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[LF.Anastasia]

AUD: Australian Dollar reached 28-year highs

At the Forex currency market the Australian Dollar rate reaches 28-year highs on Thursday – aussie shows steady growth on the stable external background. The upper channel for the AUD/USD preserves for the eleventh consecutive trading session without peculiar rollbacks.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues rising maintaining a buy signal. Stochastic Oscillator still stays in the overbought zone, giving a pair strong buy signal.

Forex recommendations: if bullish sentiment for the pair AUD/USD preserves the level of 1.0355 will be the target for buyers today. Consolidation makes sense.

The situation in the Australian economy remains unchanged on Thursday.

We would remind that leading indicator CB increased by 0.1% in January against the growth by 0.7% in December. It is the best indication for the medium term outlook of Australian economy; although it seems that external background overbalances this information. The data released earlier showed that leading indicators Westpac fell by 0.1% m/m in January while the forecast had been +0.8% m/m. It is a moderately negative sign for the Australian economy.

As noted by the representatives of the Bank of Australia earlier that economy of the country has been growing almost at the level of trend, and current moderately restrictive fiscal policy fits the external situation.

Interest rate is at the level of 4.75% per annum in Australia now. The meetings of RBA in 2011 will be held on 4 April, 2 May, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

Note that on the threshold of RBA meeting on Monday, April 4, the pair may lose steam, but it is still premature to stake on serious rollback.

 

[LF.Anastasia]

NZD: New Zealand Dollar is ready for technical correction

At the Forex currency market the New Zealand Dollar rate is aiming at technical rollback after nine consecutive sessions of growth and only a singular drop.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to rise steadily as the day before, preserving former buy signal. Stochastic Oscillator stays in the overbought zone.

Forex recommendations: in case bullish market sentiment remains intact, buyers’ target will become the level of 0.7640. If the correction strengthens, the pair may go to the level of 0.7550, from which it will probably continue rising.

As it became known on Thursday, the level of NBNZ business outlook in New Zealand declined to -8.7 points in March against the level of 34.5 points in February. As it became known the day before, trade balance in New Zealand increased to NZ$194 mln in February against the level of NZ$11 mln in January and forecast of growth to NZ$272 mln. In addition export levels increased by 17% y/y, import – by 23% y/y.
Thereby the released statistics is mixed – in this light full-fledged March data will be of interest.

Statistics released earlier showed that GDP in New Zealand rose by 0.2% m/m (+0.8% y/y) in QIV against the forecast of growth by 0.1% m/m, which support positive dynamics in NZD.

Besides, balance of current account in New Zealand decreased to -NZ$3.5 billion against the value of -NZ$1.77 billion in QIII. The balance is most likely decreased due to the seasonal factors and we surely can see improvement in the situation.

In the current situation it is obvious that speculative sentiment in the NZD/USD is growing, so the possibility of forthcoming correction can’t be ruled out because fundamentals for growth are fuzzy.

 

[LF.Anastasia]

Euro/USD: Euro rises on positive expectations

The pair EUR/USD is traded upward on Thursday morning – positive investors’ sentiment is prevailing, allowing the main pair to stay higher than the level of 1,41.

By 9.20 Moscow time the Euro is at 1.4173 against Thursday closing session level of 1.4156.

The pair strengthens on expectations of strong U.S. macro-statistics’ upcoming publication (at 16.30 Moscow time data on payrolls in March and rate of unemployment will be released).

In addition president of the Fed Bank of Minneapolis Narayana Kocherlakota said the day before, press reported, that she considers the federal-funds rate rise by 50 basis points by late 2011 quite acceptable.

Thereby the main reason that puts upside pressure on the pair EUR/USD on Friday is expectations of confirmation that the U.S. economic recovery is stable.

Most likely the pair EUR/USD will not go beyond the range of 1.4100-1.4220 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound recovers from yesterday’s evening selloff

At the Forex currency market the British Pound Sterling rate tries to recover on Friday morning from a selloff seen yesterday’s evening.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to decline nearing the signal line aiming at crossing it top-down, maintaining a sell signal. Stochastic Oscillator is rising in the neutral zone, giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6080 the pair will go to 1.6100 and 1.6120. If the level of 1.6040 is exceeded, the pair will have a chance to test 1.6000.

Important macro-statistics was published the day before, according to which the level of GfK Consumer confidence in Great Britain remained at -28 points in March against the forecast of reduction to -29 points. Thus consumer confidence still doesn’t improve: the main restrictive factor in country’s budget. Apparently, market needs a positive driver.

As it became known this week, the level of 4q GDP in Great Britain was revised to -0.5% q/q (+1.5% y/y) against the forecast of revision to -0.6% q/q. The released data was strong, but the pair GBP/USD remained under pressure and didn’t respond to it.

Chancellor of the Exchequer George Osborne sees two main risks for the British economy: inflation and eurozone economic crisis. According to his speech, one of the factors of faster inflation is weak Pound. However currency weakness is supportive for the economic balance – so the descending rate of GBP is rather advantageous for the British economy.

According to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds. Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. Following the meeting of the Bank of England it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Still the situation with the British Pound remains tense, in mid-term we may see decline and consolidation in the range 1.5950-1.6050.

 

[LF.Anastasia]

CHF: Swiss Franc stuck sideways

At the Forex currency market Swiss Franc rate remains in the range 0.9125-0.9276, but for the last two days the pair movements seem insignificant amid no demand on the Swiss Franc on neutral external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is rising, maintaining a former buy signal. Stochastic Oscillator left the overbought zone today and is decreading in neutral zone, giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakup at the level of 0.9200 the pair will go to 0.9210 and 0.9240. If the level of 0.9170 is exceeded, traders’ targets will be 0.9150 and 0.9130.

Today markets will be awaiting the data on retail sales and PMI index in Switzerland in February.

In whole the situation in the national economy remains unchanged by now.
Representative of Swiss National Bank Mr. Jordan said the day before that strong national currency is one of the main reasons for economic growth weakening and puts downward pressure on inflation. According to his speech current monetary conditions look favorable, but different market segments respond to them differently.

Expensive CHF is negative for exporters, prevents rates from stabilization and influences monetary policy tightening.
Swiss National Bank adopted measures of verbal intervention against the Franc last week: representatives of the SNB said following the meeting that strong currency is a hard burden for the economy and its inflated price will trigger a slowdown of economic growth – largely, due to the decrease of the export volumes.

Level of three-month LIBOR rate was left unchanged, at the 0.25%, as expected.
Note that verbal interventions are ordinary for SNB. Previously Swiss National Bank started to indicate that intervention of possible: representative of the regulator Mr. Dantin said that the Bank is able to ensure price stability even amid excess liquidity. In addition the politician noted that the cost of the intervention at the currency market will be determined by the information pressure.

 

[LF.Anastasia]

JPY: Japanese Yen weakens for the seventh consecutive session

The Japanese Yen rate continues weakening at the Forex currency market for the seventh consecutive session under the pressure of rising USD, which is the longest losing session since July 2005.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is going upward, giving a pair buy signal. Stochastic Oscillator stays in the overbought zone today, maintaining a similar signal.

Forex recommendations: in case of breakup of the level 83.50 the pair will move to 83.80 and 84.10.

Morning data according to which Tankan Non-Manufacturing Index in Japan increased to the level of +6 points in March against the level of +5 points in December were positive – but it is obvious that better part of the indicator was calculated before the earthquake of March, 11.

As it became known the day before, Manufacturing PMI in Japan according to Nomura decreased to the level of 46.4 points in March against the level of 52.9 points seen in February. The data is of no surprise taking into consideration the ravages after earthquake in March and the following tsunami.
Statistics for March came out weak as expected: the level of Small Business Confidence decreased to 49.5 points in March against the level of 56.6 points seen in February.

Meanwhile Tuesday’s data turned out to be strong (unemployment rate decreased to the level of 4.5% in February against the level of 4.9% in January; the level of retail sales rose by 0.1% y/y in February against the same increase in January), but these are indicators for February – outdated for now.
Currently it is obvious that aftermath of the earthquake in March will impact on the economy – according to the estimates of the World Bank disasters in Japan in March will reduce GDP of the country in the middle of this year by 0.25%-0.5%; however it is possible that rapid economic growth will follow after that.

It is likely that in the medium term the Japanese Yen rate in the pair USD/JPY may weaken to 85.0.

 

[LF.Anastasia]

AUD: Australian Dollar reaches new highs

At the Forex currency market the Australian Dollar rate continues rising on Friday, having reached a new 28-year high the day before – it is now at the level of 1.0374.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues rising, giving a pair buy signal. Volumes are growing. Stochastic Oscillator today stays in the overbought zone, but starts moving away from it aiming at forming sell signal.

Forex recommendations: if bullish sentiment for the pair AUD/USD strengthens the level of 1.0374, yesterday’s high, will become target for buyers for today. Still there is high possibility of correction at levels 1.0320 and 1.0280.

On the threshold of RBA meeting on Monday, April 4, the pair may lose steam, moreover there are serious signals for technical correction, but it is still premature to stake on a rollback.

Markets will take interest in comments of RBA officials about future rate and economic perspectives.

Today the situation in the Australian economy remains unchanged.
We would remind that leading indicator CB increased by 0.1% in January against the growth by 0.7% in December. It is the best indication for the medium term outlook of Australian economy; although it seems that external background overbalances this information. The data released earlier showed that leading indicators Westpac fell by 0.1% m/m in January while the forecast had been +0.8% m/m. It is a moderately negative sign for the Australian economy.

As noted by the representatives of the Bank of Australia earlier that economy of the country has been growing almost at the level of trend, and current moderately restrictive fiscal policy fits the external situation.
Interest rate is at the level of 4.75% per annum in Australia now. The meetings of RBA in 2011 will be held on 4 April, 2 May, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

 

[LF.Anastasia]

NZD: New Zealand Dollar consolidates near local highs

At the Forex currency market the New Zealand Dollar rate is traded calmly, consolidating near local highs at the end of the week.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to rise steadily as the day before, giving a pair buy signal. Stochastic Oscillator stays in the overbought zone, giving the same signal.

Forex recommendations: in case of breakup at the level of 0.7630 the pair will go to 0.7690. If the level is not exceeded, the pair will end the week in consolidation near current levels.

Today the situation in the New Zealand economy remains unchanged.

Statistics released earlier showed that GDP in New Zealand rose by 0.2% m/m (+0.8% y/y) in QIV against the forecast of growth by 0.1% m/m, which support positive dynamics in NZD.

Besides, balance of current account in New Zealand decreased to -NZ$3.5 billion against the value of -NZ$1.77 billion in QIII. The balance is most likely decreased due to the seasonal factors and we surely can see improvement in the situation.
In the current situation it is obvious that speculative sentiment in the NZD/USD is growing, so the possibility of forthcoming correction can’t be ruled out because fundamentals for growth are fuzzy.

As it became known on Thursday, the level of NBNZ business outlook in New Zealand declined to -8.7 points in March against the level of 34.5 points in February. As it became known the day before, trade balance in New Zealand increased to NZ$194 mln in February against the level of NZ$11 mln in January and forecast of growth to NZ$272 mln. In addition export levels increased by 17% y/y, import – by 23% y/y.

Thereby the released statistics is mixed – in this light full-fledged March data will be of interest.

 

[LF.Anastasia]

Euro/USD: Euro will decide on its direction in the morning

The pair EUR/USD is traded slightly downward on Monday morning – while investors decide on new week’s sentiment.
By 9.20 Moscow time the Euro is at 1.4220 against Friday closing session level of 1.4234.

The European Central Bank policy makers will decide on the main interest rate (April, 7) this week – markets await the increase to 1.25% (currently 1%).

Today investors will keep an eye on macro-statistics’ publication, including data on PPI index in eurozone in February (forecasted to rise by 6.7% y/y, a maximum increase since 2007).

In whole the external background remains neutral by morning.

Most likely the pair EUR/USD will not go beyond the range of 1.4180-1.4260 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound started the week with an upturn

At the Forex currency market the British Pound Sterling rate rises steadily this morning maintaining Friday’s trend.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and declines aiming at crossing the signal line top-down, but the volumes are minimal. Stochastic Oscillator continues rising in neutral zone aiming at entering overbought zone.

Forex recommendations: in case of breakup at the level of 1.6170 buyers’ targets will be 1.6190 and 1.6220.

Note that one should be cautious in buying.

The Bank of England will hold a meeting on Thursday this week, but is likely to leave the benchmark interest rate unchanged. Currently the key rate remains at 0.50%.

Important macro-statistics released earlier showed that the level of GfK Consumer confidence in Great Britain remained at -28 points in March against the forecast of reduction to -29 points. Thus consumer confidence still doesn’t improve: the main restrictive factor in country’s budget. Apparently, market needs a positive driver.

As it became known last week, the level of 4q GDP in Great Britain was revised to -0.5% q/q (+1.5% y/y) against the forecast of revision to -0.6% q/q. The released data was strong, but the pair GBP/USD remained under pressure and didn’t respond to it.

According to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds. Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. Following the meeting of the Bank of England it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Chancellor of the Exchequer George Osborne sees two main risks for the British economy: inflation and eurozone economic crisis. According to his speech, one of the factors of faster inflation is weak Pound. However currency weakness is supportive for the economic balance – so the descending rate of GBP is rather advantageous for the British economy.