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[LF.Anastasia]

CHF: Swiss Franc regains from previous sales

At the Forex currency market Swiss Franc rate is still traded upward on Friday after recent descend to the local lows.

Forex forecast: MACD indicator for the pair USD/CHF is going up in the positive area and is shaping a buy signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal; although it tends to go out of the zone.

Forex recommendations: in case of breakdown at the level of 0.9160, the pair USD/CHF will go to 0.9150 и 0.9140.

As it became known recently, economic expectations ZEW in Switzerland amounted to -64.2 points in November against -54.4 points a month earlier. The data objectively reflects expectations for the next 6 months; it is obvious that Franc has been artificially kept at the low levels by the SNB and if it is released, pressure on the economy will be enormous.

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.

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.

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.

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 strengthen on Friday

At the Forex currency market the Japanese Yen rate is traded in the previous ascending channel at the end of the week. Situation with JPY remains unchanged for over six days.

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 remains in the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.70, the pair will go to 76.65 and 76.50. If downward breakdown does not take place, the pair will consolidate at the current levels.

Salary levels in Japan continue to reduce: according to statistics released today average salary was revised to -0.3% in September against decline of 0.2% in August.

At two-day meeting which finished yesterday, 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 strongly dependant on the external demand, which is not very reliable at the moment, which encourages Yen to grow.

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%. 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.

 

[LF.Anastasia]

AUD: Australian Dollar is still on sale

At the Forex currency market today the Australian Dollar rate is still under pressure of sales on Friday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is moving down, approaching the signal line and giving a sell signal; volumes are minimal. Stochastic Oscillator has come into oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9990, the pair will go to 0.9980 and 0.9960. If downward breakdown does not take place, the pair will consolidate at the current levels.

The Australian Dollar is still in a shaky position, since demand for high yield currencies is minimal. Situation in Europe is far from ideal, so as long as storm at the trading floors is not subsided there will not be any craving for risk.

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.

Ставка безработицы в октябре снизилась до 5,2% против 5,3% месяцем ранее. Деловое доверие NAB в октябре выросло до 2 пунктов против 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.

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.

 

[LF.Anastasia]

New Zealand Dollar is the lows of September at the end of the week

At the Forex currency market the New Zealand Dollar rate remains under strong pressure at the end of the week, descending to the lows of September.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal. Stochastic Oscillator remains in the oversold zone maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7580, the pair will go to 0.7570 and 0.7550. If downward breakdown does not take place, the pair will consolidate at the achieved levels.

Mass media informed today that obviously market incorporates into risks a possibility of rate lowering by the Reserve Bank of New Zealand which will follow Australia’s trend.

Based on the economic realities it will be difficult for the RBNZ to decrease the rate, since regulator pursues quite aggressive monetary policy.

According to previous data, GDP in New Zealand rose 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. Thus New Zealand economy is actually in the state of 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 volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points.

Statistics is still mixed which it the reflection of strong impact of the developments both in Europe and in China. 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. These have been the key in the issue of lowering of the rating. 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.

 

[LF.Anastasia]

EUR/USD: Euro started this week slightly upward

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

By 9.20 the Euro is at 1.3479 against closing level of 1.3514 on Friday.

The weakness of the USD at the beginning of the week was caused by expectations of the report from two-party commission of the U.S. Congress which has been developing a proposal to reduce budget deficit since August. Investors are concerned however that Commission will not offer anything fundamentally new and interest in risk will drop this week which will be advantageous for the USD.

It will be of interest that this week European Commission shall announce a finalized proposal on issuing bonds of Eurozone countries; however do not forget that Germany is still against this idea.

Most likely, the pair EUR/USD will not leave the range of .3500-1.3560 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound begun this week with sales

At the Forex currency market the British Pound Sterling rate is traded downward on Monday in response to another round of fears of Investors about state of affairs in Eurozone and once again triggered risk aversion.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it started to descend moderately and is giving a sell signal. Stochastic Oscillator remains in the oversold zone, maintaining a sell signal.

Forex recommendations: in case of break down at the level of 1.5750, target for sale will be the levels of 1.5730 and 1.5720.

It became known this morning that house prices Rightmove in the UK fell by 3.1% m/m (+1.2% y/y) in November. The Pound did not react to statistics too actively, since it had already been under pressure from sales.

According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.

In addition, it is also possible that QE program will be expanded.

It became known earlier 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.

 

[LF.Anastasia]

CHF: Swiss Franc did not abandon attempts to strengthen

At the Forex currency market Swiss Franc rate is still traded upward on Monday, since investors obviously do not have any other practicable trading idea, but to sit out turbulent times in the “quiet harbor”.

Forex forecast: MACD indicator for the pair USD/CHF is going up in the positive area and is shaping a buy signal. Stochastic Oscillator remains in the overbought zone and is giving a similar signal; although it tends to go out of the zone.

Forex recommendations: in case of breakdown at the level of 0.9160, the pair USD/CHF will go to 0.9150 and 0.9140.

On Tuesday investors expect publications of Swiss trade balance in October; on Thursday investors’ attention will be drawn to employment data in non-agricultural sector in Q3.

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.

Unemployment rate in Switzerland rose to 2.9%, which had been an expected rise from 2.8%. The data which is going to be released this week will show dynamics in the index.

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.

According estimates of Swiss National Bank, GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be 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.

As it became known recently, economic expectations ZEW in Switzerland amounted to -64.2 points in November against -54.4 points a month earlier. The data objectively reflects expectations for the next 6 months; it is obvious that Franc has been artificially kept at the low levels by the SNB and if it is released, pressure on the economy will be enormous.

 

[LF.Anastasia]

JPY: Japanese Yen is smoothly tending upward

At the Forex currency market the Japanese Yen rate is smoothly sliding upward.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is going down, giving a sell signal; volumes are minimal. Oscillator remains in the oversold zone and is giving a sell signal; although it tends to go out of the zone.

Forex recommendations: in case of breakdown at the level of 76.70, the pair will go to 76.65 and 76.50. If downward breakdown does not take place, the pair will consolidate at the current levels. It became known today that index of coincident indicators in Japan was revised up to 1.3 points in September against previous level of -1.4 points.

According to the minutes of the last meeting of the Bank of Japan, acquisition of two-year government bonds is an effective method of influence on the currency market; at the same time state of affairs in Eurozone has enormous affect as well. In addition, descending risks have increased for Japanese economy due to the growing Yen and collapse of the stock markets.

At two-day meeting which finished yesterday, 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 strongly dependant on the external demand, which is not very reliable at the moment, which encourages Yen 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.

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: Australian Dollar is descending

At the Forex currency market the Australian Dollar rate is descending again today, after some stabilization at the end of last week.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is moving down, giving a sell signal ans is preparing to break through the signal line from top to bottom. Stochastic Oscillator remains in the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9970, the pair will go to 0.9960 and 0.9950. If downward breakdown does not take place, the pair will consolidate at the current levels.

The Australian Dollar is still in a shaky position, since demand for high yield currencies is minimal. Situation in Europe is far from ideal; therefore, as long as turbulence at the trading floors is not subsided there will not be any craving for risk.

Situation in the Australian economy remains unchanged on Monday morning.

According to statistics released earlier, index of leading indicators Westpac in Australia fell by 0.3% m/m in September against 0.8% m/m a month earlier. It is not surprising if we take into to account strong influence of the situation in Eurozone and China on the Australian economy. According to statistics released earlier, consumer sentiments Westpac in Australia increased by 6.3% m/m in November, to the level of 103.4 points. According to the monetary politician Evans the level of the indicator has been at the highs since May 2011 which shall not prevent RBA from lowering the rate once again at the meeting in February.

Minutes of the last meeting of the Reserve Bank of Australia were released last week. According to the document, 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 had improved 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.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to weaken

At the Forex currency market the Canadian Dollar rate is traded downward on Monday: oil prices are under pressure today, interest in risk is almost zero and a break in the currencies sales, which took place on Friday, has proved its value.

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, giving a buy signal. Stochastic Oscillator has come into overbought zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0300, the pair will go to 1.0310 and 1.03201. If upward breakdown does not take place, the pair will remain at the current levels.

It became known at the end of last week that CPI increased by 0.2% (+2.9% y/y) in October against the forecast of growth of 0.1% (+2.7% y/y) The index was below the previous level of 3.1% y/y but remained within the range of 1-3% designated by the Bank of Canada.

Last month, prices in Canada increased mostly for gasoline and food.

As it became known earlier, shipments 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 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.

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.