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[LF.Anastasia]

EUR/USD: Investors are not in a hurry to sell Euro

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

By 10.10 Moscow time the Euro is at 1.3558 against closing session level of 1.3568 yesterday.

Although interest in risk is declining at the market, the USD rate is in no hurry to regain its previous high position. Statistics on Eurozone (consumer confidence) is scheduled for release this afternoon, which is expected to be positive.

In addition the data on Conference Board, leading indicators index in the U.S. in January will be published this afternoon.

Thus, the day is going to be eventful in terms of macro-statistics which can impact forces alignment in the major pair.

Most likely the pair EUR/USD will not go beyond the range of 1.3480-1.3610 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: Obscure trades for British Pound moved to outset

At the Forex currency market trades for the British Pound Sterling are not steady on Thursday, as it determines movement direction.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it is sliding down, giving a pair sell signal. Stochastic Oscillator is giving an antipodal signal today, approaching overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6120 the pair will go to 1.6150 and 1.6180. If the level of 1.6080 is exceeded, traders’ targets will be the levels of 1.6050 and 1.6010.

According to the Bank of England, the risks of inflation are shifted upward at the moment and the forecast of economic growth appears weaker than in November. In addition, the risks associated with household expenditure are there as well; the recovery of the British economy is unlikely to be smooth and soft.

The head of the Bank of England Mervyn King emphasized that he can see imbalance of economic system in the country and does not approve market’s expectations of the interest rate increase. He reiterated that the regulator has never reported on the increase of interest rates in advance.

We would remind that statistics released earlier showed that level of CPI in the UK increased by 0.1% m/m (+4.0% y/y) in January against the growth by 3.7% y/y in December.

As the study, made by CEBR, the Center of Economic and Business Research, indicates, the clouds continue to thicken over the British real estate market, which was especially evident last month. Thus, according to the estimates of the Center, houses prices will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.

Analytics of the Center believe that the rise in prices can start in 1012 gradually, with the easing of credit conditions in the country.

Statistics showed on Wednesday, that unemployment rate in Great Britain remained at the previous level of 7.9% in December and a number of unemployment benefits requests increased by 2.4 thousand in January against expectations of reduction by 4.1 thousand.

 

[LF.Anastasia]

CHF: Swiss Franc gave Dollar a chance to regain

At the Forex currency market Swiss Franc rate is retreating slightly on Wednesday after three days of rapid growth. Trades yesterday were vague in the first half of the day; however by the evening the situation turned in favour of the CHF.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and resumed decline, giving a pair sell signal. Stochastic oscillator remains in the oversold zone today and is not giving a clear signal.

Forex recommendations: if bearish sentiment for the pair intensifies and in case of breakdown at the level of 0.9400 traders’ targets will be the levels of 0.9385 and 0.9350.

In general, the situation in Swiss economy where all attention is now focused on the rate of the CHF, still remains almost unchanged.

So, attention to the Swiss Franc has remained steadfast from both regulator and local authorities: expensive Franc has a real detrimental effect on Swiss economy, exerting pressure on the process of its recovery. This has been confirmed by Swiss authorities who reminded that strong Franc complicates correction of the national economy. Swiss authorities also stressed that SNB should influence on the rate of the Franc, working with it directly. This increases the possibility of the regulator’s unilateral intervention in the market, although probability of currency intervention is estimated as low so far. The head of Swiss National Bank Mr. Hildebrand said earlier, that in his opinion, stability of Eurozone is the key factor of economic growth in Switzerland. He also expressed confidence that the region will revert to quiet times.

Swiss authorities stated this week that country’s economy has faced a complicated situation; however it is not a crisis. Expensive Franc became a catalyst for the complications in the economic conditions. At the same time authorities declared that SNB does not influence in any way on the CHF rate, although it bears full responsibility for the monetary policy and its contents.

It became known yesterday that according to UBS estimates, consumer confidence index in Switzerland increased to the level of 1.842 in December against 1.624 in November. This is a positive indicator for the local economy. Therefore, the situation in Swiss economy remains ambiguous.

 

[LF.Anastasia]

JPY: Japanese Yen continues to go forward

The Japanese yen rate continues to go up smoothly at the Forex currency market today.

Forex forecast: MACD indicator for the pair USD/JPY in at the intersection with the signal line and directs upward. Stochastic Oscillator remains in the overbought zone today, however it is sliding down, giving a pair sell signal.

Forex recommendations: considering current market sentiments and in case of breakdown at the level of 83.50, traders’ targets will be the levels of 83.10 and 82.70.

It became known this morning that revised index of leading indicators in Japan increased by 0.8% in December; while index of coincident indicators was revised to+1.1%. As macro-data showed yesterday, actual GDP declined by 0.3% q/q (forecast-2.0% y/y) in QIV, 2010; index of capital expenditures increased by 0.9% q/q in QIV against +1.5% in QIII. Therefore, the main publication earlier this week- Japanese GDP was above forecasts, however this effect can be temporary, since the economy of the country is still in the complex situation.

Experts of the Nomura Bank reported this week that the economy of the Country of the Rising Sun is out of the wood; the worst stage has been struggled through and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession.

As it became known on Tuesday, at the last meeting the Bank of Japan decided to keep interest rate unchanged, in the range of 0-0.1% as expected. Nevertheless the regulator reported that he increased economic assessment, which became the first such factor over 9 months.

According to the regulator, Japanese economy is overcoming a recession stage amid increased rates of exports and other constituents. The head of the Bank Mr. Shirakawa said today that GDP in the country can show acceleration in the current quarter due to the increased demand from abroad.

 

[LF.Anastasia]

AUD: Australian Dollar remains in the range

At the Forex currency market the Australian Dollar rate is traded without a clearly defined trend, remaining in the range of 0.9950-1.0035 for the third day already.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it is going down, giving a pair sell signal. Stochastic oscillator has turned around from the oversold zone and is giving a pair buy signal.

Forex recommendations: off the market

Feasible event scenario at Forex: in case of breakdown at the level of 1.0075 the pair will go to 1.0095 and 1.0230. If an upward breakdown will not take place, the pair will continue to consolidate within the range.

The situation in the Australian economy has remained mostly unchanged. The AUD is still afloat due to the overall optimism; however medium term trend for the currency seems downward.

As it became known yesterday, that leading indicator Westpac in Australia was at the level of 0.8% in December against invariable level in November.

The data released on Monday showed that mortgage lending rose by 2.1% on monthly basis in December against the growth by 2.5% m/m in November. In general, the AUD did not pay much attention to this data, and started to increase correction.

The head of the Reserve Bank of Australia Glenn Stevens noted earlier that he expected stabilization of the national economy, due to which, interest rate would remain unchanged for some time. He also said that economic growth of the Australian economy could be higher, that the forecast, despite negative impact of the natural disaster, that befell on the country at the beginning of the year.

At the same time Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies. According to HSBC observers, the speech of the head of the RBA did not break new ground to the market: Central Bank is satisfied with the pace of economy and mining sector seems to be a driver for the recovery. It is not excluded that discussions about the rate increase will start as soon as the regulator gets familiarized with the CPI index for the QI.

 

[LF.Anastasia]

NZD: New Zealand Dollar remains close to the local lows

The New Zealand Dollar is close to the local lows at the Forex currency market on Thursday, still being under the pressure.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, however it is going down, confirming a previous sell signal for the pair. Stochastic Oscillator is coming out of the oversold zone today, starting to give a weak buy signal for the pair.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7565 the pair will go to 0.7600 and 0.7650. If an upward breakdown does not take place the pair will continue to consolidate close to the current levels.

The following New Zealand data was released today:

– Index of industrial activity in January: 53.7 against 53.2 for the previous period;

– Producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively;

– Consumer confidence index ANZ in February: 108.2 against 117.1 in January.

In addition Finance Minister of New Zealand said on Thursday that strong domestic currency does not support national economy, due to which economy does not look quite competitive.

The data on the business confidence NAB for January was released last week: 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.

 

[LF.Anastasia]

EUR/USD: Investors are not in a hurry to sell Euro on Friday

The pair EUR/USD is traded slightly downward at the Forex currency market on Friday after two days of growth.

By 10.15 Moscow time the Euro is at 1.3597 against closing session level of 1.3608 yesterday.

Investors are waiting for statistics from France this afternoon: index of business confidence in February) and from Italy: orders of industrial plants in December to determine movement direction on the last trading day of this week.

The data from Germany, which was released this morning, was positive: producer prices increased by 1.2% m/m in January, well above the forecast (+0.6%). In principle, the data can provide short term support to the Euro.

Most likely the pair EUR/USD will not go beyond the range of 1.3500-1.3650 at the trading session on Friday.

 

[LF.Anastasia]

GBP: optimism of the British Pound gained a victory at the end of the week

At the Forex currency market the British Pound Sterling rate is traded upward on Friday, continuing yesterday’s growth.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is slowly going down, giving a pair sell signal. Stochastic Oscillator has come into overbought zone today and is giving a pair buy signal.

Forex recommendations: if current sentiment at the market maintains, and in case of breakdown at the level of 1.6185/90 the pair will go to 1.6230 and 1.6250.

According to the representative of the MPC Mr. Sentence, inflation outlook, made public by the Bank of England, is overly optimistic. He believes that downside risks to inflation are underestimated in the report of the regulator and the rates should grow more actively. At the same time Sentence does not see any special signs of the Pound Sterling consolidation

In addition, the head of the Bank of England Mervyn King emphasized that he can see imbalance of economic system in the country and does not approve market’s expectations of the interest rate increase. He reiterated that the regulator has never reported on the increase of interest rates in advance.

We would remind that statistics released earlier showed that level of CPI in the UK increased by 0.1% m/m (+4.0% y/y) in January against the growth by 3.7% y/y in December.

As the study, made by CEBR, the Center of Economic and Business Research, indicates, the clouds continue to thicken over the British real estate market, which was especially evident last month. Thus, according to the estimates of the Center, houses prices will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.

In general, current outlooks for the pair GBP/USD seem optimistic.

 

[LF.Anastasia]

CHF: Technical pullback is Swiss Franc is taking shape for Swiss Franc

At the Forex currency market Swiss Franc rate is being corrected after four sessions of steady growth.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF, giving a pair buy signal. Stochastic Oscillator has come into oversold zone today, and is still giving a pair sell signal, creating a basis for a signal reversal.

Forex recommendations: buyers’ targets today will be the levels of 0.9530 and 0.9565.

As it became known yesterday, index of expectation ZEW in Switzerland increased to -17.2 points in February against the level of -18.4 points in January. In general, the situation in the country’s economy remains unchanged.

According to the newspaper Handelszeitung, currency intervention of the National Bank of Switzerland, carried out last year, has reached its objective, according to the head of the Bank, Philipp Hildebrand. He says that Switzerland has achieved price stability and got rid of the signs of inflation. We would remind that SNB had been buying the Euro since March 2009 until the middle of 2010 to limit the growth of Franc.

Hildebrand is confident that Switzerland is in more advantageous position now compared with Eurozone, where inflation amounts about 2%. Price stability, according to the monetary politician, does not give rise to complaints.

It became known earlier that 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.

Н We would remind that statistics on Swiss unemployment rate released last week 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.

 

[LF.Anastasia]

JPY: Demand for Japanese Yen has not been observed at the end of the week

The Japanese yen rate is traded downward at the Forex currency market on Friday, being technically corrected after the growth yesterday.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is going up, giving a pair buy signal. Stochastic oscillator has come out of the overbought zone today and is giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 83.10 the pair will go to 82.50 and 82.20. If the level of 83.50 is exceeded, buyers’ targets will be the levels of 83.70 and 83.90.

The minutes of the last meeting of the Bank of Japan on 25-26 January, released today were just a standard document without any further details. Judging by the minutes, it is not yet clear whether the continuation of the Japanese economy stabilization is worth waiting in the nearest future.

«Only a few committee members think that it is necessary to consider a possibility that steady growth of the global prices for the raw products will have a negative impact on the companies’ profit”. –said the minutes. “Part of the representatives stated that although there is high possibility that economy will revert to the moderate economic recovery, its future remains uncertain yet.

It became known yesterday that revised index of leading indicators in Japan increased by 0.8% in December; while index of coincident indicators was revised to+1.1%. As macro-data showed yesterday, actual GDP declined by 0.3% q/q (forecast-2.0% y/y) in QIV, 2010; index of capital expenditures increased by 0.9% q/q in QIV against +1.5% in QIII. Therefore, the main publication earlier this week- Japanese GDP was above forecasts, however this effect can be temporary, since the economy of the country is still in the complex situation.

Experts of the Nomura Bank reported this week that the economy of the Country of the Rising Sun is out of the wood; the worst stage has been struggled through and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession.