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[LF.Anastasia]

AUD: Australian Dollar failed to stay in the positive area

At the Forex currency market the Australian Dollar rate is going down on Friday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go 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 1.0150 the pair will go to 1.0270 and to the local highs at 1.0200. in case of breakdown at the level of 1.0100, traders’ targets will be the levels of 1.0070 and 1.0050.

The situation in the Australian economy has not changed too much. The AUD is still afloat due to the overall optimism; however medium term trend for the currency seems downward.

As it became known earlier, 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]

EUR/USD: Euro started to regain lost positions

The pair EUR/USD is traded upward at the Forex currency market on Wednesday morning after two days of sales caused by the release of the U.S. positive macro- economic statistics.

By 9.40 Moscow time the Euro is at 1.3696 against closing session level of 1.3649 yesterday.

Two factors gave rise to the recovery of the purchase interest to the Euro: first of all the Euro went down to the levels, attractive for purchase (1.3524) and secondly, the U.S. statistics came out better than expected, which persuaded investors in prospects of stability and due to which the pressure of the information from Libya began to ease.

Thus, index of U.S. consumer confidence rose to the level of 70.4 points in February against expectations of 65 points and the previous revised value of 60.6 points. In addition, index of expectations increased to the level of 95.1 (87.3 previously) and index of current conditions went up to 33.4 points (31.1 point earlier).

Therefore, stability of the economic recovery in the U.S. reassured investors and trades are back to normal so far.

Today investors will be interested in statistic from Eurozone (industrial orders for December) and this afternoon the data on the U.S. houses sales will be released.

Most likely the pair EUR/USD will be in the range of 1.3590-1.3750 at the trading session today.

 

[LF.Anastasia]

GBP: British Pound began to recover on Wednesday

At the Forex currency market the British Pound rate strengthens on Wednesday after two days of severe sales.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not giving a clear signal. Stochastic oscillator is still giving a pair sell signal today, being in the neutral zone.

Forex recommendations: taking into account external background the pair can consolidate in the range. However, in case of breakdown at the level of 1.6190, bullish sentiment can intensify and buyers’ targets will become the levels of 1.6220 and 1.6250.

The situation in Great Britain remains unchanged today; no important data is going to be published.

The data on the public sector borrowing released yesterday inspired players, making it possible for the Pound to add about 20 pips, however it was not able to reverse general trend: the volume of net borrowing in Great Britain reduced to STG5.252 billion in January against the level of -STG0.095 billion a year earlier. Statistics released earlier showed that index of houses prices Rightmove increased by 3.1% m/m (+0.3% y/y) in Great Britain. It is worth noting that different agencies, which monitor real estate market in the UK, use different indicators and as a result published data from time to time differs diametrically.

Meanwhile Friday’s statistics gave chance for the Pound to soar up: level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of grow by 0.2% m/m; net mortgage lending in the UK remained invariable in January, at the level of STG 1.2 billion.

The Bank of England believes that risks of inflations have shifted upward at the moment and forecast of economic growth appears weaker than in November. In addition there are also risks associated with the household expenditure and the recovery of 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. 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 specific signs of the Pound.

 

[LF.Anastasia]

CHF: the rise of Swiss Franc continues

At the Forex currency market Swiss Franc rate continues to rise on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF, however it is prepared to intersect signal line from top to bottom, giving ground for a pair sell signal. Stochastic oscillator remains in the oversold zone on Wednesday, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.9330 the pair will go to 0.9300 and 0.9280.

The data released yesterday showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to weak demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favourable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is a factor of trade balance (index increased to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) helps the CHF to be considered a stable currency as the country does not require external borrowings.
This week will be eventful for Switzerland: employment rate excluding agricultural sector for QIV last year will be made public on Thursday, and leading indicator KOF in February will be released on Friday.

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.

As it became known earlier, 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. 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.

 

[LF.Anastasia]

JPY: Japanese Yen rate is putting on weight in the middle of the week

The Japanese Yen rate continues to grow for the second consecutive day at the Forex currency market on Wednesday, amid increased interest in the JPY as a safe harbor.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is still rising, confirming a previous buy signal for the pair. Stochastic Oscillator has approached oversold zone today and continues to give a pair sell signal.

Forex recommendations: in case of breakdown at the level of 82.50 the pair will go to 82.20 and 81.80/75.

The deputy head of the Bank of Japan Mr. Yamaguchi stressed this morning that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of high oil price.

The data released on Wednesday showed that deficit of trade balance in January amounted to Y471.4 billion against expected level of +Y37.1 billion; although it can be only a seasonal factor. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y).

This week rating agency Moody's Investors Service announced downgrading forecast of Japanese rating, which is Aa2 now, from “stable” to “negative” because growing budget deficit in the country and the lack of effective political measures are the risk factors for the national economy.

However, it did not affect the rate of the JPY yet: investors are too focused on the external background.

The data published earlier demonstrated that index of activity in all sectors of Japan continued to decline in December: by 0.2% m/m against similar reduction level in November. At the same time experts of Nomura Bank reported last week that the worst stage is over for the economy of the Country of the Rising Sun 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. That seems to be an interesting resonance.

In addition the data released earlier showed 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 earlier, 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.

 

[LF.Anastasia]

AUD: Australian Dollar tries to recover after sale

At the Forex currency market the Australian Dollar rate is recovering on Wednesday after the selling rally on Tuesday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it goes down slowly, confirming a pair sell signal. Stochastic Oscillator is giving a similar signal on Wednesday, being in the neutral zone.

Forex recommendations: in case of favourable external background the pair can rise to 1.0075, at the same time aggressive sellers can be back at the market, whose targets can become the levels of 1.0025 и 1.0000.

As became known today, index of labor cost in Australia rose by 1.0% on quarterly basis (+3.9% y/y) in QIV.

The data released yesterday showed that the level of business confidence in Australia declined by 5 points in QIV against the level of 9 points earlier. However the pressure from external background is getting stronger and the currency is being sold, due to investors’ withdrawal from risks.

No important publications is expected this week, therefore, external background will become the main activator for the pair. Situation in the Australian economy remains unchanged. The AUD is still afloat due to the overall optimism; however medium term trend for the currency seems downward.

Earlier the head of the Reserve Bank of Australia Glenn Stevens noted 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 better, than 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 RBA governor did not contain any fresh news for the market: Central Bank is satisfied with the pace of economy and mining sector seems to be an activator 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]

CAD: Canadian Dollar gains strength and regains losses

The Canadian Dollar rate switched over to growth at the Forex currency market on Wednesday after the decline this week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is going down, giving a pair sell signal. Stochastic Oscillator is giving a pair sell signal again today, being in the neutral zone.

Forex recommendations: if current sentiments will be maintained, traders’ targets today will be the levels of 0.9850 and 0.9810.

As became known yesterday, level of retail sales in Canada declined by 0.2% m/m in December, while sales excluding cars increased by 0.6% m/m.

Last week the head of the Bank of Canada Mark Carney noted that if economic data for QIV will be positive, it can encourage the revision of the view on economy by the Central Bank. Thus, Central Bank expects the growth of GDP by 2.3% y/y in the past quarter. The report will be made public as early as 28 February.

Earlier the Imperial Bank of Commerce reported the revision of its GDP forecast for QIV 2010 to 2.6% against the previous level of 2.3%; the Bank anticipates that economic growth this year will be by 2.6% (2.4% earlier).

The meeting of Bank of Canada was held in January where the regulator decided to keep interest rate unchanged, at the level of 1%. Given the non-uniform statistical data on the nearest neighboring country, the USA, a step is perfectly logical.

According to the experts from the International Monetary Fund, Canadian economy will grow by 2.3% y/y in the current year; this was a downgrade compared with the forecast of October (+2.7% y/y).

At the same time IMF expects that in 2012 Canadian economy will increase by 2.7%. The exact figures of the GDP growth in the country will be published on 28 February but meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

As for the exchange rate of the Canadian Dollar in the current year, IMF believes that if average prices for the oil will be maintained at about 90 dollars for the barrel (in October- $79 per barrel), the CAD will consolidate with the help of fundamental support provided by the raw material economy of the country.

 

[LF.Anastasia]

EUR/USD: Euro supports investors’ optomism

At the Forex currency market on Thursday the pair EUR/USD is traded slightly upward, continuing yesterday’s growth.

By 9.50 Moscow time the Euro is at 1.3754 against closing session level of 1.3748 yesterday.

Yesterday the head of the European Central Bank Trichet said that the regulator will take all measures required to maintain price stability, and having regard to this data, investors again came to the conclusion that the rate of the ECB will be raised a little earlier and started to buy the Euro until the end of the week.

At the same time the factor of Libya is still effective – instability in the Middle East countries remains in force, therefore it seems unlikely that the Euro will grow significantly.

This afternoon interest of traders will be focused on the U.S. macro statistics: data on new houses sales and a number of unemployment benefit requests will become known.

Most likely the pair EUR/USD will not go beyond the range of 1.3670-1.3810 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound does not go beyond the range again

At the Forex currency market the British Pound rate goes down on Thursday – the pair GBP/USD has been jammed in the range 1.6100-1.6275 for the past three days.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not forming a clear signal yet. Stochastic Oscillator is giving a pair sell signal today, staying in the neutral zone.

Forex recommendations: in case of breakdown at the level of 1.6150 traders’ targets today will be the levels of 1.6120 and 1.6080.

Yesterday representative of the Bank of England Miles noted that according to regulator’s estimates the process of scrapping of the program of stimulation is quite slow. Miles believes that there is no need in monetary policy tightening as suggested by the supporters of the rate increase who keep eye on inflation levels. According to him, sharp tightening of the monetary policy will harm British economy, while inflation will revert to its key level of 2% by the year 2012.

The data on the public sector borrowing released on Tuesday inspired players, making it possible for the Pound to add about 20 pips, however it was not able to reverse general trend: the volume of net borrowing in Great Britain reduced to STG5.252 billion in January against the level of -STG0.095 billion a year earlier. Statistics released earlier showed that index of houses prices Rightmove increased by 3.1% m/m (+0.3% y/y) in Great Britain. It is worth noting that different agencies, which monitor real estate market in the UK, use different indicators and as a result published data from time to time differs diametrically.

Meanwhile Friday’s statistics gave chance for the Pound to soar up: level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of grow by 0.2% m/m; net mortgage lending in the UK remained invariable in January, at the level of STG 1.2 billion.

The Bank of England believes that risks of inflations have shifted upward at the moment and forecast of economic growth appears weaker than in November. In addition there are also risks associated with the household expenditure and the recovery of British economy is unlikely to be smooth and soft.

 

[LF.Anastasia]

CHF: Swiss Franc is at the historical highs again

Swiss Franc rate continues to grow steadily at the Forex market on Thursday investors actively buy the currency in search of safe harbor due to the developments in Libya, which enabled the CHF to reach historical highs once more on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; earlier it crossed the signal line from top to bottom and continues to give a pair sell signal. Stochastic Oscillator remains in the oversold zone as before, giving a pair sell signal.

Forex recommendations: if bearish sentiment is maintained for the pair, traders’ targets will become the levels of.9250 and 0.9210.

As it became known today, employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information.

The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is a factor of trade balance (index increased to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) helps the CHF to be considered a stable currency, since the country does not require external borrowings.

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.

Leading indicator KOF in February will be released on Friday.