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[LF.Anastasia]

JPY: Japanese Yen came down from the clouds to earth

At the Forex currency market the Japanese Yen rate makes successful attempts of correction on Thursday after sharp fall yesterday.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going up, giving a buy signal. Stochastic Oscillator reversed sharply in the neutral zone yesterday and directed upward, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 77.20, the pair will go to 77.40 and 77.60. If upward breakdown does not take place, the pair will consolidate at the current levels.

Apparently, the degree of optimism in the market is so high now that demand for the Yen as protective currency is going down. Investors do not need safe harbor, as they expect prompt resolution of problems in Eurozone.

Statistics released today showed that tertiary activity index in Japan fell by 0.2% m/m in August against the decline of 0.3% m/m in July. It became known yesterday that net orders in the machine building sector in Japan increased by 2.1% y/y in August against the growth of 0.4% in July. It is a positive indication; however we shall wait for the data in September to see dynamics of the index.

In other respects, there are no changes in the Country of the Rising Sun. 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%.

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. 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.

Tankan business survey 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. 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.

 

[LF.Anastasia]

AUD: Australian Dollar received support from positive statistics

At the Forex currency market the Australian Dollar rate is traded upward on Thursday supported by positive external background and good statistics released this morning.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is going up slightly giving a buy signal. Stochastic Oscillator is moving in a similar way in the overbought zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0230, the pair will go to 1.0240 and 1.0260. If upward breakdown does not take place, the pair will consolidate at the current levels.

Statistics released this morning showed that unemployment rate in Australia declined to 5.2% in September versus the level of 5.3% in August. This data demonstrated dynamics for the first time since this March. Employment rate rose by 20.4 thousand last month, while analytics expected the growth of not more than 10 thousand.

As noted in the Bureau of Statistics in Sydney, coal mining companies hire staff to meet demand for raw materials from China and India.

Therefore, today’s statistics cancelled expectations that the RBA will reduce the rate in the nearest future. 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. The follow-up statement said 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.

According to the data released yesterday, consumer confidence WESTPAC in Australia rose by 0.4% m/m, to the level of 97.2 points in October. As noted by monetary politician Evans it is possible that the rate will go down in November, since low growth of the index indicates general pessimistic sentiment.


As it became known on Tuesday, business confidence NAB in Australia rose 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 preliminary level of -9 points, which the Research Agency attributed to the sharp fall of the AUD’s rate earlier.

 

[LF.Anastasia]

NZD: New Zealand Dollar is waiting for additional catalysts

The New Zealand Dollar rate stands still at the Forex currency market on Thursday, analyzing previous growth and awaiting news supportive factors.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area, going up slightly, giving a buy signal. Stochastic Oscillator maintains similar signal in the overbought zone.

Forex recommendations: in case of breakdown at the level of 0.7960, the pair will go to 0.7970 and 0.79800.

Macro economic situation in New Zealand remains almost unchanged this morning.

As it became known on Wednesday morning, house prices QV in New Zealand increased by 0.7% y/y in September against the rise of 0.1% y/y in August. Meanwhile, the AUD is closely monitoring the situation in China, since potential trade war between China and the USA does not look promising to high-yielding currencies.

According to Fitch economists, current account surplus in New Zealand will expand in 1012 and will amount to 4.9%, in 2013-5.5%. At the same time net level of foreign debt of New Zealand is above the level corresponding to its ranking. Finance Ministry of the country noted that rating agencies in the world are too cautious about debt problems and it is still unknown whether the similar actions should be expected from other players in the ranking sector. Earlier the head of the Reserve Bank of New Zealand said that probably financing of the banks in the country can become a problem in 1012. According to Bollard banking system of New Zealand is in a better state now that it was in 2008; however risks from Europe and the U.S. are still there. The rate of NZD is still overvalued.

It became known earlier that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against +0.9% q/q (+1.6% y/y) in Q1. Commodity prices ANZ in New Zealand fell by 1.3% m/m in September against -1.2% m/m. Apparently, economy of the country, which is focused on export suffers from significant external impact: we are speaking here about global reduction in demand all over the world. Therefore, economy of New Zealand has actually fallen into stagnation: GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report 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]

EUR/USD: Euro analyses morning statistics

The pair EUR/USD is traded slightly downward at the Forex currency market on Friday morning.

By 9.00 MSK the Euro is at 1.3771 against yesterday’s closing level of 1.3777.

Morning news that International Rating Agency S&P downgraded the rating of Spain to the level of AA- against the previous level of AA with the “negative” forecast was taken reasonably pessimistic in the market, as rating downgrade of the weak peripheral countries is not a surprise for traders any more.

Statistics of China did not add any positive factors showing decrease in inflation levels in September. Along with the data of this week, which demonstrated decline in export volumes, Chinese statistics indicates deceleration of the economy of China, measures of the government finally yielded fruit.

Investors will be interested in statistics on trade balance in Eurozone this afternoon, tonight their attention will be focused on the U.S. retail sales data.

Most likely the pair EUR/USD will not go beyond the range of 1.3700-1.3800 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound continues to grow at the end of the week

At the Forex currency market the British Pound Sterling rate continues to grow on Friday.

Forex forecast: MACD indicator for the pair GBP/USD started to grow moderately in the negative area, shaping a buy signal; however volumes are decreasing. Stochastic Oscillator is still in the overbought zone, maintaining a buy signal.

Forex recommendations: in case of break down at the level of 1.5870, target for purchase will be the levels of 1.5880 and 1.5900. However, if specified level is not broken down, the pair will have a chance to resume its decline.

The deputy head of the Bank of England Mr. Bean said this week that British regulator is ready for follow-up actions in addition to the expansion of the asset purchase program to stg75 billion, adopted last week.

Bean has clarified that the Bank of England will agree to additional economic stimulus if economic outlooks will suddenly worsen, for example if recovery rate will slow down significantly.

We would remind that as the outcome of the meeting in October, 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. According to him these measures are preventive since Britain is in the middle of the drastic crisis now.

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. Volume of retail sales BRC in the UK increased 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. As it became known earlier volume of production output in the UK increased by 0.2% m/m (-1.0% y/y) in August.

 

[LF.Anastasia]

CHF: Swiss Franc is in quiescent state in Friday

Swiss Franc rate almost stands still at the Forex currency market on Friday, the currency came to the end of the week with some growth despite all efforts of the Swiss national Bank.

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 is in the oversold zone, it is moving along the signal line and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8970, the pair USD/CHF will go to 0.8940 and 0.8920. If downward breakdown does not take place, the pair will remain close to the current levels.

It became known yesterday that producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September. Franc barely reacted to statistics.

In other respects Swiss economy remains unchanged. Apparently, positions of the Swiss National Bank are not too strong. Step by step Franc is successfully gaining strength. Earlier this week, the pair USD/CHF went down, following the pair EUR/CHF, which had been actively sold out by one of the Swiss Banks and British Clearing Bank, as dealers explained.

It is worth noting that SNB gave indications in September that could be interpreted as follows: regulator’s power to maintain the Franc is fading away. We would remind that according to the rumors which grow louder among investors in the market, SNB can revise its stand on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. According to Mr Jordan, a representative of the SNB, it is necessary to increase the reserves of the SNB in order to prevent growth of the Franc. SNB will take all measures to protect the target level of SNB. He also said that if they let the grass grow under the feet, CHF will rise above the parity level in pairing with the Euro. At the same time, monetary politician did not comment chances of increasing the target level.

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. It is not known precisely yet what volumes does SNB have at the trades now. According to the annual report of the SNB, over 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 does not lose hope to strengthen again

At the Forex currency market the Japanese Yen rate is getting slightly weaker at the end of the week, however the fact that yesterday the JPY managed to regain some of the losses of Wednesday proves its potential power.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going up, giving a buy signal. Stochastic Oscillator had reversed sharply in the neutral zone earlier and directed upward, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.95, the pair will go to 77.20 and 77.40. If upward breakdown does not take place, the pair will consolidate at the current levels.

It became known today that money supply M2 in Japan increased by 2.7% y/y, which agreed with the forecast. In addition, corporate goods price index rose by 2.5% y/y in September, which agreed with expectations. This data is important from standpoint of economy and speaks about relative stability; however, the Yen did not respond to it.

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%. Statistics released yesterday showed that tertiary activity index in Japan fell by 0.2% m/m in August against the decline of 0.3% m/m in July. It became known yesterday that net orders in the machine building sector in Japan increased by 2.1% y/y in August against the growth of 0.4% in July. It is a positive indication; however we shall wait for the data in September to see dynamics of the index.

Tankan business survey 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. 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

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. 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.

 

[LF.Anastasia]

AUD: Australian Dollar is in the black at the end of the week

At the Forex currency market the Australian Dollar rate stands still at the end of the week, analyzing external background.

Forex forecast: MACD indicator for the pair AUD/USD is in the negative area and is going up slightly giving a buy signal. Stochastic Oscillator is moving in a similar way in the overbought zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0190, the pair will go to 1.0200 and 1.0220. If upward breakdown does not take place, the pair will consolidate at the current levels.

In general, this week was successful for the AUD, which at first took advantage of the external background, then statistics to regain from losses of September. Unemployment rate in Australia declined to 5.2% in September versus the level of 5.3% in August. This data demonstrated dynamics for the first time since this March. Employment rate rose by 20.4 thousand last month, while analytics expected the growth of not more than 10 thousand. As noted in the Bureau of Statistics in Sydney, coal mining companies hire staff to meet demand for raw materials from China and India.

Therefore, this data has scored out expectations that the RBA will reduce the rate in the nearest future. 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. The follow-up statement said 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.

It became known this week that business confidence NAB in Australia rose 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 preliminary level of -9 points, which the Research Agency attributed to the sharp fall of the AUD’s rate earlier.

According to the data released earlier, consumer confidence WESTPAC in Australia rose by 0.4% m/m, to the level of 97.2 points in October. As noted by monetary politician Evans it is possible that the rate will go down in November, since low growth of the index indicates general pessimistic sentiment.

 

[LF.Anastasia]

NZD: New Zealand Dollar strengthens at the end of the week

At the Forex currency market the New Zealand Dollar rate consolidates close to the achieved levels, due to the neutral external background.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area, going up and giving a buy signal. Stochastic Oscillator maintains a similar signal in the overbought zone.

Forex recommendations: in case of breakdown at the level of 0.7960, the pair will go to 0.7970 and 0.79800.

Macro economic situation in New Zealand has not changed significantly this morning

According to economists from Fitch, current account surplus in New Zealand will expand in 1012 and amount to 4.9%, in 2013-5.5%. At the same time net level of foreign debt of New Zealand is above the level corresponding to its ranking. Finance Ministry of the country noted that rating agencies in the world are too cautious about debt problems and it is still unknown whether the similar actions should be expected from other players in the ranking sector. Earlier the head of the Reserve Bank of New Zealand said that probably financing of the banks in the country can become a problem in 1012. According to Bollard banking system of New Zealand is in a better state now that it was in 2008; however risks from Europe and the U.S. are still there. The rate of NZD is still overvalued.

It became known earlier that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against +0.9% q/q (+1.6% y/y) in Q1. Commodity prices ANZ in New Zealand fell by 1.3% m/m in September against -1.2% m/m. Apparently, economy of the country, which is focused on export suffers from significant external impact: we are speaking here about global reduction in demand all over the world. Therefore, economy of New Zealand has actually fallen into stagnation: GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report 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.

It became known this week that house prices QV in New Zealand increased by 0.7% y/y in September against the rise of 0.1% y/y in August. Meanwhile, the AUD is closely monitoring the situation in China, since potential trade war between China and the USA does not look promising to high-yielding currencies.

 

[LF.Anastasia]

EUR/USD: Euro remains at the local peaks

The pair EUR/USD is traded slightly downward at the Forex currency market on Monday morning after rapid growth at the end of last week.

By 10.00 MSK the Euro is at 1.3871 against closing level of 1.3881 on Friday.

Investors’ expectations that, Eurozone will overcome debt problems as actively as it started to tackle debt problems this autumn are favourable for the Unified European currency.

However, we should remember that current growth is based largely on hopes, rather than on real facts; therefore correction can come as a surprise.

The U.S. statistics scheduled for the release tonight will claim investors’ attention.

Most likely the pair EUR/USD will not go beyond the range of 1.3810-1.3880 at the trading session on Monday.