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[LF.Anastasia]

GBP: Growth of the British Pound will be continued

At the Forex currency market the British Pound Sterling rate is growing steadily on Monday morning taking advantage of a lull at the market in order to regain some of the previous losses.

Forex forecast: MACD indicator for the pair GBP/USD started to grow moderately in the negative area, shaping a sell signal. Stochastic Oscillator continues to grow in the neutral zone, giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5615, target for the purchase will be the levels of 1.54620 и 1.5635.

On Monday morning macro-economic background for Great Britain is quiet; traders are guided by European news.

It became known earlier that retail price index BRC in the UK increased by 0.2% m/m (+2.7% y/y) in September. According to the estimates of the agency prices for food amounted to +0.1% m/m (+5.0% y/y) last month. As it became known earlier consumer confidence index Gfk in the UK rose to -30 points in September against -31 points in August. However, despite positive dynamics, index is still close to the historic lows and has not yet reached historical average. The indicator has moved away from the bottom; however it is still too far from stability. Note that assessment indicator of general economic situation fell to -58 points over the last 12 months.

At the meeting of the Bank of England last week it was decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time increasing volume of the assets repurchase program. QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the assets repurchase program was provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future.

According to him current measures are preventative because Britain is in the middle of the serious crisis at the moment. The Pound had become much weaker in response to the actions of the bank of England and has been trying now to regain some losses yesterday and today

Meanwhile, real estate sector is waking up from hibernation: house price index Hometrack in the UK declined by 0.1% m/m (-3.5% y/y) in September. Previous data showed that house price Rightmove in the UK increased by 0.7% m/m in September. Meanwhile, we can see the lack of offers as it is 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]

CHF: Swiss Franc is growing moderately today

Swiss Franc rate is growing moderately at the Forex currency market on Monday morning within the narrow range, amid quiet external environment.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it started to go down and is ready to shape a sell signal. Stochastic Oscillator goes down in the neutral zone, moving away from the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9210, the pair USD/CHF will go to 0.9200 и 0.9190. If downward breakdown does not take place, the pair will be close to the current levels.

The economic situation in Switzerland has not changed considerably this morning.

Currently the Franc is in the narrow range, maintained by the Bank. Note that SNB gave indications in September that could have been interpreted as follows: regulator’s power to maintain the Franc is fading away. We would remind that 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.

It became known earlier that unemployment rate in Switzerland remained at the level of 2.8% in September as expected. Employment sector is stable so far; however repercussion of the expensive national currency is possible. Index of PMI SVME fell to 48.2 points in September against the level of 51.7 points in August. In addition retail sales in Switzerland fell by 1.9% y/y in August against +1.9% y/y a month earlier.

According to Mr Jordan, a representative of the SNB, it is necessary to increase the reserves of the SNB in order to prevent the growth of the Franc. SNB will take all measures to protect the target level of SNB. According to him, if you just sit back, CHF will rise above the parity level in pairing with the Euro. At the same time the monetary politician did not comment on the probability of increasing the target level.

As per the annual report of SNB, in the next 6 month economy of the country will come to a standstill due to the impact of the expensive Franc and sharp decline in foreign demand. Thus, GDP in Switzerland will amount to 1.5%-2.0% this year and main growth will attribute to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

 

[LF.Anastasia]

JPY: Japanese Yen has reduced its activity today

At the Forex currency market the Japanese Yen rate has reduced its activity at the beginning of the week. Probably it is positive external background and rebound in the world financial institutions that caused the decrease in interest to the safe currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going up, giving a buy signal. Stochastic Oscillator goes 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 76.60, the pair will go to 76.30 and 76.10. If downward breakdown does not take place, the pair will consolidate at the current levels.

Markets of Japan are closed today due to celebration of the Sport and Health Day.

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. The data released at the end of the last week included the following information about inflation: base national CPI amounted to +0.2% y/y in August. In addition, it also became known that unemployment fell to 4.3% in August against the forecast of 4.7% and previous level of 4.7%.

Business survey Tankan published this week showed that expectations of the large industrial enterprises amounted to +2 points in September against the forecast of +3 points. Expectations of large non-industrial enterprises demonstrated decline of 11 points versus the forecast of -14 points and -21 points previously. At a two-day meeting of the Bank of Japan last week interest rate was left at the level of 0.10% per annum, as expected. Regulator said in the comments that he is going to continue lending program until 30 April 2012. The Bank has refrained additional stimulation of the economy deciding to wait for the more complete results. Volume of assets purchase was maintained at 50 trillion yen.

From the fundamental point of view Japanese economy is stable as far as it is possible after the disaster in March. However, the impact of the expensive Yen can provoke resumption of talk about mitigation of fiscal conditions.

 

[LF.Anastasia]

AUD: Growth of Australian Dollar has been going on for the fifth consecutive session

At the Forex currency market the Australian Dollar rate continues to grow on Monday; the AUD has been strengthening for the fifth consecutive session without correction, indicating that traders are full of determination.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator continues to go up in the neutral zone, giving a buy signal and approaching overbought zone.

Forex recommendations: in case of breakdown at the level of 0.9835, the pair will go to 0.9850 and 0.9860. If upward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background in Australia remains unchanged. According to statistics released earlier business activity index in the manufacturing sector of Australia fell to 42.3 points in September against the previous level of 43.3 points. Most likely it has been the impact of the general recession in demand. According to the data released in the middle of the week, retail sales in Australia grew by 0.6% m/m in August versus similar growth a month earlier.

As it became known earlier composite activity index in the construction sector AIG in Austraial fell by 2.1 points, up to 30.0 points in September. Consumer lending in Australia amounted to +0.2% in August against the level of +0.3% m/m in July. It has become another reason for selling the AUD. Index of leading indicators Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) against preliminary expectations of +2.7%. As it became known earlier consumer inflation expectations in Australia increased to 2.8% in September, as per Institute of Melbourne against provisional estimate of 2.7%.

At the regular meeting last week the Reserve Bank of Australia decided to leave interest rate unchanged at the level of 4.75% per annum. Thus, the pause in the process of monetary tightening policy of the RBA has been lasting for 11 months. In the follow-up comments the regulator said that monetary policy can mitigate in the future if inflation requires it.

In the follow-up statement it is noted that more time can be required to analyze the impact of turbulence in the markets. Apparently, the rate of the RBA is unlikely to be raised until the first quarter of 2012. Comments stressed that financial markets are too volatile and risks of slowdown in the world economy is too high to think about the rise in the rates. Decline in the prices for raw materials is also a negative factor for Australia.

Recall that JP Morgan revised its view on the interest rate of Australia- economists do not expect the growth of rate by 25 basis points in 2012, predicting that the interest rate will remain at the current level until the end of the next year.

Meanwhile the Australian Dollar is taking advantage of the lull at the market to regain partly its previous losses.

 

[LF.Anastasia]

CAD: Canadian Dollar started this week with strengthening

The Canadian Dollar rate is traded upward at the Forex currency market at the beginning of the week using oil prices and stable external background as a support.

Forex forecast: MACD indicator is in the positive area for the pair USD/CAD and goes up steadily, while volumes are above average. Stochastic Oscillator went down to the oversold zone, and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0320, the pair will go 1.0305 and 1.0280. If downward breakdown does not take place, the pair will remain at the current levels.

Meanwhile, judging by the frame of traders’ mind the Canadian Dollar has growth potential. It became known last week that unemployment rate in the country decreased by 60.9 thousand. At the same time employment rate in the country increased by 60.9 thousand. For the Canadian economy that is closely linked with the economy of the USA it is a significant step forward which has supported the CAD so far.

The data released earlier showed that unemployment rate in Canada increased to 7.3% in August against the forecast of 7.2% and previous level of 7.2%. In addition, In addition, labor productivity fell by 0.9% on quarterly basis in Q2 against the forecast of decline by 0.7% q/q. It also became known that number of begun construction in Canada fell to 184.7 thousand in August against the forecast at 200 thousand. It is clearly obvious at the moment, that slowdown in the key indicators was caused by the state of the global economy and proximity to the Unites States.

The Bank of Canada believes that GDP of the country will amount to about 2.8% in 2011 (reduction by 0.1% versus forecast of April); in 2012 it will be 2.6% and 2.1% in 2013. According to the evaluation of the Bank, exports performance in Canada is negative because low demand in the USA prevents the rise of the indicator and expensive CAD makes situation even more complicated. The growth in the interest rate in Canada will directly depend on stability in economic development. The head of the Bank of Canada Mr. Carney said earlier that there are several significant obstacles on the way of Canadian economic development. First of all it is the growth of the Canadian Dollar and secondly, it is European debt crisis, plus to this, drawn-out dialogue about the U.S. national debt also casts a dark shade on the Canadian economy. Central Bank will be able to waive further economic stimulation only when economic system will show steady self-sustained growth.

By the way, CPI in Canada rose by 0.3% m/m (+3.1% y/y) in August.

 

[LF.Anastasia]

EUR/USD: Euro is waiting for new signals to grow

The pair EUR/USD is traded slightly downward at the Forex currency market on Tuesday morning after the rapid growth earlier.

By 9.30 MSK the Euro is at 1.3640 against yesterday’s closing level of 1.3641.

Yesterday’s positive situation for the Euro was completely based on the expectations of traders that before the end of the month Germany and France will unveil crisis bailout plan for Europe. There is a lull in the market this morning; however it is possible that some growth will continue today.

Meanwhile, the date assigned by IMF for considering report on Greece, 13 October is approaching, which is a confusing factor for the market: on the one hand traders are in anticipation of the sixth tranche, on the other hand the risk of additional conditions is too high.

European statistics will be of interest today, tonight U.S. Federal Reserve will make public the minutes of the last meeting.

Most likely the pair EUR/USD will not go beyond the range of 1.3620-1.3680 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound started to slide down

At the Forex currency market correction started for the British Pound Sterling rate on Tuesday morning; after two days of steady growth investors begun to question its solid supports.

Forex forecast: MACD indicator for the pair GBP/USD started to grow moderately in the negative area, shaping a sell signal; however volumes are decreasing. Stochastic Oscillator continues to grow in the neutral zone, giving a similar signal.

Forex recommendations: in case of break down at the level of 1.5620, selling target will be the levels of 1.5600 и 1.5590.

It became known today that volume of retail sales BRC in the UK rose by 0.3% y/y in September. Thus, according to the survey of the British Consortium of Retailers volume of retail sales rose slightly on annual basis last month; however monthly dynamics is mixed. Prices for food continued to grow, demand for clothes and footwear fell despite the seasonality. Therefore, basic demand is minimal at the moment.

It became known earlier that retail price index BRC in the UK increased by 0.2% m/m (+2.7% y/y) in September. According to the agency’s estimate prices for food amounted to +0.1% m/m (+5.0% y/y) last month. As it became known earlier consumer confidence index Gfk in the UK rose to -30 points in September against -31 points in August. However, despite positive dynamics, index is still close to the historic lows and has not yet reached historic average. The indicator has moved away from the bottom, nevertheless it is still too far from stability. Note that assessment indicator of general economic situation fell to -58 points over the last 12 months.

Statistics released earlier showed that that house price Rightmove in the UK increased by 0.7% m/m in September. Meanwhile, we can note that there is lack of offers as emphasized by Rithmove and upward pressure caused by the very low interest rates, which encouraged the growth of the house prices; plus to this low level of public confidence in economy and reluctance of people to spend money, due to obscure economic prospects.

At the meeting last week the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time increasing volume of the assets repurchase program. Therefore, QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the assets repurchase program has been provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future.

 

[LF.Anastasia]

CHF: Swiss Franc broke through regulator’s defence

Swiss Franc rate continues to grow at the Forex currency market on Tuesday – Franc shot up more than by one figure.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it goes down and is shaping a sell signal. Stochastic Oscillator goes down in the neutral zone, moving and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9030, the pair USD/CHF will go to 0.9020 и 0.9000. If downward breakdown does not take place, the pair will remain close to the current levels.

As dealers noted, the pair USD/CHF slid down yesterday following the pair EUR/CHF, which had been actively sold by one of the Swiss Banks and British Clearing Bank.

It is worth noting that SNB gave indications in September that could have been interpreted as follows: regulator’s power to maintain the Franc is fading away. We would remind that according to the rumors that grew louder among investors in the market SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25.

As per the SNB annual report, in the next 6 month economy of the country will come to a standstill due to the impact of the expensive Franc and sharp decline in foreign demand. Thus, GDP in Switzerland will amount to 1.5%-2.0% this year and main growth will attribute to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

It became known earlier that unemployment rate in Switzerland remained at the level of 2.8% in September as expected. Employment sector is stable so far; however repercussion of the expensive national currency is possible. Index of PMI SVME fell to 48.2 points in September against the level of 51.7 points in August. In addition retail sales in Switzerland fell by 1.9% y/y in August against +1.9% y/y a month earlier.

 

[LF.Anastasia]

JPY: Japanese Yen continues to slowdown its daily movement

The Japanese Yen rate is getting weaker at the Forex currency market on Tuesday; dynamics of the last days shows decline in volatility in the pair.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going up, giving a buy signal. Stochastic Oscillator goes 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 76.60, the pair will go to 76.30 and 76.10. If downward breakdown does not take place, the pair will consolidate at the current levels.

Statistics this morning showed that total current account surplus in Japan amounted to Y407.5 billion in August against the forecast of Y462 billion. In addition, consumer confidence index in Japan declined to 38.6 points in September against the forecast of 37.2 points

Tankan business survey, which was published this week, showed that expectations of the large industrial enterprises amounted to +2 points in September against the forecast of +3 points. Expectations of large non-industrial enterprises demonstrated decline of 11 points versus the forecast of -14 points and -21 points previously. At a two-day meeting last week the Bank of Japan left interest rate the level of 0.10% per annum, as expected. Regulator has commented that he is going to continue lending program until 30 April 2012. The Bank has refrained additional stimulation of the economy deciding to wait for the more complete results. Volume of assets purchase was maintained at 50 trillion yen.

From the fundamental point of view Japanese economy is stable as far as it is possible after the disaster in March. However, the impact of the expensive Yen can provoke resumption of talk about mitigation of fiscal conditions.

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. The data released at the end of the last week included the following information about inflation: base national CPI amounted to +0.2% y/y in August. In addition, it also became known that unemployment fell to 4.3% in August against the forecast of 4.7% and previous level of 4.7%.

 

[LF.Anastasia]

AUD: Growth of Australian Dollar was interrupted

At the Forex currency market the Australian Dollar rate has interrupted the growth of the last five sessions on Tuesday and is being moderately corrected, amid slightly negative external background.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is moving in a similar way in the overbought zone, and is giving a buy.

Forex recommendations: in case of breakdown at the level of 0.9950, the pair will go to 0.9930 and 0.9900. If downward breakdown does not take place, the pair will consolidate at the current levels.

As it became known on Tuesday business confidence NAB in Australia increased to -2 points in September against preliminary level of -3 points. At the same time business conditions increased by 2 points, as per NAB research, against the preliminary level of -9 points, which the Research Agency attributed to the sharp fall of the AUD’s rate yesterday.

As it became known earlier composite activity index in the construction sector AIG in Australia fell by 2.1 points, up to 30.0 points in September. Consumer lending in Australia amounted to +0.2% in August against the level of +0.3% m/m in July. It has become another reason for selling the AUD. Index of leading indicators Westpac/MI in Australia increased by 1.4% in July, to the level of 284.2 points (+3.1% y/y) against preliminary expectations of +2.7%. As it became known earlier consumer inflation expectations in Australia increased to 2.8% in September, as per Institute of Melbourne against provisional estimate of 2.7%. According to statistics released earlier business activity index in the manufacturing sector of Australia fell to 42.3 points in September against the previous level of 43.3 points. Most likely it has been the impact of the general recession in demand. According to the data released in the middle of the week, retail sales in Australia grew by 0.6% m/m in August versus similar growth a month earlier.

Recall that earlier JP Morgan revised its view on the interest rate of Australia- economists do not expect the growth of rate by 25 basis points in 2012, predicting that the interest rate will remain at the current level until the end of the next year. At the regular meeting last week the Reserve Bank of Australia decided to leave interest rate unchanged at the level of 4.75% per annum. Thus, the pause in the process of monetary tightening policy of the RBA has been lasting for 11 months. In the follow-up comments the regulator said that monetary policy can mitigate in the future if inflation requires it.

In the follow-up statement it is noted that more time can be required to analyze the impact of turbulence in the markets. Apparently, the rate of the RBA is unlikely to be raised until the first quarter of 2012. Comments stressed that financial markets are too volatile and risks of slowdown in the world economy is too high to think about the rise in the rates. Decline in the prices for raw materials is also a negative factor for Australia.