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[LF.Anastasia]

CHF: Swiss Franc continues to decline

At the Forex currency market Swiss Franc rate continues to retreat on Wednesday. The reason for protection currency sales is simple: investors at the global capital markets believe that the process of the global economic recovery will be continued at a steady pace, which reduce the interest in the protective currencies.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF and is going upward, giving a pair buy signal. Stochastic oscillator remains in the overbought zone, confirming this signal and creating conditions for trend reversal.

Forex recommendations: if current sentiment will maintain in the market and in case of breakdown at the level of 0.9650 the pair will go to 0.9675 and 0.9720. If a breakdown will not take place the pair can start consolidation close to the current levels.

Internal situation in Swiss economy has not changed much today.

We would remind that statistics on Swiss unemployment rate released yesterday showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand). According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.

The previous macro-economic statistics was mixed. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

In the meantime, the rollback of the CHF gives time for a breather for Swiss economy, as high levels of national currency seriously complicate the process of economic growth.

 

[LF.Anastasia]

JPY: Interest in Japanese Yen continues to decline

The Japanese Yen rate continues to retreat at the Forex currency market on Wednesday under the pressure from investors’ optimism regarding consecutive recovery of the global economic system.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is still going down, giving grounds for a pair sell signal. Stochastic Oscillator is in the overbought zone, creating conditions for the reverse movement direction.

Forex recommendations: currently bullish sentiment dominates in the pair and if it maintains, buyers’ targets today will be the levels of 83.00 and 83.60.

Representative of the ICF Mr. Shinohara said today that current price levels of the Yen are consistent with fundamental factors, while fiscal situation in Japan remains unfavourable, According to him ICF is concerned about rising prices for food.

The following Japanese data was released on Wednesday:

– Consumer confidence index in January: 41.1 against 40.1 in December;

– Orders for industrial equipment in January: +89.4% against +64.0% in December.

The data released yesterday was also positive:, current account balance in Japan increased by 30.5% y/y in December, to the level of +Y1.195 trillion. Maintenance of stability in economy is the most important magnet for investors, who transfer their assets into Japanese currency. As it became known this morning level of corporate bankruptcies in Japan reduced by 5.52% m/m in January, to the level of 1041. Reduction of bankruptcies and growth of the balance of payment surplus of the country are the indications of the national currency consolidation.

Worth noting that earlier representative of the Bank of Japan Mr. Kamezaki stressed that economy in the Country of the Rising Sun will overcome the phase of deceleration by spring; nevertheless careful monitoring of the developments is still required at Forex, where sharp fluctuation of currencies remains unwanted.

Monetary politicians anticipate high risk of downward movement from the USA and Europe. In Japan downside and upside risks appear balanced at the moment. Kamezaki also emphasized that Japan shall resolve its debt problems quickly, before the country losses creditability.

 

[LF.Anastasia]

AUD: Australian Dollar began to decline on Wednesday

At the Forex currency market the Australian Dollar rate began to decline in the mid-week under the pressure of the information released yesterday that National Bank of China had raised interest rate for credits and loans by 25 basis points.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to grow steadily, confirming high volumes. Stochastic Oscillator began to reverse, coming out of the overbought zone and going down, which gives a pair sell signal.

Forex recommendations: if current bearish conditions will maintain traders’ targets will become the levels of 1.0075 and 1.0050/45.

Today’s statistics showed that levels of consumer confidence Westpac in Australia increased by 1.9%, to 106.6 against the fall by 5.7& in January, to 104.6 points. The indicator is interesting because January had been extremely difficult for Australian economy (first of all, the country had been devastated by flooding, after that - by the tropical hurricane “Yassi”). According to preliminary estimates the damage caused by the disaster is estimated at A$20 milliard. Market believes that the rate will be increased after the pause at the level of 5.0% by the end QII, 2011.

At the moment the interest rate in Australia is at 4.75% per annum. Market thinks that Reserve Bank of Australia has many reasons why the regulator should restrain from the rise in rates and inflation is not the most impressive of them. Inflation levels are expected to grow, as flooding has brought losses to the farmers and their farms by an average of A$1 billion.

According to the data released last week, index of business activity in the construction sector of Australia fell to 40.2 in January against preliminary level of 43.8. The effect of the last natural disaster is obvious in the economy of Australia.

 

[LF.Anastasia]

EUR/USD: Euro goes up to the two –week highs

The pair EUR/USD is traded downward at the Forex currency market on Thursday morning because investors are waiting for the release of the U.S. positive statistics tonight.

By 9.40 Moscow time the Euro is at 1.3685 against closing session level of 1.3732 yesterday.

So, Thursday and Friday of this week will be eventful – this afternoon the data on the number of claims for unemployment benefits in the U.S. for this week will become known; it is assumed that the rate will drop by 5 thousand, to the level of 410 thousand (16:30 Moscow time).

In general, the situation for the pair EUR/USD remains stably positive despite the growth of the USD to the two-week highs today.

Most likely the pair EUR/USD will not go beyond the range of 1.3600-1.3750 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound is still uncertain

At the Forex currency market the British Pound is still in the suspended situation on Thursday – the currency does not demonstrate any certain trend since the beginning of this week.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to demonstrate growth, confirming a previous buy signal for the pair. Stochastic Oscillator has come into oversold zone, still giving a sell signal, and at the same time, creating conditions for the trend reversal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6150 the pair will go to 1.6200 and 1.6250. If the level of 1.6025 is exceeded, traders’ targets will become the levels of 1.6000 and 1.5960.

The data on the production volumes will be released today; at 15:00 Moscow time the Decision of the Bank of England on the interest rate will become known. Although market does not expect any surprises from the regulator, the GBP is going to have an uneasy day.

Statistics released yesterday was mostly positive: Index of retail prices BRC in January: +2.5% y/y against +2.1% y/y in December; GDP forecast for 2011: CBI: +1.8% against +2.0% for the previous period. Attention should be focused today on the comments of the Bank of England following the meeting- it will be interesting to know if the regulator has plans to increase interest rate over the next six months.

The situation in the British economy remained almost unchanged. We would remind that the study of the National Institute of Economic and Social Researches “NIESR” which was made public earlier agreed with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, while the main target will still remain the control of consumer prices growth.

NIESR expects that the rate will increase to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

Earlier NIESR has already made forecasts, which were not too rosy. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

 

[LF.Anastasia]

CHF: Swiss Franc fails to come out of the range

At the Forex currency market Swiss Franc rate remains in the range of 0.9523-0.9645 on Thursday, not making any attempts to come out of the range, although volume of the trades for the pair is above average.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it continues to go up, confirming a previous buy signal for the pair. Stochastic Oscillator continues to be in the overbought zone, giving a buy signal, and creating conditions for the indicator’s reversal

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9625 the pair will go to 0.9660 and 0.9710. If there is a breakdown at the level of 0.9575, traders’ targets will be the levels of 0.9525 and 0.9500.

The following Swiss data was released today:

– CPI increased by 0.4% m/m, +0.3% y/y in January, against the forecast of -0.2% m/m, +0.6% y/y;

– Consumer confidence SECO in January: 10 against preliminary level of 7.

Inflation rate indicates slowdown of the recovery process in Swiss economy and high rate of the Franc is also a party at fault for it. No official statements have been made yet.

We would remind that statistics on Swiss unemployment rate released yesterday showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand). According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.

The previous macro-economic statistics was mixed. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

 

[LF.Anastasia]

JPY: Japanese Yen continues to lose positions

The Japanese yen rate continues to demonstrate its weakness at the Forex currency market on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is sliding down, giving a pair sell signal. Stochastic Oscillator remains in the overbought zone on Thursday and confirms a buy signal, moving in parallel.

Forex recommendations: taking into account current sentiments in the market we can expect that bullish purchases will be continued for the pair with the targets at 83.00 and 83.50/60.

The following Japanese data was released today:

– Net orders in machine-building sector in December: +1.7% m/m against preliminary level of -3.0% and the forecast of +5.0%;

– Index of corporate goods prices in January: +0.5% m/m (+1.6% y/y) against the forecast of +0.3% m/m (+1.4% y/y) and preliminary level of +0.4% m/m.

Members of Japanese Cabinet noted analyzing statistics that although the rise in machine-building sector has been observed, the sector is weak in general and it is too early to speak about stabilization.

Note that representatives of the Japanese Concern Canon stressed today that current actual price levels of Japanese Yen are not justified. The company expects that the rate of the JPY will reduce to the level of 87 by July-December 2011.

Worth noting that representative of the Bank of Japan Mr. Kamezaki stressed earlier that economy in the Country of the Rising Sun will overcome the phase of deceleration by spring; nevertheless careful monitoring of the developments is still required at Forex, where sharp fluctuation of currencies remains unwanted.

Monetary politician anticipates high risk of downward movement from the USA and Europe. In Japan downside and upside risks appear balanced at the moment. Kamezaki also emphasized that Japan shall resolve its debt problems quickly, before the country losses creditability.

The data released earlier was also positive:, current account balance in Japan increased by 30.5% y/y in December, to the level of +Y1.195 trillion. Maintenance of stability in economy is the most important magnet for investors, who transfer their assets into Japanese currency. As it became known this morning level of corporate bankruptcies in Japan reduced by 5.52% m/m in January, to the level of 1041. Reduction of bankruptcies and growth of the balance of payment surplus of the country are the indications of the national currency consolidation.

 

[LF.Anastasia]

AUD: Sales for Australian Dollar has not yet discontinued

At the Forex currency market the Australian Dollar rate continues to go down on Thursday amid investors’ negative sentiment at the global capital market.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to tend upward, giving a buy signal. Stochastic oscillator goes up today, being in the neutral zone and indicating sale for the pair.

Forex recommendations: it seems possible now that traders’ positions for the pair will intensify, which will give grounds to consider that targets of the movement today will be level of 1.0025 and a parity level of 1.0000.

Statistics released this morning showed that employment rate in Australia increased by 24 thousand, to the level of 11.44 million in January, which was above the forecast of the economists, who expected the rise by 15 thousand

In addition, unemployment rate remained at the previous level of 5.0%.

A number of part-time jobs increased in January (+32 thousand against preliminary value of +0.6 thousand)

Therefore, despite natural disasters that befell on the Green Continent at the beginning of the year, one of the major guarantors of economic recovery, employment sector, remains stable.

Statistics released yesterday showed that levels of consumer confidence Westpac in Australia increased by 1.9%, to 106.6 against the fall by 5.7& in January, to 104.6 points. The indicator is interesting because January had been extremely difficult for Australian economy (first of all, the country had been devastated by flooding, after that - by the tropical hurricane “Yassi”). According to preliminary estimates the damage caused by the disaster is estimated at A$20 milliard. Market believes that the rate will be increased after the pause at the level of 5.0% by the end QII, 2011.

Current level of the interest rate in Australia is at 4.75% per annum. Market thinks that Reserve Bank of Australia has many reasons why the regulator should restrain from the rise in rates and inflation is not the most impressive of them. Inflation levels are expected to grow, as flooding has brought losses to the farmers.

 

[LF.Anastasia]

NZD: New Zealand Dollar continues to remain under the pressure of sales

New Zealand Dollar continues to go down at the Forex currency market on Thursday and volumes of sales indicate that bears are confident.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and tends to decline, giving a pair sell signal. Stochastic Oscillator started to go up, giving a pair buy signal.

Forex recommendations: considering external background we can expect that sales will be continued for the pair and potential targets will be 0.7630 and 0.7610.

In general the situation in the economy of New Zealand remained almost unchanged

The data on the business confidence NAB for January was released last week: the index demonstrated growth rate to 4 points against the decline by 3 points in December. Index of business conditions reduced to 6 points in the first month of the year against the previous value of 6. In addition the data on the houses prices in January became know, which showed reduction by 1.5% y/y against -0.9% y/y in December.

At the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years. However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

Statistics published earlier was pessimistic: it became known last week that unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%. At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

 

[LF.Anastasia]

EUR/USD: Euro continues to decline amid risk aversion

The pair EUR/USD is traded downward at the Forex currency market on Friday, continuing to experience external pressure

By 9.40 Moscow time the Euro is at 1.3559 against closing session level of 1.3602 yesterday.

So, the Euro fell below the critical level of 1.36 amid increasing geopolitical tension in Egypt and under the pressure from the news on Thursday that Axel Weber, head of Bundesbank is not going to aspire to the presidency of the European Central Bank in the future.

Due to the increased degree of tension in Egypt, the demand for safe currencies, such as the USD and Swiss Franc are increasing on Friday: yesterday, current leader of the country Hosni Mubarak has passed over some of his powers to the prime-minister, however he did not abandon this post.

The day is going to be eventful in terms of important statistics today – at 10 Moscow time the data on inflation in Germany in January will be known; at 16.30 Moscow time index of the trade balance of goods and services in the USA for December will be released. At 17.55 Moscow time the index of consumer confidence and current conditions of the Michigan University will be published.