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[LF.Anastasia]

NZD: the New Zealand Dollar finishes the week downward

The New Zealand Dollar rate finishes the week downward at the Forex currency market – in addition to the external background that leaves to chance for buyers rating agencies interfered in the currency trade.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal; volumes are rising. Stochastic Oscillator is falling in the neutral zone, giving the same signal.

Forex recommendations: in case of breakdown at the level of 0.7630, the pair will show a correctional movement to 0.7620 and 0.7600.

According to the information released at the end of the week, Fitch Ratings downgraded New Zealand to АА from АА+, outlook “stable”.

Market’s reaction to the news was immediate: the NZD found itself in a selloff.

According to Fitch economists, current account deficit in 2012 in New Zealand will only widen to 4,9%, in 2013 – to 5,5%. At the same time external debt level exceeds the upper limit for the country’s current rating. These points played the main role in rating downgrade.

As noted by the Finance Ministry of the country, rating agencies pay too much attention to the debt problems, and the uncertainty about the same actions to be taken by other rating agencies preserves.

The RBNZ head said the day before that the financing of the country’s banking sector might become a problem in 2012. According to Mr. Bollard, the New Zealand banking system now feels a great deal better than in 2008, but risks from Europe and USA are increasing. Still the NZD is too expensive, in his opinion.

The statistics released before turned out to be mixed. Consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

It became known last week that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1.

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

 

[LF.Anastasia]

JPY: The Japanese Yen Enjoys Demand Again

At the Forex currency market the Japanese Yen rate is resumed strengthening at the beginning of the week – apparently being influenced by the investors that look for some shelter in defensive currency.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, but starts rising ready to form a buy signal. Stochastic Oscillator starts moving downward in the neutral zone giving a weak sell signal.
Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to 76.50 and 76.30. If breakdown does not take place, the pair will consolidate at the current levels.
Thus, two day’s correction gave place to another growth round.
Tankan survey released this morning showed that big manufacturing diffusion index totaled +2 points against the forecast of +3 points, big non-manufacturing diffusion index amounted to -11 points against the forecast of -14 points and -21 points seen previously.
A solid set of macroeconomic data was released at the end of the previous week: overall nationwide CPI totaled +0.2% y/y in August against the forecast of +0.1% y/y, Household spending totaled -4.1% y/y in August against the forecast of -2.8% y/y. Besides it became known that Unemployment Rate decreased to 4.3% in August against both the forecast and previous level of 4.7%.
It also became known that currency intervention fund will be increased by JPY15 k, and the Finance Ministry noted that it would continue to monitor all possible speculative movements at the Forex currency market and couldn’t exclude actions to be taken.
Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q.
As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments.
Still the JPY growth is determined by speculative capital.

 

[LF.Anastasia]

CHF: The Swiss Franc is Ready to Renew the Local Lows

Swiss Franc rate is weakening the Forex currency market on Monday morning: apparently SNB is quite strong in its positions amid speculators’ pressure increasing on the desire to outstay hard times in previously safe-heaven currency.
Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is moving upward in the neutral zone forming a buy signal.
Forex recommendations: in case of breakup at the level of 0.9115, the pair USD/CHF will go to 0.9130 and 0.9150. If breakup does not take place, the pair will possibly stay near the current levels.
By today’s morning macroeconomic situation on Switzerland stays practically unchanged.
According to SNB representative Mr. Dallas, that spoke the day before, Swiss Franc’s reserves should be grown to prevent CHF from excessive strengthening, and SNB used all measures to protect the target level of the currency. He also added, that if no actions were to be taken, the Swiss Franc would grow to above the parity in pairing with Euro. Mr. Dallas didn’t comment on the possible rise of the target level. Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.
Index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious. The data released also 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. Statistics which was made public before this decision showed that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.
Released before SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.
It is worth noting that last week SNB made some signs that may indicate that the regulator looses power to keep the Swiss Franc stable.

 

[LF.Anastasia]

CHF: The Swiss Franc is Ready to Renew the Local Lows

Swiss Franc rate is weakening the Forex currency market on Monday morning: apparently SNB is quite strong in its positions amid speculators’ pressure increasing on the desire to outstay hard times in previously safe-heaven currency.
Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is moving upward in the neutral zone forming a buy signal.
Forex recommendations: in case of breakup at the level of 0.9115, the pair USD/CHF will go to 0.9130 and 0.9150. If breakup does not take place, the pair will possibly stay near the current levels.
By today’s morning macroeconomic situation on Switzerland stays practically unchanged.
According to SNB representative Mr. Dallas, that spoke the day before, Swiss Franc’s reserves should be grown to prevent CHF from excessive strengthening, and SNB used all measures to protect the target level of the currency. He also added, that if no actions were to be taken, the Swiss Franc would grow to above the parity in pairing with Euro. Mr. Dallas didn’t comment on the possible rise of the target level. Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.
Index of expectations ZEW in Switzerland fell to -75.1 points in September against the level of -71.4 points in August. Influence of the expensive Franc is obvious. The data released also 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. Statistics which was made public before this decision showed that trade balance in Switzerland amounted to +0.81 billion in August against the forecast of +1.97 billion: influence of the expensive currency and external background is obvious. Volume of industrial production in Switzerland grew by 2.3% y/y in Q2 against the forecast of +2.7% y/y.
Released before SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.
It is worth noting that last week SNB made some signs that may indicate that the regulator looses power to keep the Swiss Franc stable.

 

[LF.Anastasia]

GBP: The British Pound Starts the Week with a Selloff

At the Forex currency market the British Pound Sterling rate continues moving downward on Monday amid weak external background and statistics.
Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, but is moving along the signal line, not giving any signal. Stochastic Oscillator is falling in the neutral zone, giving a sell signal.
Forex recommendations: in case of breakdown at the level of 1.5520, sellers’ target will be the levels of 1.5510 and 1.5480. If breakdown does not take place, the pair will consolidate close to the current levels.
The data released today morning added another trait to the British housing sector picture: Hometrack House prices index in Great Britain declined by 0.1% m/m (-3.5% y/y) in September.
According to the data released earlier, Nationwide house price index in Great Britain increased by 0.1% m/m (-0.3% y/y) in September. The statistics released earlier showed that house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects.
As it became known the day before, Gfk Consumer Sentiment in Great Britain increased to the level of -30 points in September against the level of -31 points in August. However in spite of some positive dynamics, index is still near its historic lows and doesn’t drag to historical average. The indicator has moved away from its lows this year, but strong stabilization is still a long way off. It is worth noting that the indicator of the economic situation fell to -58 points for the last 12 months.
According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before.
As noted by the regulator the day before, banks shouln’t reinforce market volatility. Besides banks’ capital saving shouldn’t limit lending.
At the beginning of the week Mr. Osborne of Great Britain said that British politicians should work actively to stimulate growth. Taking into consideration reserved English national character, one should stimulate mainly confidence – the rest will be done by the economy itself.

 

[LF.Anastasia]

EUR/USD: Euro doesn't Believe in Greece

The pair EUR/USD is traded downward at the Forex currency market on Monday morning – in spite of positive news from Greece.
By 9.30 MSK the Euro is at 1.3333 against Friday’s closing level of 1.3387.
Last weekend Greece Cabinet of Ministers approved the project of 2012 budget that stipulates 6.8% GDP deficit – higher than the level promised to the creditors (6.5% GDP).
Besides, Greece Finance Minister promised that the Athens would get a 6th money tranche because the country did its best to obtain it.
Still the market is not inclined to trust to words until it sees real actions.
The PMI data in a set of European countries will be released today, evening traders will monitor statistics from the USA.
Most likely the pair EUR/USD will not go beyond the range of 1.3290-1.3390 at the trading session on Monday.

 

[LF.Anastasia]

JPY: The Japanese Yen Growth Continues on Tuesday

At the Forex currency market the Japanese Yen rate continues strengthening much because of growing demand from the investors that look for some shelter in defensive currency.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is moving along the signal line, not giving any clear signal. Stochastic Oscillator is moving downward in the neutral zone giving a sell signal.
Forex recommendations: in case of breakdown at the level of 76.50, the pair will go to 76.40 and 76.30. If breakdown does not take place, the pair will consolidate at the current levels.
In tote macroeconomic background in Japan remains unchanged. Markets are waiting for BoJ interventions that still do not take place.
Tankan survey released this morning showed that big manufacturing diffusion index totaled +2 points against the forecast of +3 points, big non-manufacturing diffusion index amounted to -11 points against the forecast of -14 points and -21 points seen previously.
Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q.
As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments. It also became known that currency intervention fund will be increased by JPY15 k, and the Finance Ministry noted that it would continue to monitor all possible speculative movements at the Forex currency market and couldn’t exclude actions to be taken.
A solid set of macroeconomic data was released at the end of the previous week: overall nationwide CPI totaled +0.2% y/y in August against the forecast of +0.1% y/y, Household spending totaled -4.1% y/y in August against the forecast of -2.8% y/y. Besides it became known that Unemployment Rate decreased to 4.3% in August against both the forecast and previous level of 4.7%.

 

[LF.Anastasia]

CHF: The Swiss Franc Moves Lower

Swiss Franc rate is traded slightly upward the Forex currency market on Tuesday morning after a serious weakening the day before. Still significant changes do not occur within the pair – trade is controlled by the SNB.
Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator entered the overbought zone forming a buy signal.
Forex recommendations: in case of breakup at the level of 0.9195, the pair USD/CHF will go to 0.9210 and 0.9230. If breakup does not take place, the pair will possibly stay near the current levels.
As it became known the day before, PMI SVME in Switzerland decreased to 48.2 points in September against 51.7 points seen in August. Besides, retail sales decreased by 1.9% y/y in August against +1.9% y/y a month earlier. These negative statistics is another proof of the expensive Swiss Franc’s influence on the national economy.
Released before SNB quarter report turned out to be pessimistic – according to the bank the economy will not show any signs of growth in 2H 2011 mostly because of expensive national currency and a sharp fall in demand. According to Swiss National Bank, GDP will amount to 1.5-2% in 2011, besides the first half of the year will bring the main growth. In addition, the SNB also noted that without firm actions the economy could enter a recession. CPI will be at the level of +0.4% in 2011, next year – at +0.5%. Position of SNB remains firm: any attempt of the Franc to be corrected or act as a safe asset is suppressed from the very beginning. Testing of this opinion earlier has proved once again that this intention is firm.
It is worth noting that last week SNB made some signs that may indicate that the regulator looses power to keep the Swiss Franc stable. Besides there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Meanwhile, no grounds have been found to confirm this rumor.
According to SNB representative Mr. Dallas, that spoke the day before, Swiss Franc’s reserves should be grown to prevent CHF from excessive strengthening, and SNB used all measures to protect the target level of the currency. He also added, that if no actions were to be taken, the Swiss Franc would grow to above the parity in pairing with Euro. Mr. Dallas didn’t comment on the possible rise of the target level.

 

[LF.Anastasia]

GBP: Today's British Pound Increase is a Correctional Movement

At the Forex currency market the British Pound Sterling rate trades slightly upward on Monday, but this growth can only be attributed to the correctional movement.
Forex forecast: MACD indicator for the pair GBP/USD continues to go down in the negative area, but started moving along the signal line, not giving any signal. Stochastic Oscillator is falling in the neutral zone, giving a sell signal.
Forex recommendations: in case of breakdown at the level of 1.5450, sellers’ target will be the levels of 1.5430 and 1.5410. If breakdown does not take place, the pair will consolidate close to the current levels. As a technical correction movement the pair may go to 1.5520.
The Bank of England will hold a meeting this week during which some signs of the QE-program enlarging may be given. Earlier several politicians didn’t exclude such possibility. British economy in its current state may gain serious support from the step.
As it became known earlier, Gfk Consumer Sentiment in Great Britain increased to the level of -30 points in September against the level of -31 points in August. However in spite of some positive dynamics, index is still near its historic lows and doesn’t drag to historical average. The indicator has moved away from its lows this year, but strong stabilization is still a long way off. It is worth noting that the indicator of the economic situation fell to -58 points for the last 12 months.
According to the statistics mortgages are reviving in Great Britain: BBA Mortgage Approvals reached 35,226 k in August against the forecast of 33,250 k. The indicator jumped to 2010 highs. One should note that refinancing approvals totaled 27,114 k against 26,229 k before. The data released the day before added another trait to the British housing sector picture: Hometrack House prices index in Great Britain declined by 0.1% m/m (-3.5% y/y) in September. The statistics released earlier showed that Nationwide house price index in Great Britain increased by 0.1% m/m (-0.3% y/y) in September. The previously released data indicated that house prices Rightmove increased by 0.7% m/m in September. The data on the real estate sector from other leading agencies will be known soon, which will provide a clearer outlook. Meanwhile, we can see the lack of offers as it emphasized by Rithmove and upward pressure from the very low interest rates, which encourage the growth of the house prices; plus to this low level of public confidence to economy and reluctance of people to spend money, caused by obscure economic prospects.
At the beginning of the week Mr. Osborne of Great Britain said that British politicians should work actively to stimulate growth. Taking into consideration reserved English national character, one should stimulate mainly confidence – the rest will be done by the economy itself. Today the British Prime-minister noted that the main objective at the present moment was to take the amount of debt under control.

 

[LF.Anastasia]

EUR/USD: Greece Issue doesn't Allow Euro to Resume Growth

The pair EUR/USD is traded slightly upward at the Forex currency market on Tuesday morning after a selloff the day before.
By 9.10 MSK the Euro is at 1.3195 against yesterday’s closing level of 1.3176.
Investors’ fears of debt problems’ escalation still put pressure on Euro – in order to remove the default risk the Athens need to undertake all liabilities so that Europe could continue providing help to the country.
According to Jean-Claude Juncker, Head of the Eurogroup, one should wait till representatives of IMF, ECB and EU present a report on the state of the Greece economy in order to understand the extent to what the Athens cope with liabilities.
As noted by the politician the day before, the decision on 6th money tranche will be put off till October, 13.
Thereby, Greece issue remains open-ended and puts significant pressure on the currency market.
Tonight markets will monitor Ben Bernanke’s speech to find out his opinion on the state of the USA economy.
Most likely the pair EUR/USD will not go beyond the range of 1.3150-1.3250 at the trading session on Tuesday.