shall be offered tax incentives to stimulate expense items which will involve some economic growth. In his view there is a danger at the moment that any measures taken by the government will inevitably lead to the unemployment rate growth in the country.
Finance Minister Osborne stated a week earlier that average income of about 61 billion pounds is expected due to the reduction in the departmental expenditures as a remedy for the budget deficit. Osborne also stressed that if efforts to reduce budget deficit are not taken and measures are not implemented it will look much like a shady enterprise, and authorities will not agree to it. Finance Minister noted that the politicians who speak about extra work to reduce debts lead the country to collapse and economic downfall.
It became known yesterday that retail sales volume in Great Britain increased by 1.1% in July while analytics expected the rise by 0.3%. Number of approved mortgage applications was also quite high.