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[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.

 

[LF.Anastasia]

NZD: The Neollar Needs an Extra Catalyst for a Full-Blown Correction

The New Zealand Dollar rate continues to show an intention to move away from local lows at the Forex currency market on Wednesday. Still the currency buying volumes in spite of attractive levels are practically unapparent: the external background is gloomy and risk aversion prevails.
Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal; volumes are still noticeable. Stochastic Oscillator left the oversold zone and is rising in the neutral zone, forming a buy signal.
Forex recommendations: in case of breakup at the level of 0.7620, the pair will go to 0.7635 and 0.7650. One should note that aggressive sellers may easily return to the pair.
Macroeconomic situation in New Zealand remains practically unchanged. Investors are likely to take interest in September data that will probably show economy’s cooling amid still impressive external impact.
It became known before 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. ANZ Commodities prices in New Zealand totaled -1,3% m/m in September against -1,2% m/m. It is obvious that export-oriented economy is seriously affected by the external background showing a global slump in demand. This can be proved by observers’ reaction: according to the information released last 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 slumping in a downward channel. 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.
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 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.

 

[LF.Anastasia]

AUD: The Australian Dollar's Selling Remains Intact

At the Forex currency market the Australian Dollar rate looks downward on Wednesday – the pair AUD/USD moved towards new lows the day before, then showed some correctional movement on rather stable external background. Today the Aussie’s selling continues.
Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area and is giving a sell signal; volumes are high. Stochastic Oscillator left the oversold zone and is rising slightly, giving a weak buy signal.
Forex recommendations: out of the market.
Feasible Forex scenario: in case of breakdown at the level of 0.9530, the pair will go to 0.9510 and 0.9490. If the breakdown does not take place, the pair will consolidate at the current levels.
According to the data released in the middle of the week, Retail sales in Australia increased 0.6% m/m in August against the same increase a month before. The fact that retail sales still do not show weakness is positive and may be supportive to the Aussie in the near-term.
As it became known today, AIG Services index in Australia decreased by 1.8 points to the level of 50.3 points in September against the increase by 3.3 points seen in August. Most likely it is a consequence of an overall slump in demand. As it became known the day before, Private sector credit in Australia totaled +0.2% m/m in August against +0.3% m/m in July. This became another reason for the Aussie selloff. Leading indicators index Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) versus prior expectations of +2.7%. It became known earlier that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%.
Another RBA meeting took place today at which the Bank decided to keep its cash rate unchanged at the level of 4.75%. So the pause in monetary policy tightening lasts for 11 months. In its minutes RBA noted that monetary policy might be eased in future if demanded by the inflation component. It also added that much time might be needed to analyze current market turbulence.
Apparently the rate will remain unchanged until Q1 2012. Let us remind that earlier JP Morgan economists revised its opinion on the Australian rate – now they do not await its 25 bps rise in 2012, forecasting the rate to remain at the current levels till the end of the next year. In accompanying comments the economists note that financial markets are too volatile and the risks of economy’s cooling are too big to speak of the rate increase. A fall is commodities prices also plays against Australia.

 

[LF.Anastasia]

JPY: The Japanese Yen Remains Firm

At the Forex currency market the Japanese Yen rate continues strengthening on Wednesday – during the week currency’s movements may be polar, but in whole the upper trend is visible.
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 76.10, the pair will go to 76.00 and 75.90. If breakdown does not take place, the pair will consolidate at the current levels.
As noted by the Head of BoJ Masaaki Shirakawa this morning, the regulator is making some serious steps towards JPY weakening buying assets. Still the national currency doesn’t notice any serious movements and enjoys demand among traders that are hedging risks. Let us remind that as it became known the day before, Japanese politicians would take a set of measures to weaken the national currency in the long term. Presumably, the measures would include using JPY in M&A and in securing electric payments. It also became known that currency intervention fund would 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.
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%.
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.

 

[LF.Anastasia]

CHF: Situation with the Swiss Franc Stays Principally Unchanged

Swiss Franc rate stays in the mid-term range the Forex currency market on Wednesday morning – until the SNB changes its opinion one shouldn’t wait for any principal changes within the currency’s current state.
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, giving a buy signal.
Forex recommendations: in case of breakup at the level of 0.9250, the pair USD/CHF will go to 0.9260 and 0.9280. If breakup does not take place, the pair will stay near the current levels.
Macroeconomic situation in Switzerland remains unchanged.
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.
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.
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%.

 

[LF.Anastasia]

GBP: The British Pound's Correction didn't Last Long

At the Forex currency market the British Pound Sterling rate resumed moving downward on Wednesday – the correctional movement didn’t last long and was interrupted by spreading fear’s of world economy’s cooling.
Forex forecast: MACD indicator for the pair GBP/USD shows some growth in the negative area, giving a buy signal. Stochastic Oscillator continues falling in the neutral zone, giving a sell signal, ready to enter the oversold zone.
Forex recommendations: out of the market.
Feasible Forex scenario: in case of breakdown at the level of 1.5430, sellers’ target will be the levels of 1.5420 and 1.5410. If breakdown does not take place, the pair will consolidate close to the current levels.
As it became known today, BRC Retail prices index in Great Britain increased 0.2% m/m (+2.7% y/y) in September. According to the agency’s calculations, Food prices increased 0.1% m/m (+5.0% y/y) last month. 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.

 

[LF.Anastasia]

EUR/USD: Italian News Weakened Euro

The pair EUR/USD is traded downward at the Forex currency market on Wednesday morning – investors are waiting for today’s statistics and tomorrow’s ECB meeting.
By 9.05 MSK the Euro is at 1.3312 against yesterday’s closing level of 1.3348.
Euro continues to be pressured by a set of factors including an unsettled Greece issue, debt problems in Eurozone and other weak European countries and risk aversion until some real decisions are taken.
As it became known today’s morning, Moody's rating agency downgraded Italy to A2 from AA2, outlook “negative”. This delivered another blow to the European currency.
Data on Services PMI in September will be released during today’s trading session in a set of European countries, then Eurozone’s Retail sales in August will be published.
Most likely the pair EUR/USD will not go beyond the range of 1.3150-1.3360 at the trading session on Wednesday.

 

[LF.Anastasia]

EUR/USD: Euro waits for the ECB meeting outcome

The pair EUR/USD stands practically still at the Forex currency market on Thursday morning waiting for the ECB meeting outcome.

By 9.20 MSK the Euro is at 1.3333 against yesterday’s closing level of 1.3348.

The ECB meeting will take place today during which a decision on the ECB rate will be made and comments on the current situation in the region will be done. Most likely the rate will be kept unchanged, but the Bank may also inform of some extra stimulus for the economy of the region.

Probably the pair will stand practically still until the ECB meeting outcome is announced.

Most likely the pair EUR/USD will not go beyond the range of 1.3290-1.3380 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: the British Pound slides again

At the Forex currency market the British Pound Sterling rate is traded downward on Thursday – the external background still dictates direction to the British currency.

Forex forecast: MACD indicator for the pair GBP/USD shows some growth in the negative area, giving a buy signal. Stochastic Oscillator goes away from the oversold zone and is rising slightly, giving the same signal.

Forex recommendations: in case of breakdown at the level of 1.5430, sellers’ target will be the levels of 1.5420 and 1.5410. If breakdown does not take place, the pair will consolidate close to the current levels.

The Bank of England will hold a meeting today 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.

At the same time there are no talks of the rate changing (0.5%).

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.

As it became known today, BRC Retail prices index in Great Britain increased 0.2% m/m (+2.7% y/y) in September. According to the agency’s calculations, Food prices increased 0.1% m/m (+5.0% y/y) last month. 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.

 

[LF.Anastasia]

CHF: the Swiss Franc leads its way down

At the Forex currency market the Swiss Franc rate weakens on Thursday morning – the SNB leads the currency down slowly but surely in order to weaken its influence on the national economy.

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, giving a buy signal.

Forex recommendations: in case of breakup at the level of 0.9280, the pair USD/CHF will go to 0.9290 and 0.9310. If breakup does not take place, the pair will stay near the current levels.

The SNB looks like doing everything possible to weaken the national currency rate, as the latest data indicated the consequences of the expensive CHF. For example, 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.

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.

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.

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. The SNB noted separately 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%. Still pessimism and the SNB are synonyms.