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[LF.Anastasia]

AUD: Australian Dollar gained support from strong statistics

At the Forex currency market the Australian Dollar touched new highs today on strong labour market data.

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

Forex recommendations: in case of breakup at the level of 1.0465 the pair will go to today’s high 1.0486 and 1.0500.

A set of macro-statistics was published in Australia today:
– Unemployment rate decreased to 4.9% in March against the preliminary level of 5%;
– Employment increased by 37.8k in March against the forecast of growth by 24k.

Thereby strong labour market data supported aussie, having convinced investors of monetary policy tightening to resume earlier.
As a result of RBA meeting the day before the interest rate was left unchanged at the level of 4.75% per annum the day before – the officials didn’t resolve to tighten monetary policy for the fourth time. The decision was in line with expectations and didn’t evoke markets’ response.

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.
As it became known the day before, Housing finance in Australia fell by 5.6% m/m in February against the decrease by 4.5% in January. According to observers, the main reason for weak housing statistics were floods seen in Australia at the beginning of the year.

Macroeconomic background remained weak earlier: trade balance deficit was recorded for the first time since spring 2010 (-А$205 mln in February against +А$1.4 bln in January). Besides, AiG Performance of Service Index decreased to the level of 46.5 points in March against the level of 48.7 points in February.

 

[LF.Anastasia]

NZD: New Zealand Dollar experiences correction from highs

At the Forex currency market the New Zealand Dollar rate trades downward on Thursday amid technical rollback from the high at 0.7806.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is rising, maintaining a buy signal. Stochastic Oscillator remains in the overbought zone today, giving the same signal.

Forex recommendations: after technical correction buyers’ targets may become the levels of 0.7806 and 0.7820.

Today the situation in the national economy remains unchanged.

According to NZ monetary officials, there is no need in reducing the key interest rate again as the situation in the national economy looks rather stable.
Data released on trade balance last week turned out to be positive for the first time in 8 months. The main catalysts for this were high commodity prices and an increase in export levels of wood and dried milk. Export levels increased by 17% y/y in February, import – by 23% y/y to the level of NZ$3.86 bln. Export accounts for about 30% of NZ GDP and an increase in it will have a positive effect on the national economy.

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.

As it became known the day before, the 1q level of NBNZ Business Confidence in New Zealand, according to NIESR, decreased by 27% against the 4q level of +8 points.

Thereby the first 1q data is being published, yet rather weak. Still kiwi ignores the statistics. March data is not impressive: 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. It is difficult to judge on the reasons of such a rollback, and one should wait for the next data to judge on the trend.

 

[emdnur]

Thanks..............

 

[LF.Anastasia]

Euro/USD: Euro strengthens on the back of USD’s weakness

The pair EUR/USD is traded upward on Friday morning amid USD’s weakness that is being pressured by governmental instability and absence of decisions on budget.

By 9.00 Moscow time the Euro is at 1.4388 against Thursday closing session level of 1.4307.

The ECB raised the key interest rate to the level of 1.25% per annum from 1.00% per annum the day before. In its comments central bank stressed the intention to closely monitor the situation, so the markets suggested that another rate hike is likely to take place in June.

The Euro stepped back a bit, but after news about absence of budget decisions among democrats and republicans in USA that may result in partial dissolution of the government the pair EUR/USD started moving upward again.

Therefore the main growth catalyst for the pair remains USD’s weakness.

Most likely the pair EUR/USD will not go beyond the range of 1.4250-1.4420 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound continues to strengthen

At the Forex currency market the British Pound Sterling rate continues to strengthen on Friday.

Forex forecast: MACD indicator is rising in the positive area for the pair GBP/USD, giving a pair buy signal. It has pushed off the signal line earlier. Stochastic Oscillator remains in the overbought zone today, giving a similar signal.

Forex recommendations: in case current market sentiment preserves the pair will go to 1.6390 and 1.6420 at the end of the week.

BOE meeting the day before didn’t bring any surprises: the benchmark interest rate was left unchanged at the level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Current British currency strength calls forth USD’s weakness that is pressured by absence of decisions on budget.
According to the Minutes of the latest 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.

According to the BCC survey released the day before, 1q GDP in Great Britain is expected to come out at the level of 0.6-0.7%. Besides 1q sales among manufacturers may reach the level of +8 points against 4q level of +24 points, orders may decline to +22 points against +19 points seen previously.

1q sales among service providers are expected to come out at the level of +6 points against 4q level of +5 points, orders may grow to +5 points from -7 points seen previously.

According to the data released the day before, BRC Retail price index in Great Britain increased by 2.4% y/y in March against the increase by 2.7% y/y in February.

Important British statistics will be released April, 27 – 1q GDP that monetary officials hope to have grown by 0.7%. In case the economic growth is confirmed, interest rate in mid-term may be raised to 0.75% per annum.

 

[LF.Anastasia]

JPY: Japanese Yen after a slight correction found itself under pressure again

The Japanese Yen rate resumed downside movement at the Forex currency market on Friday after the news of a new earthquake in Japan.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is rising, confirming a former buy signal. Stochastic Oscillator stays in the overbought zone today, fiving a pair buy signal.

Forex recommendations: in case of a breakup at the level of 85.30 buyers’ targets will be 85.50 and 85.70.
A set of important statistics was released in Japan today:
– trade balance increased by 10.5% y/y in March;
– import levels increased 3.3% y/y, export grew 4.1% y/y;
– current account balance increased by 3.0% y/y in February against the decrease by 47.6% in January;
– unemployment rate totaled to 4.6% in February, not reviewed. In January the rate totaled to 4.9%.

The news turned out to be extremely positive, but it didn’t give support to the Japanese currency after the news of a new earthquake in Japan.
According to BOJ decision released after the meeting the day before, the key interest rate was left unchanged at the historical low of 0.0-1% per annum. The regulator stated, that national economy remains under strong downside pressure expected in the meantime. Later a moderate recovery will take place.

As noted by the officials, financial markets are in whole stable whereas a number of regions experiences production cuts and small business weakness.

Besides BOJ announced a new plan of extra financing amounting to Y1 trln.

All central bank’s movements now aim at stabilization lending for companies to be able to use cheap money in the wake of magnitude-9 earthquake. Part of the above mentioned measures was taken by BOJ after the quake of 1995, but in smaller volume terms.

According to observers, monetary policy tightening should not be expected until mid-2012, and stimulus programs will not be cut down for the nearest 6 months at least.

 

[LF.Anastasia]

CHF: Swiss Franc strengthens on the back of USD’s weakness

At the Forex currency market Swiss Franc rate strengthens on Friday while USD weakens amid investors’ concern on absence of budget decisions among democrats and republicans in USA.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is rising, maintaining a buy signal, but the volumes are decreasing weakening the signal. Stochastic Oscillator is sliding in the neutral zone today and is ready to enter the oversold zone, giving a pair sell signal.

Forex recommendations: sellers’ targets for today will be 0.9100 and 0.9080.

By morning the situation in Swiss economy remains unchanged.
According to the data released the day before, the level of CPI in Switzerland increased by 0.6% m/m (+1.0% y/y) in March against the forecast of growth by 0.2% m/m. It is a mixed factor for Swiss economy, because it indicates recovery as well as serious inflation pressure.
Level of three-month LIBOR is currently at the level of 0.25%.

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. A couple of weeks ago 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.

As it became known earlier, the level of real retail sales in Switzerland increased by 1.5% m/m in February against the decrease by 2.4% m/m in January. At the same time SVME-PMI index decreased to the level of 59.3 points in March against the level of 63.5 points seen previously. Thereby the data was mixed, but CHF didn’t respond to it remarkably, being pressured by USD amid strong U.S. macroeconomic data.
Today Swiss Franc rate may resume growth as a defensive currency.

 

[LF.Anastasia]

AUD: Australian Dollar surges for new highs

At the Forex currency market the Australian Dollar continues sound growth amid commodities prices’ increase as well as USD’s weakness.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is rising, giving a pair buy signal. Stochastic Oscillator today rises in the overbought zone, giving a similar signal.

Forex recommendations: buyers’ targets for today will be the level of 1.0540.

High commodities prices and today’s weakness of US Dollar give aussie a good chance to go even higher.
In whole the situation in the national economy remains principally unchanged.
As it became known the day before, Unemployment rate decreased to 4.9% in March against the preliminary level of 5%, Employment increased by 37.8k in March against the forecast of growth by 24k. Thereby strong labour market data supported aussie, having convinced investors of monetary policy tightening to resume earlier.

As it became known the day before, Housing finance in Australia fell by 5.6% m/m in February against the decrease by 4.5% in January. According to observers, the main reason for weak housing statistics were floods seen in Australia at the beginning of the year.
Macroeconomic background remained weak earlier: trade balance deficit was recorded for the first time since spring 2010 (-А$205 mln in February against +А$1.4 bln in January). Besides, AiG Performance of Service Index decreased to the level of 46.5 points in March against the level of 48.7 points in February.

As a result of RBA meeting the day before the interest rate was left unchanged at the level of 4.75% per annum the day before – the officials didn’t resolve to tighten monetary policy for the fourth time. The decision was in line with expectations and didn’t evoke markets’ response.
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 has a potential for strengthening

At the Forex currency market the New Zealand Dollar rate continues rising on Friday amid commodities prices’ increase and absence of budget decisions among democrats and republicans in USA.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is rising, giving a pair buy signal. Stochastic Oscillator gives the same signal remaining in the overbought zone.

Forex recommendations: after the breakup at the level of 0.7830 the pair will go to 0.7840 and 0.7855.

By the end of the week the situation in the national economy remains unchanged.
Data released on trade balance earlier turned out to be positive for the first time in 8 months. The main catalysts for this were high commodity prices and an increase in export levels of wood and dried milk. Export levels increased by 17% y/y in February, import – by 23% y/y to the level of NZ$3.86 bln. Export accounts for about 30% of NZ GDP and an increase in it will have a positive effect on the national economy.
As it became known the day before, the 1q level of NBNZ Business Confidence in New Zealand, according to NIESR, decreased by 27% against the 4q level of +8 points.

Thereby the first 1q data is being published, yet rather weak. Still kiwi ignores the statistics. March data is not impressive: 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. It is difficult to judge on the reasons of such a rollback, and one should wait for the next data to judge on the trend.

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.
According to NZ monetary officials, there is no need in reducing the key interest rate again as the situation in the national economy looks rather stable. This fact also gives support to kiwi.

 

[LF.Anastasia]

Euro/USD: the main pair is stable at the beginning of the week

The pair EUR/USD is traded slightly downward on Monday morning after a surge at the end of last week.

By 9.00 Moscow time the Euro is at 1.4463 against Friday closing session level of 1.4483.

The USD didn't feel a relief after democrats and republicans finally came to an agreement about 2H budget expenditures’ cut: temporary financing scheme still remains intact in USA and draft budget still has to go through channels before it is effective. U.S. President Barak Obama stressed at the end of last week that some sectors of economy would suffer from cuts in financing, but the main risk – partial resignation of the government – was removed.

Today will be rather calm in macroeconomic terms, so the external background will remain the main market driver.
Most likely the pair EUR/USD will not go beyond the range of 1.4380-1.4520 at the trading session on Monday.