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[LF.Anastasia]

GBP: British Pound continues to grow amid USD weakness

At the Forex currency market the British Pound Sterling rate continues its growth, based on the USD weakness, because the Pound does not have its own incentives to rise.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, and is going up, giving a buy signal and approaching the intersection with the signal line. Stochastic Oscillator remains in the overbought zone, maintaining a buy signal.

Forex recommendations: in case of break down at the level of 1.6440, the pair will go to к 1.6455 and 1.6470.

If upward breakdown does not take place the pair will consolidate at the current levels. Monetary politician Osborne is confident that Great Britain remains a quiet habour, because national authorities are taking tough measures on fiscal policy. He believes that the country shall continue to adhere to consolidation plan to get rid of debts; meanwhile the Britain is able to keep away from recession.

Rejection from the fiscal plan at the moment will become a real threat to economic growth, thinks Osborne. It became known yesterday that preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.Moody’s believe that the UK DGP will rise by 1.6% this year; in 2012 – by 2.1%; while the growth in 2010 had been by 1.3%. At the same time unemployment rate will vary in the range of 7.8-8.0%.

The forecast of the agency is based on the belief that the Bank of England will raise interest rate by 25 basis points before the end of this year and by another 1% -over the next year.The report which was made public last week showed that CPI in Great Britain fell by 0.1% m/m (4.2% y/y) in June versus the forecast of growth by 0.2% m/m. In addition, overall trade balance in the UK amounted to -stg4.06 billion in May against the forecast of stg2.700 billion. It seems that the rise of imports in May triggered the growth of deficit in trade balance of the country.

According to the data released earlier, unemployment rate in the UK amounted to 7.7% in March-May, level of unemployed reduced by 26 thousand within the same period. The level of unemployed rose by 24 thousand in June, while unemployment rate amounted to 4.7%. The minutes of meeting of the Bank of England, which were made public earlier indicates that MPC ranks are still suffering from the split: Will and Dale continue to vote for the rate increase by 25 basis points.

In general, most members of the Monetary Committee believes it is very unlikely that tightening of the monetary policy can take place in the short term, moreover, there is an opinion that most likely economic weakness will last longer than expected.

 

[LF.Anastasia]

CHF: Swiss Franc indefatigably breaks new historic highs

At the Forex currency market Swiss Franc rate continues to grow on Wednesday morning, using instability of the external background as a support.

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

Forex recommendations: in case of breakdown at the level of 0.7990, the pair USD/CHF will go to 0.7980 and 0.7965.

Economic situation in Switzerland remains mostly unchanged. On Wednesday, investors will await publication of the leading indicators index KOF in July. Index of economic expectations ZEW in Switzerland amounted -58.9 points in July against the level of -24.3 points in June.Representatives of Swiss government noted earlier 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 observed and if these symptoms continue to develop, it will have a negative impact on the economy as a whole.Earlier, rating agency Fitch confirmed the ranking of Switzerland at the level of AAA, with a “stable” forecast.According to the representative of Swiss National Bank Mr. Jordan, Switzerland went through the crisis easier than other countries largely, due to its monetary policy and if the country will return to deflation, the CNB knows how to fight it off. Jordan is concerned, however about recent dynamics of the EUR/CHF, saying that risks will increase when Italy joins the list of the EU problematic countries.

According to authorities’ evaluation, Swiss National Bank is solely responsible for the course of monetary policy and in the nearest future it is likely to adopt new, effective measures to achieve price stability.The data released earlier showed that trade balance in Switzerland totaled +1.74 billion francs in June against preliminary revised level of +3.25 billion francs.

Three- month Libor rate remains 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 continues to go with the ascending flow

Japanese Yen rate is traded upward at the Forex currency market on Wednesday, continuing to go in the previous flow because of the USD weakness.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shaping a sell signal; volumes are high. Stochastic Oscillator goes down in the neutral zone, giving a sell signal and tightly approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 77.55, the pair will go to 77.40 and 77.20.

At the last meeting, the Bank of Japan decided to leave interest rate unchanged in the target range of 0-0.1% per annum, as expected.Lending program was also left unchanged in the amount of 30 trillion yen. According to the Bank estimates, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%.

On Tuesday morning, Finance Minister Mr. Noda stressed that authorities continue to closely monitor situation with the Yen and one should be prepared to its further growth. Last week Mr. Noda had already paid attention to the expensive Yen. He noted that the Yen is moving only in one direction lately. He believed that stabilization in Greece would encourage improvement of the general situation in the market.Representative of the Bank of Japan Mr. Yamaguchi said that high rate of the JPY had no effect on the actual state of economy.

Trade balance in Japan increased to the level of +Y70.7 billion in June against the forecast of -Y149.0 billion; therefore the balance exceeded limits of the two-month downfall of deficit. It is of interest that starting from this June the Bank of Japan is going to raise its estimate for economic growth in the country, as the growth in the production volumes has triggered revival of exports, and, at the same time, private demand is also growing. Exports in Japan decreased by 1.6% y/y last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.As long as positions of the USD remain weak, the JPY will be able to rise to 77.0.

 

[LF.Anastasia]

AUD: Australian Dollar has reached 30-year highs again

At the Forex currency market the Australian Dollar rate continues to grow steadily in the middle of the week and has already reached 30-year highs again, and established a peak at the level of 1.1063.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, it goes up, giving a buy signal. Stochastic Oscillator has reached overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 1.1000, the pair will try to reach the highs at 1.1063 and further at 1.1075.

If upward breakdown does not take place, the pair will consolidate close o the current levels.Statistics released in the morning has inspired the AUD: CPI in Australia increased by 0.9% q/q (+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q. The data was above expectations and supported the rise in the pair AUD/USD.It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May.

At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%It became known earlier that leading indicator in Australia fell by 0.3 points in June, to the level of 279.5 points, as per Westpac estimates. Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1.

As it was made public last week business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points. At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points).

According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain.Import price index in Australia rose by 0.8% in Q2 against the forecast of -1.1%. At the same time, export price increased by 6.0% in Q2 against the forecast of +4.5%.

Growth in exports last quarter was attributed largely due to the rise in exports of lubricants, mineral oil and also related materials.The data on the volume of lending in the private sector is going to be released on Friday.

 

[LF.Anastasia]

NZD: Long positions for New Zealand Dollar are not justified

The New Zealand Dollar rate continues to rise at the Forex currency market on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal; volumes are high. Stochastic Oscillator remains in the overbought zone; however, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8750, the pair will go to 0.8765 and 0.8780.

The pair could drop to 0.8600 as part of correction.As it was made public today, index of business confidence in New Zealand increased to 47.6 points, as per NBNZ estimates, against the level of 46.5 points in May. Index of inflationary expectations fell to 3.15% (previously: 3.20%) and indicator of prospects with the account of activity increased to 43.7 points last month (38.7 points earlier).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.Statistics released earlier showed that GDP in New Zealand rose by 0.8% on quarterly basis (+1.4% y/y) in Q1 against the forecast of growth by 0.3% q/q (+0.5% y/y). The indices have been very favourable, which supports the NZD. It is possible that the data will be less positive in Q2; however in general, the trend will remain the same, which is favourable for the pair NZD/USD in the long term.

According to statistics released on Tuesday, trade balance in New Zealand increased by NZ$230 billion in June against the forecast of NZ$400 billion. Slowdown in surplus was logical in June: volume of growth rate in imports and exports fell last month. Thus exports increased by 4.5% in Q2, to NZ$12.2 billion; imports dropped by 1%, to the level of NZ$11.8 billion.

Exports to China and Australia fell sequentially: to +1.3% y/y (+24.2% y/y earlier) and 1.2% y/y (+4.7% y/y earlier) respectively.CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand.There is speculation in the market that the Reserve Bank of New Zealand is looking closely at market’s reaction to the measures to resolve debt crisis in Europe which might imply a disposition to raise the level of the interest rate at the meeting next week.

 

[LF.Anastasia]

EUR/USD: Euro has found a good cause to rollback

The pair EUR/USD is traded downward at the Forex currency market on Thursday morning, since it was made public yesterday that ranking of Greece has been downgraded once again.

By 9.10 Moscow time the Euro is at 1.4353 against yesterday’s closing level of 1.4368.Although the issue of the U.S. public debt is still left open, correction in the major pair has been outlined with the help of the external news. It became known yesterday that rating agency S&P downgraded Greece rating to the level of CC from the previous CCC with the “negative” forecast.

The agency explained in the follow-up comments that this decision was based on the concern about exchange of Greek bonds as a part of a new aid plan to Athens.Markets will probably need to regain from this information as well today.Most likely the pair EUR/USD will not go beyond the range of 1.4300-1.4400 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: Correction in British Pound did not take long to wait

At the Forex currency market the British Pound Sterling rate is being corrected on Thursday, amid deterioration of the situation in the pair EUR/USD, with which the Pound has been correlated closely lately.

Forex forecast: MACD indicator for the pair GBP/USD, has broken through the signal line from bottom to the top and is now in the positive area, maintaining a buy signal. Stochastic Oscillator tends to come out of the overbought zone and started to shape a sell signal.

Forex recommendations: off the market.Feasible event scenario at Forex: in case of break down at the level of 1.6340, the pair will go to 1.6355 and 1.6370.

If upward breakdown does not take place, the pair will consolidate at the current levels. Representative of the Bank of England Mr. Miles noted today that there is still a chance that British economy will slide into recession, according to him, economic growth rate has slowed down and no one can deny yet that there are problems with inflation, CPI might also continue to grow in the short term. In consideration of the data of the last 12 months production output increased only by 0.8%.

Finance Minister Osborne is confident that Great Britain continues to hold a status of a quiet habour, because national authorities are taking tough measures on fiscal policy. He believes that the country shall continue to adhere to consolidation plan to get rid of debts; meanwhile the Britain is able to keep away from recession. Rejection from the fiscal plan at the moment will become a real threat to economic growth, thinks Osborne.

The report which was made public last week showed that CPI in Great Britain fell by 0.1% m/m (4.2% y/y) in June versus the forecast of growth by 0.2% m/m. In addition, overall trade balance in the UK amounted to -stg4.06 billion in May against the forecast of stg2.700 billion. It seems that the rise of imports in May triggered the growth of deficit in trade balance of the country.

According to the data released earlier, unemployment rate in the UK amounted to 7.7% in March-May, level of unemployed reduced by 26 thousand within the same period. The level of unemployed rose by 24 thousand in June, while unemployment rate amounted to 4.7%. The minutes of meeting of the Bank of England, which were made public earlier indicates that MPC ranks are still suffering from the split: Will and Dale continue to vote for the rate increase by 25 basis points.

In general, most members of the Monetary Committee believes it is very unlikely that tightening of the monetary policy can take place in the short term, moreover, there is an opinion that most likely economic weakness will last longer than expected.It became known earlier that preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.Moody’s believe that the UK DGP will rise by 1.6% this year; in 2012 – by 2.1%; while the growth in 2010 had been by 1.3%. At the same time unemployment rate will vary in the range of 7.8-8.0%.

The forecast of the agency is based on the belief that the Bank of England will raise interest rate by 25 basis points before the end of this year and by another 1% -over the next year.

 

[LF.Anastasia]

CHF: Swiss Franc remains near new historic peaks

At the Forex currency market Swiss Franc rate is still near new historic highs on Thursday, while external background remains extremely tense.

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

Forex recommendations: in case of breakdown at the level of 0.7990, the pair USD/CHF will go to 0.7980 and 0.7965.

It became known yesterday that leading indicators index KOF in Switzerland fell to 2.04 in July against the forecast of 2.11. This has become another sign of slowdown in Swiss economy.The data released earlier showed that trade balance in Switzerland totaled +1.74 billion francs in June against preliminary revised level of +3.25 billion francs.Three- month Libor rate remains 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%).Representatives of Swiss government noted earlier 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 observed and if these symptoms continue to develop, it will have a negative impact on the economy as a whole.Earlier, rating agency Fitch confirmed the ranking of Switzerland at the level of AAA, with a “stable” forecast.

According to the representative of Swiss National Bank Mr. Jordan, Switzerland went through the crisis easier than other countries largely, due to its monetary policy and if the country will return to deflation, the CNB knows how to fight it off. Jordan is concerned, however about recent dynamics of the EUR/CHF, saying that risks will increase when Italy joins the list of the EU problematic countries. Authorities believe that Swiss National Bank is solely responsible for the course of monetary policy and in the nearest future it is likely to adopt new, effective measures to achieve price stability.

 

[LF.Anastasia]

JPY: Japanese Yen continues to remain near the highs of March

At the Forex currency market the Japanese Yen rate continues to grow on Thursday after a slight rebound yesterday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shaping a sell signal; volumes are high. Stochastic Oscillator goes down in the neutral zone, giving a sell signal and coming very close to the oversold zone.

Forex recommendations: in case of breakdown at the level of 77.60, the pair will go to 77.40 and 77.20.

Representative of the Bank of Japan Mr. Yosano said today that currency intervention is unlikely to take place before 2 August.In addition, statistics showed this morning that retail sales in Japan increased by 1.1% in June against reduction of 1.3% in May.On Tuesday morning, Finance Minister Mr. Noda stressed that authorities continue to closely monitor situation with the Yen and one should be prepared to its further growth. Last week Mr. Noda had already paid attention to the expensive Yen. He noted that the Yen is moving only in one direction lately. He believed that stabilization in Greece would encourage improvement of the general situation in the market.

Representative of the Bank of Japan Mr. Yamaguchi said that high rate of the JPY had no effect on the actual state of economy.Exports in Japan decreased by 1.6% y/y last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.Trade balance in Japan increased to the level of +Y70.7 billion in June against the forecast of -Y149.0 billion; therefore the balance exceeded limits of the two-month downfall of deficit. It is of interest that starting from this June the Bank of Japan is going to raise its estimate for economic growth in the country, as the growth in the production volumes has triggered revival of exports, and, at the same time, private demand is also growing.

At the last meeting, the Bank of Japan decided to leave interest rate unchanged in the target range of 0-0.1% per annum, as expected.Lending program was also left unchanged in the amount of 30 trillion yen.

According to the Bank estimates, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%.

 

[LF.Anastasia]

AUD: Large- scale correction has not started for Australian Dollar yet

At the Forex currency market on Thursday, the Australian Dollar rate remains close to the thirty-year highs, which it has reached yesterday.

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

Forex recommendations: in case of breakdown at the level of 1.1040, the pair will try to reach the highs at 1.1063 and further at 1.1075.

If upward breakdown does not take place, the pair will consolidate close o the current levels.Investors expect the data on the volume of lending in the private sector which is scheduled for the release on Friday.Favourable Australian statistics was released yesterday, such as: CPI in Australia increased by 0.9% q/q ((+3.6% y/y) in Q2 against the forecast of growth by 0.7% q/q

. This data turned out above expectations and supported growth in the pair AUD/USD. It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%Index of PPI in Australia increased by 0.8% on quarterly basis in Q2 against the growth of 1.2% in Q1.

As it was made public last week business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points. At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points).

According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain.Import price index in Australia rose by 0.8% in Q2 against the forecast of -1.1%. At the same time, export price increased by 6.0% in Q2 against the forecast of +4.5%. Growth in exports last quarter was attributed largely due to the rise in exports of lubricants, mineral oil and also related materials.