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[LF.Anastasia]

CHF: Swiss Franc is stable in advance of Christmas

At the Forex currency market Swiss Franc rate is traded slightly upward on Friday, however, is still within oversold range in the last days of the year.

Forex forecast: MACD indicator for the pair USD/CHF is returning to sideways in the positive area again and is not giving a clear signal. Stochastic Oscillator is pushing away from the oversold zone and starting to grow in the neutral zone, giving a weak buy signal.

Forex recommendations: in case of break down at the level of 0.9340, the pair USD/CHF will go to 0.9350 and 0.9360. However, there is a high chance of consolidation of the pair at the current levels.

Situation in the country is stable in terms of macro-statistics.

Swiss National Bank noted earlier that the regulator is prepared to take additional measures if situation at Forex deteriorates. According to SNB, strong Franc creates extra problems for the economy and the issue of negative interest rates and control over the capital movement is being thoroughly scrutinized in the Bank.

It became known earlier that trade balance in Switzerland rose by 3.0 billion francs in November against the forecast of +2.00 billion francs and previous value of +2.15 billion francs. Index is favourable, however it is based on the efforts of the local regulator to curb the rate of the Franc.

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.

Three-month Libor rate was left in the range of 0-0.25%, closer to zero; the Bank did not change pegging level of Franc to Euro, maintaining the actual level of 1.20. In the follow up comments the head of SNB Mr. Hildebrand stressed that the regulator will continue to maintain the target rate of CHF, with the help of purchases of foreign currency in unlimited quantities and additional package of measures if situation requires. SNB is ready to maintain high level of liquidity, as inflation growth is not expected. In general, economy of the country depends a lot on the European crisis.

Apparently, SNB has adopted attitude of an onlooker, keeping in place existing management tools, being pretty confident that they can start intervention any time.

 

[LF.Anastasia]

JPY: Japanese Yen keeps fighting for strengthening

At the Forex currency market the Japanese Yen rate has made one more attempt to revert to strengthening at the end of the week, however the level 78.00 was a far too solid obstacle.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator is going up in the neutral zone and is giving a moderate buy signal.

Forex recommendations: in case of breakdown at the level of 78.15, the pair will go to 78.30 and 78.40. If upward breakdown does not take place, the pair will consolidate at the current levels.

A meeting of the Bank of Japan, which was held earlier, was gloomy. Thus, the regulator noted that growth of economic activity has slowed down and activity in Japanese economy is zero. The Bank has revised economic situation assessment downward in comparison with November, which is logical. Japanese economy will start to recover as soon as pressure from Europe diminishes.

In addition, interest rate in the country was left unchanged at the level of 0.1%. This decision had been expected.

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the “fly-through mode” presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

Statistics released earlier was negative. Japanese statistics is negative today. Trade balance deficit amounted to Y684.7 billion in November against the forecast of -Y442.4 billion; at the same time exports decreased by 4.5% y/y in November, while imports increased by 11.4% y/y. It is getting more difficult for Japan to maintain economic growth rate, as both, significant weakness of the world economy and strong Yen complicates the process.

Finance Minister of Japan Mr. Azumi has noted yesterday that markets have trust in the USD. Declaration about intention of Japan to buy Chinese bonds was of interest. Azumi said that final decision has not been adopted yet and prospects of assets purchase should not be interpreted as a complete abandonment of dollar’s investments. On the other hand it is quite clear that Japan takes preventive measures in the hope of protecting the country from risks in the future.

 

[LF.Anastasia]

AUD: Australian Dollar continues to grow

At the Forex currency market the Australian Dollar rate is traded upward on Friday, for the fourth consecutive session, making use of the calm external background.

Forex forecast: MACD indicator for the pair AUD/USD continues to move downward away from the signal line in the negative area and is giving a sell signal. Stochastic Oscillator is going up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0170, the pair will go to 1.0190 и 1.0210.

There has not been any important Australian statistics today and current growth is based on stability in the stock exchanges before Christmas.

Unemployment rate increased to 5.3% in November against the forecast of 5.2%. Employment rate fell by 6 thousand against the growth of 16.8 thousand earlier. The indicator reflects the impact of European debt problems on the Australian economy. Retail sales in Australia increased to the minimum value of +0.2% m/m over 4 months in October. In September the index rose by 0.4%, and by 0.6% in August.

Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. This data is positive at the moment as current conditions have stabilized; however levels of business confidence are still unvaried. It became known yesterday that trade balance in Australia fell to +A$1.60 billion in October against expectations of +A$2.0 billion. Slump in the global demand has played its part here as well.

Statistics released this week showed that leading indicator index Westpac-MI in Australia increased to ***.2 points (+0.4 points) in October. The data reflects the pace of economic activity in the next 3-9 months; index has increased on monthly basis, however, it went down on annual basis (2.6% against 2.8% earlier). This is a signal that business activity in the country may decline in the coming months.

As it was noted by Australian Central Bankon Tuesday, the country is fighting against repercussions of European debt crisis with the help of investment boom: minutes of the last meeting of the Reserve Bank of Australia showed that there is no urgent need at the moment in lowering rate and current steps directed to ease monetary policy is sufficient to support economy. Observers believe that lowering of the rate of RBA in December was just a safeguard against external negative factors.

 

[LF.Anastasia]

NZD: New Zealand Dollar has ignored earthquake

At the Forex currency market on Friday the New Zealand rate has almost ignored the news about earthquake of 5.8 points in Christchurch. The rise in the currency had been suspended; however the NZD did not demonstrate significant drawdown.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and resumed its decline, giving a sell signal. Stochastic Oscillator stands still close to overbought zone and tends to shift into sideways.

Forex recommendations: in case of breakdown at the level of 0.7755, the pair will go to к 0.7760 and 0.7770. There is a high chance of rebound.

It became known today that there was an earthquake of 5.8 points in Christchurch, New Zealand. Severe damages have not been reported yet.

It became known yesterday that GDP in New Zealand increased by 0.8% q/q in Q3 (+1.9% y/y) against the forecast of +0.6% on quarterly basis. Significant support to the economy of New Zealand was provided by Rugby Championship which attracted a lot of investments into the country. GDP 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, however has revived later. Most likely the data in Q4 will be weaker.

Trade balance in New Zealand was at the level of –NZ$*** million in October against the level of NZ$784 million in September. The index remained in deficit last month although it was higher than forecasts of economists. Volumes of export increased by 5.3% (NZ$3.9 billion) on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production. Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier.

It became known this week that business activity index in the service sector amounted to 56.6 points in November, as per BNZ estimates, against preliminary level of 51 points; thus the index has reached twenty-month highs now. The report also showed that new orders of companies and enterprises, as well as sales became a catalyst for activity. In addition, the rise in activity was recorded in the four major regions of the country for the first time this year.

 

[LF.Anastasia]

EUR/USD: Activity in the pair is minimal today

The pair EUR/USD is growing moderately at the Forex currency market on Monday morning, amid low trading activity.

By 9.15 Moscow time the Euro is at 1.3060 against closing level of 1.3042 on Friday.

Main trading floors are closed today, due to celebration on the Catholic Christmas, therefore activity in the currency market is expected to be minimal. Macro-economic calendar is also nearly blank.

Drastic changes of the trading pattern are not expected in the last week before the New Year, it is unlikely that any of the strategic players will conduct serious deals at the end of the year.

Most likely the pair EUR/USD will not go beyond the range of 1.3020-1.3080 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound started this week with a slight rise

The British Pound Sterling is traded slightly upward at the Forex currency market on Monday morning.

Forex forecast: MACD indicator for the pair GBP/USD is traded upward in the negative area and is giving a buy signal, while volumes are average. Stochastic Oscillator is going down in the neutral zone and is giving an antipodal signal.

Forex recommendations: in case of breakdown at the level of 1.5625, target for buying will be the levels of 1.5640 and 1.5650. A chance of downward movement is high.

It became known today that UK house prices Hometrack fell by 0.2% m/m (+2.1% y/y) in December.

Activity in the pair is almost zero due to celebration of the Catholic Christmas.

Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3, statistics released earlier has supported buyers. The index is above preliminary assessment, which was appreciated in the market.

It became known earlier that consumer confidence GFK/NOP in the UK declined to-33 points in December against the level of -31 points in November. Judging by small real expenditures and low income of households, the British are getting more conscious about spending. Index is still at 35-year lows and presently regarded as a negative indication.

The Bank of England announced earlier that average annual inflationary expectations reduced to 4.1% in November against 4.2% in August. At the same time, two-year inflationary expectations were at the level of 3.4% (3.5% previously).

According to the data released earlier, CPI in Great Britain increased by 0.2% m/m (+4.8% y/y), as expected. British inflation has slowed down its pace; however the index is still too far from the target level of the Bank of England.

Great Britain still tries to keep away from European debt problems: yesterday, during discussions of ways to increase International Monetary Fund with the help of collective contributions, London stated that it would announce its decision at the beginning of 2012. Minutes of the last meeting of the Bank of England has been released this week: according to the document all members of the IFA (ratio 9-0) voted for maintaining interest rate at the current level. In addition, the Committee believes that changes in the program of assets purchases will not bring significant benefits; however, if inflation does not subside, the increase in the volume of the assets purchase program can be required. Sharp decrease of inflation is still expected in the first 6 months of 2012, the prospects of CPI in the next 6 months look more blurry. It is also worth noting that the Bank of England expects stagnation in the economy in the next quarter and GDP growth in Q1 next year.

 

[LF.Anastasia]

CHF: Swiss Franc launched last week before New Year with serenity

At the Forex currency market Swiss Franc rate almost stands still on Monday since there is no trading momentum.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is going down slowly, giving a weak sell signal. Stochastic Oscillator continues to grow in the neutral zone and is giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9370, the pair USD/CHF will go to 0.9380 and 0.9390. However, there is a high chance that the pait will consolidate at the current levels.

Macro-economic proves that situation in the country is stable. Catholic world is busy celebration Christmas and a New Year after that, which means that a chance of important developments in the market is very low.

Swiss National Bank noted earlier that the regulator is prepared to take additional measures if situation at Forex deteriorates. According to SNB, strong Franc creates extra problems for the economy and the issue of negative interest rates and control over the capital movement is being thoroughly scrutinized in the 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.

Three-month Libor rate was left in the range of 0-0.25%, closer to zero; the Bank did not change pegging level of Franc to Euro, maintaining the actual level of 1.20. In the follow up comments the head of SNB Mr. Hildebrand stressed that the regulator will continue to maintain the target rate of CHF, with the help of purchases of foreign currency in unlimited quantities and additional package of measures if situation requires. SNB is ready to maintain high level of liquidity, as inflation growth is not expected. In general, economy of the country depends a lot on the European crisis. Apparently, SNB has adopted attitude of an onlooker, keeping in place existing management tools, being pretty confident that they can start intervention any time.

It became known earlier that trade balance in Switzerland rose by 3.0 billion francs in November against the forecast of +2.00 billion francs and previous value of +2.15 billion francs. Index is favourable, however it is based on the efforts of the local regulator to curb the rate of the Franc.

 

[LF.Anastasia]

JPY: Japanese Yen has consolidated at the level of 78.0

At the Forex currency market the Japanese Yen rate is traded slightly upward at the beginning of the week; however JPY maintains position close to 78.0.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator is going gown slowly in the neutral zone and is giving a moderate buy signal.

Forex recommendations: in case of breakdown at the level of 77.90, the pair will go to 77.80 and 77.75. If upward breakdown does not take place, the pair will consolidate at the current levels.

Situation in Japan is stable in terms of macro-economics. Markets in the country were closed on Friday.

A meeting of the Bank of Japan, which was held earlier, was gloomy. Thus, the regulator noted that growth of economic activity has slowed down and activity in Japanese economy is zero. The Bank has revised economic situation assessment downward in comparison with November, which is logical. Japanese economy will start to recover as soon as pressure from Europe diminishes.

In addition, interest rate in the country was left unchanged at the level of 0.1%. This decision had been expected.

Statistics released earlier was negative. Japanese statistics is negative today. Trade balance deficit amounted to Y684.7 billion in November against the forecast of -Y442.4 billion; at the same time exports decreased by 4.5% y/y in November, while imports increased by 11.4% y/y. It is getting more difficult for Japan to maintain economic growth rate, as both, significant weakness of the world economy and strong Yen complicates the process.

Finance Minister of Japan Mr. Azumi has noted yesterday that markets have trust in the USD. Declaration about intention of Japan to buy Chinese bonds was of interest. Azumi said that final decision has not been adopted yet and prospects of assets purchase should not be interpreted as a complete abandonment of dollar’s investments. On the other hand it is quite clear that Japan takes preventive measures in the hope of protecting the country from risks in the future.

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the “fly-through mode” presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

 

[LF.Anastasia]

AUD: Australian Dollar continues the trend of moderate strengthening

At the Forex currency market the Australian Dollar rate continues to strengthen on Monday; however low activity in the market affects trading process.

Forex forecast: MACD indicator for the pair AUD/USD continues to move downward away from the signal line in the negative area and is giving a sell signal. Stochastic Oscillator remains in the overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 1.0170, the pair will go to 1.0190 и 1.0210.

Important Australian statistics has not been released today.

Statistics released last week showed that leading indicator index Westpac-MI in Australia increased to ***.2 points (+0.4 points) in October. The data reflects the pace of economic activity in the next 3-9 months; index has increased on monthly basis, however, it went down on annual basis (2.6% against 2.8% earlier). This is a signal that business activity in the country may decline in the coming months.

It was noted by Australian Central Bankon last Tuesday, that the country has been fighting against repercussions of European debt crisis with the help of investment boom: minutes of the last meeting of the Reserve Bank of Australia showed that there is no urgent need at the moment in lowering rate and current steps directed to ease monetary policy is sufficient to support economy.

Observers believe that lowering of the rate of RBA in December was just a safeguard against external negative factors.

Unemployment rate increased to 5.3% in November against the forecast of 5.2%. Employment rate fell by 6 thousand against the growth of 16.8 thousand earlier. The indicator reflects the impact of European debt problems on the Australian economy. Retail sales in Australia increased to the minimum value of +0.2% m/m over 4 months in October. In September the index rose by 0.4%, and by 0.6% in August.

Consumer sentiment index Westpac-MI fell to 94.7 points, -8.3% m/m in December against the value of 103.4 points in November. Business confidence index NAB in Australia increased to 1 point in November against zero level in October. This data is positive at the moment as current conditions have stabilized; however levels of business confidence are still unvaried. It became known yesterday that trade balance in Australia fell to +A$1.60 billion in October against expectations of +A$2.0 billion. Slump in the global demand has played its part here as well.

 

[LF.Anastasia]

NZD: Activity in New Zealand Dollar is insignificant

At the Forex currency market on Friday the New Zealand rate is traded with slight deviation at the beginning of the week before New Year, as most of the players are absent.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and resumed sideways movement, not giving a clear signal. Stochastic Oscillator remains in the overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 0.7750, the pair will go to к 0.7760 and 0.7770. There is a high chance of rebound.

Situation in New Zealand is stable according to macro-statistics.

It became known last Friday that there was an earthquake of 5.8 points in Christchurch, New Zealand. Severe damages have not been reported yet.

Trade balance in New Zealand was at the level of –NZ$*** million in October against the level of NZ$784 million in September. The index remained in deficit last month although it was higher than forecasts of economists. Volumes of export increased by 5.3% (NZ$3.9 billion) on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production. Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier.

It became known last week that business activity index in the service sector amounted to 56.6 points in November, as per BNZ estimates, against preliminary level of 51 points; thus the index has reached twenty-month highs now. The report also showed that new orders of companies and enterprises, as well as sales became a catalyst for activity. In addition, the rise in activity was recorded in the four major regions of the country for the first time this year.

It became known earlier that GDP in New Zealand increased by 0.8% q/q in Q3 (+1.9% y/y) against the forecast of +0.6% on quarterly basis. Significant support to the economy of New Zealand was provided by Rugby Championship which attracted a lot of investments into the country. GDP 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, however has revived later. Most likely the index will be weaker in Q4.