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[LF.Anastasia]

AUD: Australian Dollar is still in the focus of sellers

At the Forex currency market the Australian Dollar rate is in the red on Wednesday, since traders’ eagerness to risk is very low.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is moving down, giving a sell signal; volumes are minimal. Stochastic Oscillator is losing positions in the neutral zone, giving a signal for moderate sales.

Forex recommendations: in case of breakdown at the level of 1.0080, the pair will go to 1.0070 and 1.0050. If downward breakdown does not take place, the pair will consolidate at the current levels.

According to statistics released this morning, leading indicators index Westpac in Australia fell by 0.3% in September against the growth of 0.8% a month earlier. It is not surprising taking into account that strong influence of European and Chinese situations on the economy of Australia. According to the data released earlier, consumer sentiment WESTPAC in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to monetary politician Evans, indicator is now at the highest level since May 2011; however this shall not stop RBA from lowering the rate again at the meeting in February.

Minutes of the last meeting of the Reserve Bank of Australia were released today. According to the document, The RBA expects that in the next two years dynamics of the country’s GDP will be close to the trend; at the same time regulator noted that latest statistics has improves slightly. Slowdown of the Chinese economy naturally affected the growth rate of the Australian economy and inflation in Australia probably has reached its peak. According to RBA, decline in market rates enables to maintain discount rate unchanged, while high risks of deceleration in Australian economy, which can be caused by recession in Europe, are still preserved.

As per the estimates of the Treasury of Australia, the Asia-Pacific region is much stronger than Europe and the USA. It is important to understand that growth of Asian economies can be not linked with Europe. According to the Treasury, Australia has all chances to change current course of monetary policy if it will be necessary. This opinion agrees with general outline of the previous views of the politician. According to the comments of Mr. Lowe, the head of RBA, serious threat to the future of the EU has faded away and world economic conditions are favourable for the development of agriculture in Australia. He believes that domestic demand of Asia is growing up at a good pace and floating rate of the AUD positively affects the price of raw materials in the agricultural sector.

Unemployment rate in Australia decreased to 5.2% in October against 5.3% a month earlier. Business confidence NAB increased to 2 points in October against preliminary level of -1 points. According to NAB, the growth has been triggered by expectations that the Reserve Bank of Australia will continue to soften monetary policy in the future. It is interesting that business confidence NAB in Q3 amounted to -4 points in Q3; while the index had been at the level of +5 points in Q2. According to estimates of the observers, the level of employment, sales and corporate profit in the country has dropped considerably.

 

[LF.Anastasia]

CAD: Canadian Dollar is getting weaker before our eyes

At the Forex currency market the Canadian Dollar rate is traded downward, due to investors’ aversion to risk and also under pressure of decline in oil prices.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from bottom to top and is traded in the positive area, moving along the signal line, and not giving a clear signal. Stochastic Oscillator is going up in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0265, the pair will go to 1.0280 and 1.0290. If upward breakdown does not take place, the pair will remain at the current levels.

As it became known earlier, shipment in the manufacturing sector of Canada increased by 2.6% in September against the forecast of 1.3% m/m. However we should not make hasty conclusions about revival of industry in Canada as proximity of the U.S. still matters. According to information received earlier, Canadian companies are going to continue effective work in the future, by increasing volume of investments and creating new jobs; however not as fast as it had been announced earlier. The forecast for sales in 2012 has been lowered in the country; as a result, local producers had to temper their personal forecasts. According to the estimates of the Bank of Canada, sentiment of the leaders of the large companies fell down compared with the summer period, since top management expects the decrease in the U.S. GDP and conservation of uncertainty in respect to global economic outlooks.

The Bank of Canada believes that GDP of the country will amount to 2.8% in 2011 (decline by 0.1% against the forecast in April), in 2012 it will be 2.6% and in 2013: 2.1%. According to the Bank, export performance in Canada is weak, because low demand in the U.S. impedes development of the index and expensive CAD also offers a challenge. The rise in the interest rate in Canada will directly depend on stability in economic growth.

Unemployment rate increased by 0.2% in October, up to the level of 7.3% versus the level of 7.1% in September. Full employment reduced by 71.7 thousand, part- time employment increased by 17.7 thousand. Overall rate of employment in Canada fell by 54 thousand last month against the growth of 60.9 thousand in September. After the release of this statistics representative of the Bank of Canada Harper noted that employment statistics fully reflects low confidence both in Canada and in the world; however labour sector is very volatile. It is natural that developments in Eurozone affect economy of Canada. The head of the Bank of Canada Carney noted this week that Canadian banks can reduce volume of lending and direct efforts to buying European assets.

 

[LF.Anastasia]

EUR/USD: Euro is taking timid attempt of correction

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

By 9.30 the Euro is at 1.3488 against yesterday’s closing level of 1.3475.

Today investors continue to follow the situation at European auctions: France is prepared to place bonds on Thursday as well as Spain. Paris expects to receive about 7 billion euro from the market; Spain is going to offer traders bonds with maturities until 2020 for the amount of 4 billion euro.

Yesterday rating agency Fitch added oil to the fire noting that risks for the U.S. banks can increase if European debt problems continue to progress at this pace.

Today, investors will be interested in yesterday’s news from the U.S. Nevertheless the most attention will be focused on Europe.

Most likely, the pair EUR/USD will not leave the range of 1.3420-1.3550 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound hopes for correction

At the Forex currency market the British Pound Sterling rate makes attempts for correction on Thursday after massive sales this week. Meanwhile external background has not changed significantly; deterioration of the background has not happened either.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it started to descend again and is ready to shape a sell signal. Stochastic Oscillator has pushed away from oversold zone, however still remains in its boundaries and started to shape a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: : in case of break down at the level of 1.5760, target for the sale will be the levels of 1.5770 and 1.5790. If downward breakdown does not take place, the pair will to start to descend again at around 1.5720.

It became known today that consumer confidence index Nationwide in the UK declined to the record lows of 36 points in October against the forecast of 43 points. Consumer expectations fell to 48 points against previous level of 62 points.

It is a negative signal because steady economic growth cannot be expected without revival of consumer sentiments.

In addition, according to the data released yesterday the Bank of England has revised its inflationary expectations, as per the Bank estimates, in three years time CPI will be 1.5%, while volume QE will be STG275 billion and interest rate will be consistent with market expectations.

At that, Governor of the Bank of England immediately noted that economic situation in Britain remains complex and growth of industrial output shall be practically zero since mid-2012, although in the short-term it will be weaker than previously expected.

According to him, resources of monetary policy to stimulate economy are limited.

At the meeting which was held earlier, the Bank of England kept interest rate unchanged at the level of 0.50% per annum as expected. The rate of the Bank of England is at the current record-breaking low level since March 2009, largely due to the weak economic growth and rapid rise in inflation. Follow-up comments did not add anything new, the Bank of England remained loyal to the conservative policy and left previous size of QE in the amount of 275 billion pounds. It will take regulator another three months to finalize purchases as part of an additional package to QE and after that he can revert to revision of its volume. Nevertheless, Central Bank increased QE package only in October, therefore, it is hardly realistic to expect any serious monetary measures from British regulator.

British Prime Minister Cameron believes that there is severe turbulence in the market now while Europe is experiencing hard time. The rise in the rates will be disastrous in the current situation especially for households; so, government’s sympathies are obviously not in favour of bankers.

 

[LF.Anastasia]

CHF: Swiss Franc is back to the lows of October

At the Forex currency market Swiss Franc rate is still traded downward on Thursday, which has already led the currency to the local lows of October.

Forex forecast: MACD indicator for the pair USD/CHF started to move upward from the signal line and is shaping a buy signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.9190, the pair USD/CHF will go to 0.9200 and 0.9220.

In terms of macro-statistics, economy of Switzerland is stable this morning.

Today, investors are waiting for the release of investors’ economic expectation index ZEW in November.

Unemployment rate in Switzerland rose to 2.9% which was expected rise from 2.8%, however traders were upset. According to statistics released earlier monetary reserves in Switzerland decreased to 242.7 billion francs in October against ***.4 billion in September. Representative of Swiss National Bank Mr. Dantin said earlier that strong Franc continues to exert pressure on the economy of the country and, and SNB is prepared to take urgent measures in the event of deflation risks. He reiterated that economy of Switzerland is extremely dependent on exports.

Representative of SNB Mr. Jordan said today, that Swiss regulator does not need external guidance on monetary policy, as it is an independent institution and does not intend to receive instructions from business groups and politicians. SNB will continue to take appropriate measures if economic forecasts and deflation will need them. According to him growth of Swiss economy has slowed down earlier, due to the high exchange rate of Swiss Franc.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August. Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September. According to the head of Swiss national Bank Mr. Hildebrand, current crisis has a devastating effect and price stability which has been achieved through monetary policy is not a guarantor of financial stability. Therefore, the main goal of SNB is to ensure price stability. According to the quarterly report of SNB, economy of the country will move in the sideways in the second half of the year, largely, 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 is attributed 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 continues to rise in price gradually

At the Forex currency market the Japanese Yen rate continues to grow gradually on Thursday, however despite destabilization of the external background, there are no big volumes for the Yen.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is going down, giving a buy signal; however, at the same time volumes are decreasing. Oscillator has come into oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.90, the pair will go to 76.85 and 76.70. If downward breakdown does not take place, the pair will consolidate at the current levels.

State of Japanese economy has not changed significantly this morning.

At two-day meeting which finished today, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October. It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once.

Japanese economy is still dependant on the external demand, which cannot give much hope at the moment. This encourages Yen’s trend to grow.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y. Plus to this, according to the data released last week, index of economic observers rose to 45.9 points in October versus 45.3 points in September. This has been the first growth of the index in three months. Judging by statistics Japanese economy has fully recovered from disaster in March. However, negative impact of the expensive national currency is still very strong and it is not clear yet how long current balance in economy will persist.

Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.

 

[LF.Anastasia]

AUD: Sales of Australian Dollar have suspended

At the Forex currency market today the Australian Dollar rate has suspended its decline caused by the global sales, since external background has temporarily stabilized. The currency has all conditions for technical rebound especially because the pair AUD/USD seems to be oversold.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is moving down, giving a sell signal; volumes are minimal. Stochastic Oscillator is losing positions in the neutral zone, giving a signal for moderate sales and approaching oversold zone..

Forex recommendations: in case of breakdown at the level of 1.0080, the pair will go to 1.0070 and 1.0050. If downward breakdown does not take place, the pair will consolidate at the current levels. The AUD can go up to к 1.0100 as part of technical correction.

Minutes of the last meeting of the Reserve Bank of Australia were released today. According to the document, The RBA expects that in the next two years dynamics of the country’s GDP will be close to the trend; at the same time regulator noted that latest statistics has improves slightly. Slowdown of the Chinese economy naturally affected the growth rate of the Australian economy and inflation in Australia probably has reached its peak. According to RBA, decline in market rates enables to maintain discount rate unchanged, while high risks of deceleration in Australian economy, which can be caused by recession in Europe, are still preserved.

Unemployment rate in Australia decreased to 5.2% in October against 5.3% a month earlier. Business confidence NAB increased to 2 points in October against preliminary level of -1 points. According to NAB, the growth has been triggered by expectations that the Reserve Bank of Australia will continue to soften monetary policy in the future. It is interesting that business confidence NAB in Q3 amounted to -4 points in Q3; while the index had been at the level of +5 points in Q2. According to estimates of the observers, the level of employment, sales and corporate profit in the country has dropped considerably.

According to statistics released yesterday, leading indicators index Westpac in Australia fell by 0.3% in September against the growth of 0.8% a month earlier. It is not surprising taking into account that strong influence of European and Chinese situations on the economy of Australia. According to the data released earlier, consumer sentiment WESTPAC in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to monetary politician Evans, indicator is now at the highest level since May 2011; however this shall not stop RBA from lowering the rate again at the meeting in February.

 

[LF.Anastasia]

CAD: Canadian Dollar took a break

At the Forex currency market the Canadian Dollar rate is traded almost without deviation on Thursday after three-day retreat.

Forex forecast: MACD indicator for the pair USD/CAD has broken through the signal line from bottom to top and is traded in the positive area, moving along the signal line, and not giving a clear signal. Stochastic Oscillator is going up in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0220, the pair will go to 1.0230 and 1.0250. If upward breakdown does not take place, the pair will remain at the current levels.

Canadian Dollar as well as other major commodity currencies is not in the focus of seller’s attention today; while external markets do not provide additional grounds for selling; however buyers do not rush to repurchase previous sales either.

As it became known earlier, shipment in the manufacturing sector of Canada increased by 2.6% in September against the forecast of 1.3% m/m. However we should not make hasty conclusions about revival of industry in Canada as proximity of the U.S. still matters.

Unemployment rate increased by 0.2% in October, up to the level of 7.3% versus the level of 7.1% in September. Full employment reduced by 71.7 thousand, part- time employment increased by 17.7 thousand. Overall rate of employment in Canada fell by 54 thousand last month against the growth of 60.9 thousand in September.

After the release of this statistics representative of the Bank of Canada Harper noted that employment statistics fully reflects low confidence both in Canada and in the world; however labour sector is very volatile. According to information received earlier, Canadian companies are going to continue effective work in the future, by increasing volume of investments and creating new jobs; however not as fast as it had been announced earlier. The forecast for sales in 2012 has been lowered in the country; as a result, local producers had to temper their personal forecasts. According to the estimates of the Bank of Canada, sentiment of the leaders of the large companies fell down compared with the summer period, since top management expects the decrease in the U.S. GDP and conservation of uncertainty in respect to global economic outlooks.

The Bank of Canada believes that country’s GDP will amount to 2.8% in 2011 (decline by 0.1% against the forecast in April), in 2012 it will be: 2.6% and in 2013: 2.1%. According to the Bank, export performance in Canada is weak, because low demand in the U.S. impedes progress in the index and expensive CAD also offers a challenge. The rise in the interest rate in Canada will directly depend on stability in economic growth.

 

[LF.Anastasia]

EUR/USD: Euro has stabilized at the end of the week

The pair EUR/USD has stabilized at the currency market on Friday morning.

By 9.35 the Euro is at 1.3479 against yesterday’s closing level of 1.3464.

All week investors have been actively selling major currency pair and panic in the market subsided only by Friday when pessimistic expectations of American statistics has outweighed European negative factor.

Main auctions in Europe are over and it is obvious that level of risk for investors is extremely high. Italian government gave guarantees to Eurozone to implement anti-crisis reforms; however market got used to such assurance and ignored this information.

It is unlikely that any sharp movements can take place at the end of the week, especially because last sessions were very volatile.

Most likely, the pair EUR/USD will not leave the range of 1.3420-1.3520 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is concluding the week with growth

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Friday as external background has stabilized at the end of the week and new grounds for sales have not turned up.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it started to descend moderately and is ready to shift to sideways movement, not giving a clear signal. Stochastic Oscillator remains in the oversold zone, maintaining a sell signal.

Forex recommendations: in case of break down at the level of 1.5790, target for the buying as part of rebound will be the levels of 1.5800 and 1.5820. If upward breakdown does not take place, the pair will descend again at around 1.5720.

It became known today that British prime-minister Cameron is going to Berlin to meet German Chancellor Angela Merkel to discuss how to maintain economic ties within Eurozone. According to him, there is high turbulence in the market now, while Europe is going through hard times. In the current situation the rise in the interest rate will be disastrous first of all for households and government’s sympathies are obviously not in favour of bankers.

In other respect there are no significant changes in the economy of Great Britain.

It became known today that consumer confidence index Nationwide in the UK declined to the record lows of 36 points in October against the forecast of 43 points. Consumer expectations fell to 48 points against previous level of 62 points. It is a negative signal because steady economic growth cannot be expected without revival of consumer sentiments. In addition, according to the data released yesterday the Bank of England has revised its inflationary expectations, as per the Bank estimates, in three years time CPI will be 1.5%, while volume QE will be STG275 billion and interest rate will be consistent with market expectations.

The head of the Bank of England Mervyn King immediately noted that economic situation in Britain remains complex and growth of industrial output shall be practically zero since mid-2012, although in the short-term it will be weaker than previously expected.

According to him, resources of monetary policy to stimulate economy are limited.

At the meeting which was held earlier, the Bank of England kept interest rate unchanged at the level of 0.50% per annum as expected. The rate of the Bank of England is at the current record-breaking low level since March 2009, largely due to the weak economic growth and rapid rise in inflation. Follow-up comments did not add anything new, the Bank of England remained loyal to the conservative policy and left previous size of QE in the amount of 275 billion pounds. It will take regulator another three months to finalize purchases as part of an additional package to QE and after that he can revert to revision of its volume. Nevertheless, Central Bank increased QE package only in October, therefore, it is hardly realistic to expect any serious monetary measures from British regulator.