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[LF.Anastasia]

EURO/USD: EURO is underpressure again

The pair EUR/USD goes downslightly at the Forex currency market on Friday morning after the rebound lastnight.

By 9.30 Moscow time the Euro isat 1.4344 against yesterday’s closing level of 1.4362.

According to the decision ofthe European Central Bank interest rate in Eurozone was raised to 1.5% perannum, by 25 basis points, which agreed with market expectations. The head ofthe ECB, Mr. Trichet noted in the follow-up comments that it is still necessaryto maintain “super vigilence” and he also said that regulator hadchanged previous law on pledge for Portugal, whose rating was downgraded belowinvestment grade this week.

The U.S. statistics releasedyesterday was favourable and supported buyers.

Most likely the pair EUR/USDwill not go beyond the range of 1.4300-1.4400 at the trading session in themiddle on Friday.

 

[LF.Anastasia]

GBP: British Poundcontinues to become weaker

At the Forex currency marketthe British Pound Sterling rate continues to slide down on Friday morning,demonstrating weakness which is understandable.

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

Forex recommendations: in caseof breakdown at the level of 1.5930, sale target will be the levels of 1.5910and 1.5890. If downward breakdown does not take place, the pair willconsolidate close to the current levels.

According to the forecast madeby NIESR, GDP in Great Britain will rise by 0.1% in June against the revisedlevel of 0.5% in May. It is logical, because economic situation in the UKremains tense.

It is possible that in the nearfuture confidence in financial and monetary policy will continue to decline inthe UK and it is a negative factor for the GBP. However, exchange rate remainslow which eliminates a chance of sharp collapse of the Pound. According toBarclays estimates, British Pound is going to be pessimistic in pairing withthe USD, which will be caused by weak demand in the country and probability ofa new stage of decline in confidence. Position of the bank of England does notfacilitate strengthening of the GBP.

As it became known yesterday,retail price index BRC in Great Britain rose by 0.5% m/m (+2.9% y/y) in Juneagainst the level of +2.3% y/y in May. Price index for food rose by 5.7% y/ylast month (+4.9% y/y in May). Increase in the index was the highest sinceOctober 2008, confirming the view that inflation is accelerating.

According to the latestinformation CPI in May amounted to 4.5%.

In addition, permanentemployment index KPMG/REC in the UK decreased to 52.2 points in June versus thelevel of 55.1 points in May. The meeting of the Bank of England finishedyesterday: interest rate was kept unchanged at the level of 0.50% per annum.Statements on the monetary policy have not been made. It is likely that therate will remain at the current level until Q1 2012.

The minutes of the meeting willbe presented on 20 July.

 

[LF.Anastasia]

CHF: Swiss Franc is in disfavour

At the Forex currency marketSwiss Franc rate continues to weaken on Friday morning, as investors do notshow great interest in safe currencies.

Forex forecast: MACD indicatoris in the negative area for the pair USD/CHF, is going up and is giving a buysignal; volumes are below average. Stochastic Oscillator is going up in theneutral zone and is giving a similar signal.

Forex recommendations: in caseof breakdown at the level of 0.8460, the pair USD/CHF will go to 0.8380 and0.8350. If upward breakdown does not take place, the pair will consolidateclose to the current levels.

On Friday, the data on Swissunemployment rate in June will become known

As it was known yesterday, CPIin Switzerland fell by 0.2% m/m (+0.6% y/y) in June, while the forecast hadbeen +0.7% y/y.

Statistics released earliershowed 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 earlierthat unemployment rate in Switzerland fell to 2.9% in May against the level of3.1% in April and the forecast of 3.0%. At the meeting last week SwissNational 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 wouldamount 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%).

The data released earliershowed that consumption indicator UBS in Switzerland rose by 1.91 points in Mayagainst the growth of 1.57 points in April.

Representative of Swissgovernment noted the day before yesterday that national economy is still ingood 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 symptomswill continue to develop, it will have a negative impact on the economy as awhole.

According to authorities, SwissNational Bank is solely responsible for the course of monetary policy and willlikely to adopt new effective measures to achieve price stability soon.

 

[LF.Anastasia]

JPY: Japanese Yen continues to give way to USD

The Japanese Yen rate continuedto weaken at the Forex currency market on Friday and the JPY is losing ground,due to pressure from the USD.

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

Forex recommendations: in caseof breakdown at the level of 81.35, the pair will go to 81.50 and 81.65. If thepair happens to be weak, the target for the pair will be the level of 80.80.

Statistics released todayshowed that bank lending in Japan decreased by 0.6% y/y in June against theforecast of -0.5% y/y.

In addition, orders in themachine-building industry of Japan rose by 3.0% m/m in May against the fall of3.3% in April. According to the Cabinet “orders are recovering, howeversome sectors are lagging behind”. The indicator is usually considered asa leading index of corporate capital expenditures.

According to the data releasedearlier trade balance deficit in May (first 20 days) rose to Y1.053 trillionagainst the level of Y465 billion in April. It also became known that exportsvolume for the first 20 days in May totaled - 9.3% y/y versus the fall of-12.4% in April.

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

The head of the Bank of JapanMr. Shirakawa said at the beginning of the week that economic growth of theCountry of the Rising Sun has faced powerful downward pressure. Nevertheless 7out of 9 regions of the country have revised their economic forecast upward.

 

[LF.Anastasia]

AUD: Australian Dollardetermines movement direction at the end of the week

At the Forex currency marketthe Australian Dollar rate almost stands still on Friday after two-day ofintensive growth.

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

Forex recommendations: in caseof breakdown at the level of 1.0780, thepair will go to 1.0800 and 1.0820. In case of profittaking the pair can sag to 1.0720.

The economic situation inAustralia remains almost unchanged this morning.

At the meeting of the ReserveBank of Australia yesterday the decision was made to leave interest rate atprevious level of 4.75% per annum and according to the comments of the regulator,moderately restrictive monetary policy is consistent with the actualsituation. According to the RBA, the base rate will rise very graduallyand economic growth in 2011 will be slower than expected. Stevens, the head ofthe RBA has said in the accompanying statement that Australian economy isgradually recovering after natural disasters, while European debt problemsinterfere with the process.

Market expected that Stevenswould drop a hint at the time when the rate would be raised, however it did nothappen. As per the RBA estimates, employment sector of Australia is in thestable state, unemployment rate is described as moderate lately, although ithas not affected unemployment rate, which remains at the level of 5%.

Vice president of the ReserveBank of Australia Mr. Low, stressed earlier that special efforts are requiredto maintain low and stable level of inflation. According to him previous growthof CPI was attributed mostly to the external factors and influence of thecurrencies’ exchange rates was insignificant.

He also noted that very littleunused spare capacity is left in the economy, and the upward pressure oninflation was caused by such facts as labour costs and growing prices forutilities.

The AUD had found the lastcatalyst with the help of statistics: employment rate in the country isrecovering quicker than predicted in June: (+15 thousand); mainly due to arecord number of jobs (the highest level over three years). This statisticspartly relieves concerns about potential slowdown of the economic growth in Australia.

 

[LF.Anastasia]

NZD: NewZealand Dollar has raised highs once again

At the Forex currency market,the New Zealand Dollar rate continues to grow on Friday, after reachingmany-week highs yesterday.

Forex forecast: MACD indicatoris in the positive area for the pair NZD/USD, and is going up, giving a buysignal. Stochastic Oscillator has come into the overbought zone, and is goingdown, giving a buy signal.

Forex recommendations: in caseof breakdown at the level of 0.8340, the pair will rise to 0.8350 and0.8370.

Profit taking in the longposition could lead the pair away to 0.8270.

The data released earliershowed 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 beloweconomists’ forecast. According to the estimates of the Finance MinisterMr. English, budget deficit is still too large and active measures are requiredto reduce it.

The report on New Zealand GDP,scheduled for the release this week, was postponed until 14 July- the Bureau ofStatistics said that more time is needed to review the indicators.

Negative factor for the NewZealand Dollar was created by Nature yesterday: earthquake of magnitude 7.9points have been recorded in the north-east of New Zealand this morning. Theepicenter was located near the Islands of Kermadek and Tonga, at the depth of48 km.

However, market has recoveredfrom the news quickly and reverted to purchase of the NZD.

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

Trade balance in New Zealandwas at the level of NZD$605 billion in May against the forecast of NZD$1000billion. This is a negative data, because decline in the trade balance will indicatedecline in the level of exports later, which will be the impact of cooling inChinese economy.

Earlier, the Reserve Bank ofNew Zealand decided to keep interest rate unchanged at the minimum of 2.50% perannum, since it is going to continue its work on improvement in economicsystem. According to the head of the RBNZ, NZD has been overvalued because ofhigh export prices for raw materials, therefore, national currency rate, whichhas increased over the last two months, has adverse impact on the rebalancingof the economy in New Zealand. Bollard expressed confidence that decline of theNZD will be gradual because currency intervention will not be able to changethe trend.

 

[LF.Anastasia]

EURO/USD: EURO is once again under pressure

The pair EUR/USD is traded downward at the Forex currency market on Monday morning, amid new surge of concern regarding proliferation of debt problems in Eurozone.

By 9.30 Moscow time the Euro is at 1.4183 against closing level of 1.4262 on Friday.Italy has become the cause of sales this morning – publication Die Welt said at the beginning of the week that perhaps EU countries will have to increase the volume of the fund to finance the troubled countries of the Eurozone, as Italy has all chances to join these countries as well.

According to the European central Bank, which refers to the publication, the fund could be doubled, to 1.5 trillion euro.Macro-economic background is weak today; therefore markets will make use of the external information.Most likely the pair EUR/USD will not go beyond the range of 1.4090-1.4220 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound continues to be sale

At the Forex currency market the British Pound rate is in the focus of sellers’ attention again after slight rebound last Friday. Although current levels look attractive for purchases, investors do not intend to take risk.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, tends to make upward reversal, and is going to shape a buy signal. Stochastic Oscillator is descending 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 1.6020, target for the purchase will be the levels of 1.6035 and 1.6055. If case of breakdown at 1.5990, target for the purchase will become the level of 1.5970.Economists of JP Morgan reported last Friday that they have revised the UK GDP downward: most likely economy of the country will be either flat in Q2, or will demonstrate slight rise by the end of Q2. By the way, as predicted by OECD, British economy will rise by 0.1% in Q2.

According to the forecast made by NIESR, GDP in Great Britain will rise by 0.1% in June against the revised level of 0.5% in May. It is logical, because economic situation in the UK remains tense. According to Barclays estimates, British Pound is going to be pessimistic in pairing with the USD, which will be caused by low 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 either. Most likely loss of confidence in the finance and monetary policy of Great Britain will be continued - and it is a negative factor for the GDP. Although exchange rate remains low, eliminating sharp collapse of the Pound.The meeting of the Bank of England was held last week: interest rate was kept unchanged at the level of 0.50% per annum.

Statements on the monetary policy have not been made. It is likely that the rate will remain at the current level until Q1 2012. The minutes of the meeting will be made public on 20 July.It is worth noting that percentage of expectations of the interest rate growth has declined significantly over the past few weeks.

As it became known earlier, 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%.

 

[LF.Anastasia]

CHF: Swiss Franc started this week with slight correction

At the Forex currency market Swiss Franc rate is being slightly corrected on Monday after explosive growth in the status of the protective currency on Friday.

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

Feasible event scenario at Forex: in case of breakdown at the level of 0.8400, the pair USD/CHF will go to 0.8420 and 0.8450. If upward breakdown does not take place, the pair will aim at the level of 0.8350.It became known last Friday that aggregate unemployment rate in Switzerland increased to 3.0% in June against the forecast of 2.8% and previous level of 2.9%.

In addition, as it became known earlier, CPI in Switzerland fell by 0.2% m/m (+0.6% y/y) in June, while the forecast had been +0.7% y/y. However, supporters of the Franc were not frustrated with the data; although it was a negative economic signal. Demand in Franc grew steadily on Friday in the status of the protective currency.

The data released earlier showed that consumption indicator UBS in Switzerland rose by 1.91 points in May against the growth of 1.57 points in April.Representative of Swiss government noted the day before 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.

Earlier, at the meeting of Swiss National Bank, it was decided to leave 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%).

 

[LF.Anastasia]

JPY: Japanese Yen started this week with decline

At the Forex currency market the Japanese Yen rate is becoming lower on Monday after Friday’s growth.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going up, and is shaping a buy signal. Stochastic Oscillator is going down in the neutral zone and is giving an antipodal 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 turns out be weak, the target for the pair will be the level of 80.50.It became known today that consumer confidence index in Japan rose to 35.3 points in June against the level of 34.2 points in May. It is a good sign, showing that economy in the Country of the Rising Sun continues its slow but sure recovery.

Statistics released earlier showed that bank lending in Japan decreased by 0.6% y/y in June against the forecast of -0.5% y/y.As it became known earlier, 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 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. In addition, orders in the machine-building industry 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.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.