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[LF.Anastasia]

CHF: Swiss Franc remains near historic highs

At the Forex currency market Swiss Franc rate is traded upward once again on Thursday, retaining its aim to retest new historic highs.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, making upward reversal and shaping a buy signal. Stochastic Oscillator has left the boarders of the oversold zone, giving a weak buy signal.

Forex recommendations: in case of breakdown at the level of 0.8330, the pair USD/CHF will go to new lows of 0.8275, and to 0.8260.

If downward breakdown does not take place, the pair will consolidate close to the current levels.It became known yesterday that leading indicators index KOF amounted to 2.23 points in June against the level of 2.30 points in May. The industrial sector index in June is expected to become known on Friday (forecast- reduction to 57.8 points against the previous level of 59.2 points).

The data released this week showed that consumption indicator UBS in Switzerland rose by 1.91 points in May against the growth by 1.57 points in April.Statistics released earlier showed that producer prices and prices for imports decreased by 0.2% (-0.4% y/y) in May against the forecast of growth by 0.1% m/m. It became known earlier that unemployment rate in Switzerland fell to 2.9% in May against the level of 3.1% in April and the forecast of 3.0%.

At the meeting last week Swiss National Bank left three- month Libor rate in the previous range of 0-0,75% with a tendency to 0.25%. At the same time, the SNB said that GDP growth would amount to 2% this year. Inflation in 2011 is predicted at around +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013: +1.7% (previously +2.0%).It is worth noting that index of PMI SVME in Switzerland increased to 59.2 points against the forecast of 57.5 points.

It proves once again that national economy has learnt to be effective even in circumstances where national currency is expensive.GDP in Switzerland has slowed down growth rate in QI this year, increasing by 0.3% on quarterly basis (+2.4% y/y) against the rise of 0.8% last quarter and the forecast of growth of 0.6 %. The data released earlier showed that CPI in Switzerland remained unchanged on monthly basis (+0.4% y/y) in May against the forecast of decline by 0.1% m/m (+0.3% y/y).

Representative of Swiss national Bank Mr. Brunetti noted today that growth rate of national currency reflects economic situation in the country, although the Franc soared sharply due to demand in currency –shelter. Swiss government does not influence on the exchange rate, he stressed, saying also that aggravation of the debt crisis in Europe threatens to bring more serious problems.

 

[LF.Anastasia]

JPY: Japanese Yen grows steadily

On Thursday morning the Japanese Yen rate keeps on steady growth which started yesterday at the Forex currency market.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, slightly goes up, shaping a buy signal. Stochastic Oscillator is going down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 80.10, the pair will go to 79.90 and 79.70.

If downward breakdown does not take place, the pair will consolidate at the achieved levels.Statistics released today showed that number of begun construction in Japan increased by 6.4% y/y in May, while the forecast of growth had been by 3.3%. Construction sector in the Country of the Rising Sun is reviving and it is a positive sign.

In addition, orders in the construction sector of Japan increased by 25.5% y/y in May against the level of +31.4% y/y in April.It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier. It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%.

This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic. According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April. It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.Statistics remain mixed.

Preliminary volume of retail sales in Japan reduced by 4.8% y/y in April against expectations of fall to -6.0% y/y; in addition, net CPI in Japan rose by 0.1% y/y in May against the increase of 0.2% in April. Japan has confronted with the rise in inflation for the first time over 28 months, which is crucial for the economy; however, it requires confirmation over the next few months.

Japanese consumer prices grew by 0.6% y/y excluding food, and prices for utilities and food skyrocketed.The data released earlier showed that preliminary retail sales in Japan decreased by 1.3% y/y in May, against the forecast of reduction by -2.2% y/y. The data was better than expected which was caused by the effect of the Japanese economic recovery after the disaster of 11 March.

It became known in the middle of the week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May. The data is above the forecast (5.5%). Recall that in March, when severe earthquake and tsunami hit the country, industrial production collapsed by 15%.

 

[LF.Anastasia]

AUD: Australian Dollar soared to May highs

At the Forex currency market the Australian Dollar rate continues to grow steadily on Thursday, due to stability of the external background.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, reversed in the negative zone and started to shape buy signal. Stochastic Oscillator continues to grow in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0735, the pair will go to 1.0750 and 1.7700.

It became known today that lending in the private sector of Australia increased by 3.1% y/y in May against expectations of +3.2%.In other respects macro-economic background of Australia remains unchanged.We would remind that vice president of the Reserve Bank of Australia, Mr. Low stressed last week that special efforts are required to maintain low and stable level of inflation.

According to him, previous growth of CPI was attributed mostly to the external factors and influence of the currencies’ exchange rates was insignificant.He also noted that very little unused spare capacity is left in the economy, and the upward pressure on inflation was caused by such facts as labour costs and growing prices for utilities.

Minutes of the last meeting of the Reserve Bank of Australia was released earlier; the document stressed that inflationary prospect in the country suggests further tightening; however recent macro-data does not encourage the rise in the rates. “Current inflation rate is partly due to the deflationary effects of the rise in interest rate and slowdown in the increase of expenditure for labour force,” stressed the document.

The AUD fell amid such background, since investors did not like uncertainty in the views of the RBA.According to the data released last week, consumer confidence index Westpac in Australia fell by 2.6% m/m, to 101.2 points in June against preliminary forecast of decline by 1.3%, to 103.9 points. In addition, a number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6%.

It became known yesterday, that inflation expectations have remained at the level of May at 3.3% q/q in June. Interesting situation is taking shape in the index swap Overnight: Investors’ opinion is reflected on the rate which can reach the level of 4.515 by December this year, and taking into account that the rate is now at 4.75% per annum, market incorporates a chance that interest rate will go down, amid deterioration of the global situation. However, these investors’ actions can trigger the Reserve Bank to make an opposite decision.

 

[LF.Anastasia]

NZD: New Zealand Dollar has shifted many-week highs

The New Zealand Dollar rate continues the growth which started earlier this week at the Forex currency market and has already shifted the highs to 0.8319.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and goes down, giving a sell signal; volumes are below average. Stochastic Oscillator reversed in the neutral zone and started to rise, giving a buy signal

Forex recommendations: in case of breakdown at the level of 0.8150, the pair will go to 0.81650 и 0.8190. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Stabilized external background remains the main driver for the NZD.

As it became known today, construction permits in New Zealand increased by 2.2% m/m in May against the forecast of growth by 3.2%. Economic growth of the country is still complicated.

According to the data released last week, consumer confidence index Westpac in Australia fell by 2.6% m/m, to 101.2 points in June against preliminary forecast of decline by 1.3%, to 103.9 points. In addition, a number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6%. It became known yesterday, that inflation expectations have remained at the level of May at 3.3% q/q in June.

The data of last week showed that current account balance amounted to -NZD$0.097 billion in Q1 against the forecast of -NZD$0.900 billion. Note that ratio of the deficit to GDP totaled to -4.3% in Q1 this year against the forecast of -4.4% and the level of -2.3% in Q4 last year. Index of trading conditions in Q1 increased to a 37 - year highs in Q1, demonstrating the growth of 0.9% on quarterly basis (+6.8% y/y), which could be one of the signs of economic recovery in New Zealand, as it reflects changes in prices for exports and imports.

As it became known this week, trade balance in New Zealand was at the level of NZD$605 billion in May against the forecast of NZD$1000 billion. This is a negative data, because decline in the trade balance will indicate decline in the level of exports later, which will be the impact of cooling in the Chinese economy.

Earlier, the Reserve Bank of New Zealand decided to keep interest rate unchanged at the minimum of 2.50% per annum, since it is going to continue to work on improvement in economic system. According to the head of the RBNZ, NZD has been overvalued because of high export prices for raw materials, therefore, national currency rate, which has increased over the last two months, has adverse impact on the rebalancing of the economy in New Zealand. Bollard expressed confidence that decline of the NZD will be gradual because currency intervention will not be able to change the trend.

 

[LF.Anastasia]

EUR/USD: Euro Continues to Grow Steadily

The pair EUR/USD is traded upward at the Forex currency market on Friday morning, completing this week with the increase for the first time on four weeks.
By 9.25 Moscow time the Euro is at 1.4516 against yesterday’s closing level at 1.4501.Markets continue to take advantage of the positive moment associated with the adoption of the five-year plan to reduce budget expenditures by Greece.
The plan had been earlier recommended by IMF and EU. In the coming weekend EU Finance Ministers will meet again to draw conclusions and make decisions on the allocation of a new tranche to Athens.
The release of ISM Manufacturing index is scheduled for this afternoon, which is expected to decline in June, and this is also a supportive factor for the major pair.Most likely the pair EUR/USD will not go beyond the range of 1.4450-1.4540 at the trading session on Friday.

 

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[LF.Anastasia]

EUR/USD: EURO has a chance to continue its growth

The pair EUR/USD is traded upward at the Forex currency market on Monday morning, amid continuing positive sentiment of investors.

By 9.10 Moscow time the Euro is at 1.4530 against closing level of 1.4524 on Friday.The day is going to be quiet in terms of macro-statistics; the U.S. trading floors are closed due to the Independence Day celebrations.

Investors are waiting for the ECB meeting this week, on 7 July, where the interest rate is projected to be raised from current 1.25%.Most likely the pair EUR/USD will not go beyond the range of 1.4480-1.4590 at the trading session in the middle on Monday.

 

[LF.Anastasia]

GBP: British Pound continues to grow slowly

At the Forex currency market on Monday morning the British Pound Sterling rate continues to demonstrate intention to grow, however currency does not have enough catalysts to steady growth.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and after breaking through the signal line from top to bottom earlier, it indicates a sell signal. Stochastic Oscillator has reversed in the neutral zone, pushing away from oversold zone and started to slide down.

Forex recommendations: in case of breakdown at the level of 1.6080, the target for the purchase will be the levels of 1.6100 and 1.6130.

If upward breakdown does not take place, the pair will consolidate close to the current levels.It became known last Friday that British manufacturing industry has slowed down its growth; as per CIPS/Markit estimates PMI index amounted to 51.3 points in June against the revised level of 52.0 points in May.

The data released earlier showed that volume of production in the service sector of Great Britain declined by 1.2% m/m (+0.8% y/y) in April. Net mortgage lending totaled to Stg1.098 billion in May versus stg1.047 billion in April.

Final GDP in the UK (third reading) increased by 0.5% on quarterly basis (+1.6% y/y) which agreed with the forecast. At the same time level of consumer spending fell by 0.6% on quarterly basis (-0.5% y/y) in Q1. The minutes of the last meeting of the Bank of England was made public earlier. It is clear now that only two aggressive monetary politicians have been left, they are: Wheal and Dale.

A new member of the MPC, Broadbent who substituted a “hawk” Sentence, joined conservative camp. As a result, 7 votes were against the rise in the interest rate and two for it. The Pound responded with a sharp decline.Representative of the Bank of England Mr. Fisher said yesterday that British Financial markets are under threat of significant risks and one of the risk factor at the moment could be stress tests in the event if their results will become a surprise for the markets.

Eurozone continues to hamper the UK: Fisher stressed that the sovereign debt crisis in Eurozone and general uncertainty of the macro-economic outlook threaten recovery of the financial market. Statistics released this week showed that consumer confidence Gfk in Great Britain fell to -25 points in June against the level of -21 points in May. After the record growth in April, the indicator is falling, showing that the royal wedding had been the only factor of growth in the past. Reduction of the indicator, which fell to the lows of 2010, has been observed in all five components.

“What really causes frustration of the government is the scale of reduction, which has nullified half of the increase of last month, so that consumer confidence reached the lowest level of the whole last year”, noted in the accompanying commentary GfK NOP. Meeting of the Bank of England will be held this week, where decision on the interest rate will be made.

 

[LF.Anastasia]

CHF: Swiss Franc moved away from highs

At the Forex currency market Swiss Franc rate almost stands still on Monday, as it has significantly moved away from new historic highs last week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, moving along the signal line and is not giving any signals. Stochastic Oscillator has reached oversold zone and is maintaining a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.8490, the pair USD/CHF will go to 0.8510 and 0.8530.

If upward breakdown does not take place, the pair will consolidate close to the current levelsThis Thursday, Swiss data on inflation in June will become known. On Friday, unemployment rate will be made public.It became known last Friday that business activity index PMI-SVME decreased to 53.4 points in June against the forecast of 57.8 points and previous value of the index of 59.2 points.Statistics released earlier showed that producer prices and prices for imports decreased by 0.2% (-0.4% y/y) in May against the forecast of growth by 0.1% m/m.

It became known earlier that unemployment rate in Switzerland fell to 2.9% in May against the level of 3.1% in April and the forecast of 3.0%. At the meeting last week Swiss National Bank left three- month Libor rate in the previous range of 0-0,75% with a tendency to 0.25%. At the same time, the SNB said that GDP growth would amount to 2% this year. Inflation in 2011 is predicted at around +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013: +1.7% (previously +2.0%).

Representative of Swiss national Bank Mr. Brunetti noted today that growth rate of the national currency reflects economic situation in the country, although the Franc soared sharply due to demand in currency –shelter. Swiss government does not influence on the exchange rate, he stressed, saying also that aggravation of the debt crisis in Europe threatens to bring more serious problem.

As the data released last week showed consumption indicator UBS in Switzerland rose by 1.91 points in May against the growth of 1.57 points in April.GDP in Switzerland has slowed down growth rate in QI this year, increasing by 0.3% on quarterly basis (+2.4% y/y) against the rise of 0.8% last quarter and the forecast of growth of 0.6 %. The data released earlier showed that CPI in Switzerland remained unchanged on monthly basis (+0.4% y/y) in May against the forecast of decline by 0.1% m/m (+0.3% y/y).

 

[LF.Anastasia]

JPY: Japanese Yen started this week with growth

At the Forex currency market the Japanese Yen rate is growing on Monday morning, staying nevertheless in the four-day range with the lower boarder of 80.25. The pair USD/JPY fails to exceed important level of 80.0 as yet.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, slightly goes up, shaping a buy signal. Stochastic Oscillator is going down in the neutral zone, giving a sell signal.

Forex recommendations: off the market.Feasible event scenario at Forex: in case of breakdown at the level of 80.90, the pair will go to 81.10 and 81.30.

However, if upward breakdown does not take place, the pair will aim at 80.30.The head of the Bank of Japan Mr. Shirakawa said today that economic growth of the Country of the Rising Sun has faced powerful downward pressure. Nevertheless 7 out of 9 regions of the country have revised their economic forecast upward.

According to the data released last week real spending of households amounted to -1.9% y/y in May against the level of -3.0% in April; net CPI level increased to +0.65% y/y in May against the level of +0.6% in April. Index Tankan was also presented towards the end; it showed that both, Japanese large and small companies have equally pessimistic view on the current situation however they believe in prospects and intend to work hard.It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier.

It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%. This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic. According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April.

It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.The data released earlier showed that preliminary retail sales in Japan decreased by 1.3% y/y in May, against the forecast of reduction by -2.2% y/y. The data was better than expected which was caused by the effect of the Japanese economic recovery after the disaster of 11 March.

It became known in the middle of last week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May. The data is above the forecast (5.5%). Recall that in March, when severe earthquake and tsunami hit the country, industrial production collapsed by 15%.