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[LF.Anastasia]

NZD: New Zealand Dollar is on sale at the local highs

The New Zealand Dollar rate is traded downward at the Forex currency market this morning, because players are moving away from risky positions. Testing of the new local highs yesterday also goes against the NZD today –the pair NZD/USD looks too overheated.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is moving along the signal line, not giving a signal. Stochastic oscillator remains in the overbought zone today, maintaining a pair buy signal.

Forex recommendations: correction can lead the pair NZD/USD to 0.7940. If a breakdown does not take place the pair will be traded close to the existing levels.

The situation in the economy of New Zealand remains almost unchanged.

Activity in March has not been impressive: business confidence index NBNZ fell to -8.7 in New Zealand against 34.5 in the previous period. It is difficult to judge which factor has caused such rollback and it is worth waiting for the new data to be able to speak about one or another trend.

Statistics released earlier showed that inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country was weaker than expected which indicates that recovery pace of the national economy is slow.

Statistics released earlier was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

addition it also became known that the level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates against the level of +8 points in QIV.

 

[LF.Anastasia]

Euro/USD: Euro continues to grow steadily

The pair EUR/USD continues to grow at the Forex currency market this morning; investors expect that following the meeting of the U.S. Federal Reserve today, the rate will be kept unchanged by the American regulator, who adheres to the strategy of long term low rates.

By 9.10 Moscow time the Euro is at 1.4686 against closing level of 1.4644 yesterday.

Thus, decision on the rate will be announced at 20.30; after 22.00 Ben Bernanke, the U.S. FR chairman, will start his first press-conference. The Dollar fell to the lows of 16 months by this morning.

It is possible that in the afternoon investors will fix some profit.
Most likely the pair EUR/USD will not go beyond the range of 1.4600-1.4720 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound grows again after correction

At the Forex currency market the British Pound Sterling rate started to grow today after three days of correction amid general optimism at the market.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is rising, giving a pair buy signal. Stochastic Oscillator continues to go down in the neutral zone, giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6500 the pair will go to 1.6520 and 1.6535. If the level of 1.6480 is exceeded, the level of 1.6450 will be the target of reduction.
The data on the UK GDP for QI will be made public today which will increase the volatility of the Pound Sterling.

Minutes of the last meeting of the Bank of England was released earlier; it showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still has no intention to start monetary tightening policy.
It is hardly probable that the rate will be raised before July-August this year.

Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.

According to the representative of the Bank of England Mr. Sentence, inflation in Great Britain can exceed the level of 5% soon. He believes that inflation will go up during the summer. “If we wait until all signals of inflation will turn from flashing yellow to red, it will be too late to raise interest rates from the accommodative level” he stressed in his interview to the foreign news agency.

 

[LF.Anastasia]

CHF: Swiss Franc does not grow weary of reaching new highs

At the Forex currency market Swiss Franc rate has reached historic highs once again on Wednesday morning, as the Dollar remains in the weak position because market is convinced that Federal Reserve will continue to keep rates at the low levels for a long time.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, giving a pair sell signal. Stochastic Oscillator has come into oversold zone today and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8720 the pair USD/CHF will retest 0.8671, historic highs, and then will go forward to 0.8650.

It became known yesterday that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc ignored this statistics.

The data of last week showed that economic sentiment index - ZEW increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economic recovery even regardless of strong Franc. The data of last week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agrees with the forecasts.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Three- month Libor rate remains unchanged, at the level of 0.25%.
Trade balance in Switzerland decreased to 1.09 billion francs in March against the revised value of 2.38 billion in February; and although economists had expected the reduction to 2.1 billion francs, supporters of the Swiss Franc were not deeply vexed.

 

[LF.Anastasia]

JPY: Japanese Yen is frustrated with the S&P forecasts

At the Forex currency market the Japanese Yen rate retreats in pairing with the USD on Wednesday, because bad forecast for the Japanese rating from S&P made investors feel frustrated. It is possible however, that “correction will be redeemed”: the USD is now even in the worse position.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY; it goes down and is ready to cross signal line from the top down and giving a pair sell signal. Stochastic Oscillator remains in the oversold zone today, giving a similar signal.

Forex recommendations: following upward correction it is possible that the pair USD/JPY will resume decline in the area of 81.45.

According to the data released this morning, international rating agency S&P has reduced prospects for Japanese AA rating to “negative” from the previous “stable”. In the follow- up comments observers of the agency explained that the process of rebuilding the country after the devastating earthquake and tsunami will only boost the public debt, which is already huge in the country.Some economists believe that Japan continues to suffer from poor management and evaluation of the earthquake in March may become the last straw for the government bonds market.

In addition it also became known that volume of retail sales in Japan fell by 8.5% y/y in March against the growth by 0.1% y/y in February. Yesterday’s data only confirms the negative status of the economy in the country of the Rising Sun: confidence in small business in Japan fell by 13.4 points in April, to the level of 36.1 points which became the lowest level since May, 2009, this is logically explained by the aftermath of the earthquake and tsunami in March.

Japan also considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

It became known at the beginning of the week, that the head of the Bank of Japan Mr. Shirakawa said that following the results in quarters I and II, it can be expected that level of GDP will decline, due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

 

[LF.Anastasia]

AUD: Australian Dollar has reached highs again due to strong statistics

At the Forex currency market the Australian Dollar rate has reached highs once again on Wednesday, with the help of support from macro-economic news and also because of the weakening USD.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes upward due to high trading volumes, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.07840 the pair will retest new highs at 1.0860 and will go further to 1.0875.

It became known on Wednesday that CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs, natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.

Unemployment rate reduced to 4.9% in March versus the preliminary level of 5.0% and employment rate rose by 37.8 thousand last month against the forecast of increase by 24 thousand. Therefore, strong performance in the employment sector pushed the AUD to go upward, instilling investors with the idea that the RBA can resume monetary tightening policy earlier. On the other hand deficit of trade balance was recorded in the country for the first time since spring 2010 (February -А$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

It became known in the middle of last week that index of prices for import increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.

Kevin Rood, Minister of Foreign Affairs of Australia said yesterday that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.

Level of lending in the private sector (rise by 0.4% in March) will be made public on Friday, as well as the data on the volumes of total lending.

 

[LF.Anastasia]

NZD: Nothing can prevent the rise of New Zealand Dollar

The New Zealand Dollar rate continues to grow at the Forex currency market on Wednesday; it has already managed to reach local peaks amid general good sentiment in the market.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is going up due to high trading volumes, giving a pair buy signal. Stochastic Oscillator continues to stay in the overbought zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8100 the pair will retest the level of 0.8111 again and will go to 0.8125.

The situation in the New Zealand economy has not changed fundamentally.

Statistics released earlier was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

In addition it also became known that level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.

Statistics released earlier showed that inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country turned out to be weaker than expected, which indicates that pace of economic recovery is slow.

 

[LF.Anastasia]

Euro/USD: Euro continues to grow steadily

The pair EUR/USD continues to be traded upward at the Forex currency market on Thursday morning, amid the fact that the U.S. Federal Reserve has kept interest rate in the previous range of 0-0.25% per annum and have no plans to change the rate in the nearest future.

By 9.20 Moscow time the Euro is at 1.4860 against closing level of 1.4787 yesterday.

Thus, Federal Reserve has left interest rate in the USA in the range of 0-0.25% per annum, reducing the country’s GDP forecast for this year and rising inflation forecast.

Now market is convinced that interest rate is not going to be raised, therefore it caused significant rise in the major pairs, which can be observed now.
The day is going to be eventful in terms of macro statistics, so the enhancement of volatility is possible.

Most likely the pair EUR/USD will not go beyond the range of 1.4780-1.4890 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound continues to grow

At the Forex currency market the British Pound Sterling rate continues to grow steadily amid general upswing of the market

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and goes up, giving a pair sell signal. Stochastic Oscillator remains in the overbought zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6730 the pair will retest local highs at 1.6745 and will move further to 1.6755.

The rise of Pound Sterling in the last two days is explained by the general upswing in the market – as long as the U.S. Federal Reserve keeps the rate in the previous low range, maintaining the opinion that the rate will be kept low for a long time, the market will use the news to its advantage.
Statistics released yesterday showed that the UK GDP increased by 0.5% on quarterly basis (+1.8% y/y) in QI, which agreed with the forecasts and was taken favourably by investors at Forex.

Minutes of the last meeting of the Bank of England released earlier showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still have no intention to start monetary tightening policy.

It is hardly probable that the rate will be raised before July-August this year.

Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.
The Pound moves upward at the moment just following the market trend.

 

[LF.Anastasia]

CHF: Swiss Franc maintains positions close to historic highs

At the Forex currency market Swiss Franc continues to grow today, maintaining positions close to historic highs amid weakening USD. Yesterday’s decision of the U.S. Federal Reserve on the rate and follow-up comments of the regulator has triggered only outflow of funds from the USD and impacted the rate of the Franc.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, giving a pair sell signal. Stochastic Oscillator has come into the oversold zone today and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8700 the pair USD/CHF will retest 0.8671, historic highs and will go to 0.8650.
The situation has not changed fundamentally in the economy of Switzerland.

It became known earlier that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.
Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Three- month Libor rate remains unchanged, at the level of 0.25%.
Trade balance in Switzerland decreased to 1.09 billion francs in March against the revised value of 2.38 billion in February; although economists had expected the reduction to 2.1 billion francs, supporters of the Swiss Franc were not deeply vexed.

The data of last week showed that economic sentiment index - ZEW increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economic recovery even regardless of strong Franc. The data of last week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agrees with the forecasts.