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[LF.Anastasia]

NZD: New Zealand Dollar is still on sale

At the Forex currency market the New Zealand Dollar rate continues to be in the focus of sellers on Tuesday morning; external background is not improving and investors try to get rid of positions that pose a risk.

Forex forecast: MACD indicator for the pair NZD/USD has merged with the signal line and is not giving a clear signal. Stochastic Oscillator has reached oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8290, the pair will go to 0.8270 and 0.8250. The New Zealand Dollar continues to be guided by the external background which remains tense.

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. 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. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it was decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country. As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”

It became known earlier, that number of permits to construct in New Zealand increased by 13.0% in July against the fall of 1.3% in June. It is too early to speak about tendency in the indicator; nevertheless current results are quite good.

As it was made public earlier, retail sales in New Zealand increased by 0.9% q/q in Q2 against the forecast of growth by 0.7% on quarterly basis. According to the details given in the report the growth is attributed to the sale of motor spare parts, electrical goods and medicine.

 

[LF.Anastasia]

EUR/USD: Growth of the Euro is attributed to technical correction

The pair EUR/USD is traded upward at the Forex currency market on Wednesday, which is attributed to the rebound after six days of sharp fall.

By 9.20 MSK the Euro is at 1.4064 against yesterday’s closing level of 1.3997.

Reaction of the major pair was unpredictable on Tuesday: as soon as Swiss national Bank had recorded the lowest rate of the Euro in pairing with Franc at the level of 1.20, the EUR/USD started to grow following the EUR/CHF; however the momentum was not sufficient and in the end of the day the Euro reached 1.40 for the first time since this summer.

It became known yesterday that GDP of the Eurozone was left unrevised on quarterly basis, +0.2%. Market ignored this data.

Today’s German statistics can support the Euro in the event of positive indexes.

Most likely the pair EUR/USD will not go beyond the range of 1.3970-1,4130 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: Sales of British Pound is being corrected after significant sales

At the Forex currency market the British Pound Sterling is traded upward on Wednesday morning as part of technical rebound.

Forex forecast: MACD indicator for the pair GBP/USD has merged with the signal line, tending to break it through from top to bottom and is giving a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5990, the target for sale will become the levels of 1.5970 and 1.5950.

According to the data released in the morning, retail price index BRC in the UK rose by 0.1% m/m (+2.7% y/y) n August against the fall of 0.2% m/m a month earlier. However, annual gain amounted to 2.8% in July; obviously the CR continues to decrease. Expensive raw material puts pressure on consumer inflation, which is reflected in the indicator. According to Nielsen estimates about 40% of purchases were the goods involved in various promotions, which proves that the British do not want to spend money.

It became known yesterday that retail sales BRC in the UK fell by 0.6% y/y in August. Low level of consumption in Great Britain, along with the low consumer confidence and poor state of the real estate market has become the main reasons of the decline in the index. Demand is obvious only for food, while demand for clothes and household goods goes down sharply,- reported British Retail Consortium.

According to the data released today consumer confidence index GFK/NOP in the UK fell to -31 points in August against the level of -30 points in July. This index, which is one of the most objective assessment of consumer confidence in the UK, is now below the lows of 1970, the time of recession in the country Note: that this index indicates consumers’ economic expectations for the next 12 months.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

It became known earlier that PMI CIPS in the manufacturing sector of the UK was at the level of 49.0 points in August against the forecast of decline to 48.6 points and the level of 49.1 points in July.

Low interest in risk is unfavorable factor for the Pound; traders are not in a hurry to make purchases because of the obscure external prospects. It is obvious now that the GBP cannot expect support from anywhere until significant improvements will take place in the external background. Although technical rebound can become an exceptional option, however after that the pair will be on sale again.

A meeting of the Bank of England will be held tomorrow and it will be interesting to know regulator’s comments.

 

[LF.Anastasia]

CHF: Swiss Franc tests its capabilities after sharp fall

At the Forex currency market Swiss Franc rate tests new boundaries of the trading corridor on Wednesday morning: after a sharp fall yesterday, guidelines of the market have mixed up.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and came into the positive area, maintaining a weak buy signal. Stochastic Oscillator goes up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8570, the pair USD/CHF will go to 0.8590 and 0.8610. If upward breakdown does not take place, the pair will consolidate at the current levels.

Something that market has never expected took place yesterday: Swiss National Bank fixed exchange rate of the Euro in pairing with Franc at the minimum permissible level of 1.20, causing a rally in the market. SNB noted in the comments that it is going to buy foreign currency in unlimited quantities to prevent growth of the Franc, as the CHF adversely affects economy of Switzerland.

Statistics which was made public before this decision showed that Switzerland slides down to deflation: CPI in August fell by 0.3% m/m against the forecast of decline by 0.2% m/m.

Therefore, now the SNB will carefully monitor the situation at the currency market and carry out interventions without warning.

Last week, agency Reuters announced that according to the information from some sources Swiss authorities are going to adopt a new program to support economy which will become the second one. Program can include measures to support innovations and also a package of measures to support infrastructure sector. It is expected that the package will be presented at the winter session of the Parliament. Meanwhile, the program will be targeted not to the external factors but to neutralize the impact of the expensive Franc.

According to the data released earlier, unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.

It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June. In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points. Statistics released earlier showed that consumption indicator UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy.

 

[LF.Anastasia]

JPY: Japanese Yen strengthens again in the middle of the week

At the Forex currency market the Japanese Yen rate reverted to growth on Wednesday after yesterday’s rebound.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and goes up, giving a buy signal. Stochastic Oscillator continues to go up slightly in the neutral zone, and can shift to sideways; meanwhile it is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 77.20, the pair will go to к 77.00 and 76.50. If downward breakdown does not take place, the pair will aim to 77.40.

At the meeting today, the Bank of Japan decided to leave interest rate unchanged at 0.1% per annum. Changes in the monetary policy are not planned: program of buying assets and lending program will remain unchanged along with the exchange rate.

In the follow-up comments the Central Bank noted that situation in Europe requires thorough attention and Japanese economy maintains the tendency to recover.

According to previous estimates of the Bank of Japan, 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%. Real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the Country of the Rising Sun said that next quarter Japan will demonstrate the rise of economy.

As it became known earlier number of begun housing construction in Japan rose by 21.2% in July against the growth of 5.8% in June. In addition, preliminary volume of industrial output in Japan increased by 0.6% m/m in July against the growth of 3.8% a month earlier. The data was weak, which was to the advantage of the growing Yen, which normally moves in the direction opposite to the markets’ sentiment.

The fight against expensive JPY is one of the three objectives of a new Cabinet. It is possible that in the coming weeks, the new government will present a plan to stabilize the JPY.

 

[LF.Anastasia]

AUD: Statistics supported Australian Dollar

At the Forex currency market the Australian Dollar rate is traded upward on Wednesday morning: currency received support from the domestic statistics.

Forex forecast: MACD indicator for the pair AUD/USD has merged with the signal line and is not giving a signal. Stochastic Oscillator has pushed away of the oversold zone; however has not shaped a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0600, the pair will go to 1.0620 and 1.0650. If upward breakdown does not take place, the pair will consolidate at the current levels.

Statistics released today showed that GDP in Australia rose by 1.2% q/q (+1.4% y/y) in Q2 against the forecast of growth by 1.0% on quarterly basis. The data was above expectations; however uncertainty in the external economy is very high, which prevents growth in the exchange rate.

According to the governor of the RBA Mr. Glen Stevens, as long as markets are panic-stricken it is better to keep rates steady.

held yesterday, the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.75% per annum, as expected. In the follow-up comments the head of the RBA Glen Stevens noted that “medium term economic prospects look worse that it had been expected a few months earlier. Global financial markets demonstrated severe instability”. The situation with the rate seems logical amid such background. “The RBA Committee decided that the most viable option will be to maintain current course of the monetary policy. At the next meeting the RBA will continue to carefully analyze both the prospects for economic growth and inflation in Australia, –said Stevens.

The pause in the policy of monetary tightening, maintained by the RBA, has been going on for 9 months already.

Statistics released on Tuesday showed that mortgage lending in Australia increased by 1.0% m/m in July against the growth of 0.6% m/m in June. In addition, current account balance in Australia amounted to -A$7.4 billion in Q2 against the level of -A$11.1 billion in Q1.

Leading indicators index Westpac in Australia increased by 0.2% m/m (+1.6% y/y) in June against the growth of 3.0% y/y in May. However, the rate of decline in the index is minimal, considering that the index has been steadily decreasing since 2010. This index indicates prospects for economic activity for the next 3-9 months and judging by its dynamics, rapid growth can be hardly expected.

 

[LF.Anastasia]

NZD: New Zealand Dollar is being corrected on Wednesday

The New Zealand Dollar rate is being corrected on Wednesday morning, following the trend of the major pair; there is a lull in the market that followed after the sharp surge of negative factors.

Forex forecast: MACD indicator for the pair NZD/USD has merged with the signal line and is not giving a clear signal. Stochastic Oscillator has reached oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8250, the pair will go to 0.8240 and 0.8200. The pair can also go to 0.8300, as part of technical correction.

New statistic is not going to be published so far; nevertheless the NZD has external ground for the trend, the currency continues to respond actively to the situation on the financial platforms, as illustrated by its dynamics.

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. 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.

This was another positive feature in the outline of New Zealand economy. It is worth noting that number of permits to construct in New Zealand increased by 13.0% in July against the fall of 1.3% in June. It is too early to speak about tendency in the indicator; nevertheless current results are quite good.

Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it was decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country. As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”

As it was made public earlier, retail sales in New Zealand increased by 0.9% q/q in Q2 against the forecast of growth by 0.7% on quarterly basis. According to the details given in the report the growth is attributed to the sale of motor spare parts, electrical goods and medicine.

 

[LF.Anastasia]

EUR/USD: Euro falls in price under pressure from USD

The pair EUR/USD is traded downward again at the Forex currency market on Thursday morning, as investors are waiting for the speech of Barack Obama in the Congress tonight.

By 9.30 MSK the Euro is at 1.4067 against yesterday’s closing level of 1.4098.

It is expected that American leader will touch upon the issue of labour market in the U.S. in his speech on Thursday and will propose for consideration a new incentive program of this sector.

In addition, a meeting of the European Central Bank will be held today; traders expect to see some relaxation in the opinion of regulator about inflation in the region.

Therefore, the day is going to be eventful.

Most likely the pair EUR/USD will not go beyond the range of 1.3960-1.4090 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound declines again

At the Forex currency market the British Pound Sterling declines again on Thursday after of technical rebound.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from top to bottom and goes down in the negative zone, giving a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5930, the target for sale will become the levels of 1.5910 and 1.5880.

A meeting of the Bank of England will be held today, where the rate is most likely will be left unchanged.

It is interesting that a hawk has showed up again in the horizon of the British financial field; Andrew Sentence, ex-member of MPC said in his interview with “The Times” that he continues to adhere to the view that the rise of the interest rate by 50 basis points is necessary for the country. He also finds arguable expectations of the Bank of England that inflation will move away from the level of 4.50% in the near future.

As the data released yesterday showed index of retail prices BRC in Great Britain increased by 0.1% m/m (+2.7% y/y) in August against the fall of 0.2% m/m a month earlier. However, annual gain amounted to 2.8% in July; obviously the CR continues to decrease. Expensive raw material puts pressure on consumer inflation, which is reflected in the indicator. According to Nielsen estimates about 40% of purchases were the goods involved in various promotions, which proves that the British do not want to spend money.

It also became known this week that retail sales BRC in the UK fell by 0.6% y/y in August. Low level of consumption in Great Britain, along with the low consumer confidence and poor state of the real estate market has become the main reasons of the decline in the index. Demand is obvious only for food, while demand for clothes and household goods goes down sharply,- reported British Retail Consortium.

According to the data released today consumer confidence index GFK/NOP in the UK fell to -31 points in August against the level of -30 points in July. This index, which is one of the most objective assessment of consumer confidence in the UK, is now below the lows of 1970, the time of recession in the country Note: that this index indicates consumers’ economic expectations for the next 12 months.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

 

[LF.Anastasia]

CHF: Swiss Franc continues to weaken

At the Forex currency market Swiss Franc rate will continue to be in the disadvantageous position for long and will weaken.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and came into the positive area, maintaining a buy signal. Stochastic Oscillator has reached overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8600, the pair USD/CHF will go to 0.8620 and 0.8645. If upward breakdown does not take place, the pair will consolidate at the current levels.

The data released this morning showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July. It is good that “long arms” of the Franc has not reached this important sector.

We would remind that something that market has never expected took place the day before yesterday: Swiss National Bank fixed exchange rate of the Euro in pairing with Franc at the minimum permissible level of 1.20, causing a rally in the market. SNB noted in the comments that it is going to buy foreign currency in unlimited quantities to prevent growth of the Franc, as the CHF adversely affects economy of Switzerland.

Statistics which was made public before this decision showed that Switzerland slides down to deflation: CPI in August fell by 0.3% m/m against the forecast of decline by 0.2% m/m.

Therefore, now the SNB will carefully monitor the situation at the currency market and carry out interventions without warning.

It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June. In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points. Statistics released earlier showed that consumption indicator UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy.

According to the data released earlier, unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.