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[LF.Anastasia]

CHF: Swiss Franc once again demonstrates strength and growth

At the Forex currency market on Friday Swiss Franc rate continues to grow on Wednesday, keeping on the path, charted yesterday. The Franc is in demand again as a protective currency while external background remains ambiguous.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going up and is giving a weak buy signal; volumes are below average.. Stochastic Oscillator has pushed away from the oversold zone and is giving a sell signal, going down.

Forex recommendations: in case of breakdown at the level of 0.8400, the pair USD/CHF will go to 0.8380 and 0.8350.

If downward breakdown does not take place, the pair will consolidate close to the current levels.The data on inflation in Switzerland in June will become known this Thursday. Unemployment rate in June will be made public on Friday.Economic situation in Switzerland remains almost unchanged this morning.

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%).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).As it became known last Friday index of business activity PMI SVME in Switzerland decreased to 53.4 points in June against the forecast of 57.8 points and the previous level of 59.2 points.

 

[LF.Anastasia]

JPY: Japanese Yen remains within wide price range

The Japanese Yen rate is growing again at the Forex currency market on Wednesday – the JPY did not demonstrate definite dynamics over last week, changing direction of movement every day, remaining within wide price range of 80.25-81.30.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going upward slightly and is shaping a buy signal. Stochastic Oscillator is going up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 80.90, the pair will go to 81.10 and 81.25.

If the pair happens to be weak, the target for the pair will be the level of 80.50.It became known today that preliminary index of leading indicators in Japan rose by +2.4% m/m in May while the forecast had been +2.5%.

At the same time preliminary index of leading indicators in may rose by 3.6 points versus the reduction of 3.4 points in April. Indicator of delayed indices rose to 91.5 points (+0.7 points) in May. Based on statistics, authorities of Japan indicate that national economic situation has improved.

The data released last week showed that real expenditures of the 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.The head of the Bank of Japan Mr. Shirakawa said at the beginning of the week 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.

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.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 output had collapsed to 15%.

 

[LF.Anastasia]

AUD: Australian Dollar started to regain

The Australian Dollar rate started to regain at the Forex currency market in the middle of the week after two days of drawdown.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, however it is going up, maintaining a buy signal, volumes are increasing. Stochastic Oscillator is still going down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0735, the pair will go to 11.0750 and 1.0770.

Situation in the Australian economy has not changed significantly this morning.At the meeting of the Reserve Bank of Australia yesterday the decision was made to leave interest rate at the previous level of 4.75% per annum and according to the comments of the regulator, moderately restrictive monetary policy is consistent with the actual situation.

According to the RBA, the base rate will rise very gradually and economic growth in 2011 will be slower than expected. Stevens, the head of the RBA has said in the accompanying statement that Australian economy is gradually recovering after natural disasters, while European debt problems have a negative impact on the process.

Market expected that Stevens would give drop a hint at the time when the rate would be raised, however it did not happen. As per the RBA estimates, employment sector of Australia is in the stable state, unemployment rate is described as moderate lately, although it has not affected unemployment rate, which remains at the level of 5%. Vice president of the Reserve Bank of Australia Mr. Low, stressed earlier 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.

According to the data released earlier, 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.

At the same time activity index in the manufacturing sector of Australia increased by 5.2 points in June, to the level of 52.9 points. Thus, the index has exceeded the meaningful standard of 50 points and is now giving a positive indication.As it became known yesterday, level of retail sales in Australia fell by 0.6% m/m in May against the growth by 1.2% in April. The data is negative: reduction in the buyers’ interest indicates cautious attitude to economic outlook.

 

[LF.Anastasia]

NZD: New Zealand Dollar once again tends to grow

At the Forex currency market, the New Zealand Dollar rate begun to grow in the middle of the week, remaining nevertheless, within the five-day range of 0.8232-0.8331.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal, volumes are increasing. Stochastic Oscillator remains in the oversold zone, giving a similar signal; however tends to go downward out of the zone.

Forex recommendations: in case of breakdown at the level of 0.8290, the pair will retest the level of 0.8331 and will go to 0.8340.

As part of profit taking the AUD could sag to 0.8250/ 30.The report on New Zealand GDP, planned for today, was postponed until 14 July- the Bureau of Statistics said that more time is needed to review the indicators.However, it became known that net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast.

According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.Consumer confidence index Westpac in New Zealand increased to 112.0 points in Q2 against the level of 97.7 points in Q1. Consumer confidence ANZ increased to 112.5 points in June against the preliminary level of 103.3 points.

In addition, volume of retail sales in New Zealand rose for the first time in the last three quarters in Q1, which is a good sign of the economic recovery. Thus, indicator increased by 0.9% q/q which agreed with the forecast, excluding inflation. At the same time, 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 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 its 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.

It became known yesterday that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.

 

[LF.Anastasia]

EUR/USD: EURO remains at the lows of two weeks

The pair EUR/USD has slowed down its fall at the Forex currency market on Thursday morning; however it is still at the lows of two-weeks. By 9.20 Moscow time the Euro is at 1.4320 against yesterday’s closing level of 1.4318.

The reason for the massive sales yesterday was the decision of the National Bank of China to raise interest rate on one year credits and deposits starting from today. This measure is designed to restrain inflation in China which amounted to 5.5% in May and could exceed 6% in June.

Market awaits the meeting of the ECB today, and expects that the rates will be raised from the current level of 1.25% per annum by 25 basis points.In addition, the data on the U.S. labor market will be released in the afternoon.Most likely the pair EUR/USD will not go beyond the range of1.4280-1.4390 at the trading session in the middle on Thursday.

 

[LF.Anastasia]

GBP: British Pound has been declining for the third consecutive day

At the Forex currency market the British Pound Sterling rate continues to decline on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and goes down, giving a sell signal. Stochastic Oscillator is descending in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.5960, the target for the purchase will be the levels of 1.5940 and 1.5910.

If downward breakdown does not take place, the pair will consolidate close to the current levels.The meeting of the Bank of England will be held today; most likely the interest rate will remain unchanged at the level of 0.50% per annum. Follow-up comments of the head of the Bank Mr. King will be of interest.

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, had joined a conservative camp. As a result, 7 votes were against the rise in the interest rate and two for it.

According to Barclays estimates, British Pound is going to be pessimistic in pairing with the USD, which will be caused by weak demand in the country and probability of a new stage of decline in confidence. Position of the bank of England does not facilitate strengthening of the GBP. It is possible that in the near future confidence in financial and monetary policy will continue to decline in the UK and it is a negative factor for the GBP.

However, exchange rate remains low which eliminates a chance of sharp collapse of the Pound.As it became known today, retail price index BRC in Great Britain rose by 0.5% m/m (+2.9% y/y) in June against the level of +2.3% y/y in May. Price index for food rose by 5.7% y/y last month (+4.9% y/y in May). Increase in the index was the highest since October 2008, confirming the view that inflation is accelerating.

According to the latest information CPI in May amounted to 4.5%.In addition, permanent employment index KPMG/REC in the UK decreased to 52.2 points in June versus the level of 55.1 points in May. 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.

 

[LF.Anastasia]

CHF: Growth of Swiss Franc has slowed down

At the Forex currency market on Friday Swiss Franc rate is being corrected on Thursday after steady two -day growth.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, is going up and is giving a weak buy signal; volumes are below average. Stochastic Oscillator is going down in the neutral zone and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.8400, the pair USD/CHF will go to 0.8380 and 0.8350.

If downward breakdown does not take place, the pair will consolidate close to the current levels.Representative of the Swiss government noted yesterday that national economy is still in good shape despite strengthening of the national currency. As the same time, first signs of cooling in the export sector could be seen and if these symptoms will continue to develop, it will have a negative impact on the economy as a whole.

According to authorities, Swiss National Bank is solely responsible for the course of monetary policy and will likely to adopt new effective measures to achieve price stability soon.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%).

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).The data on inflation in Switzerland in June will become known today. Unemployment rate in June will be made public on Friday.

 

[LF.Anastasia]

JPY: Japanese Yen keeps positions within the range

At the Forex currency market the Japanese Yen rate does not show any significant changes on Thursday, staying in the previous range of 80.25-81.30.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going upward and is shaping a buy signal. Stochastic Oscillator is going up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 81.00, the pair will go to 81.10 and 81.25.

If the pair happens to be weak, the target for the pair will be the level of 80.50.Today, it became known that orders in the machine-building sector of Japan rose by 3.0% m/m in May against the fall of 3.3% in April. According to the Cabinet “orders are recovering, however some sectors are lagging behind”.

The indicator is usually considered as a leading index of corporate capital expenditures.The head of the Bank of Japan Mr. Shirakawa said at the beginning of the week 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.

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%. 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.As it became known in the middle of the week, 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 output had collapsed to 15%.

It became known yesterday that preliminary index of leading indicators in Japan rose by +2.4% m/m in May while the forecast had been +2.5%. At the same time preliminary index of leading indicators in may rose by 3.6 points versus the reduction of 3.4 points in April. Indicator of delayed indices rose to 91.5 points (+0.7 points) in May. Based on statistics, authorities of Japan indicate that national economic situation has improved.

 

[LF.Anastasia]

AUD: Australian Dollar is growing, amid employment statistics

The Australian Dollar rate continues to grow at the Forex currency market on Thursday amid positive statistics on the Australian employment rate, released this morning.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, however it is going up, maintaining a buy signal; volumes are increasing. Stochastic Oscillator is still going down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0740, the pair will go to 1.0750 and 1.0770. It became known on Thursday that employment rate in Australia rose by 23.4 thousand in June. Unemployment rate remained at the level of 4.9% last month, the same as in May.

Therefore, employment rate in the country has improved more than predicted (+15 thousand), mainly due to a record number of jobs (maximum of three years). This statistics partly relieves concerns about potential slowdown of the economic growth in Australia.The AUD is growing, amid such background, although tension in the external background has been maintained.Vice president of the Reserve Bank of Australia Mr. Low, stressed earlier 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.

At the meeting of the Reserve Bank of Australia yesterday the decision was made to leave interest rate at the previous level of 4.75% per annum and according to the comments of the regulator, moderately restrictive monetary policy is consistent with the actual situation. According to the RBA, the base rate will rise very gradually and economic growth in 2011 will be slower than expected.

Stevens, the head of the RBA has said in the accompanying statement that Australian economy is gradually recovering after natural disasters, while European debt problems interfere with the process.Market expected that Stevens would give drop a hint at the time when the rate would be raised, however it did not happen. As per the RBA estimates, employment sector of Australia is in the stable state, unemployment rate is described as moderate lately, although it has not affected unemployment rate, which remains at the level of 5%.

Number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6%; It became known Number of begun construction in Australia increased by 3.1% q/q in Q1, while the forecast had been -0.6% It became known earlier, that inflation expectations have remained at the level of May at 3.3% q/q in June. At the same time activity index in the manufacturing sector of Australia increased by 5.2 points in June, to the level of 52.9 points.

 

[LF.Anastasia]

NZD: New Zealand Dollar determines movement direction

At the Forex currency market, the New Zealand Dollar rate almost stands still on Thursday, trying to determine trading directions.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal. Stochastic Oscillator has come out of the oversold zone, and is going down, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8250, the pair will go down to 0.8235 and 0.8200.

Nature has created a negative factor for the New Zealand today: earthquake of magnitude 7.9 points have been recorded in the north-east of New Zealand this morning. The epicenter was located near the Islands of Kermadek and Tonga, at the depth of 48 km.The data released earlier showed that net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast.

According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.The report on New Zealand GDP, scheduled for the release this week, was postponed until 14 July- the Bureau of Statistics said that more time is needed to review the indicators.

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 its 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. It became known earlier that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.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 Chinese economy.