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[LF.Anastasia]

AUD: Activity in Australian Dollar is dying down

The Australian Dollar rate almost came to a standstill at the Forex currency market on Wednesday: yesterday Australian trading floors were closed and the process of returning back to trades is very sluggish as it is only four days before the New Year.

Forex forecast: MACD indicator for the pair AUD/USD is moving along the signal line in the negative area and is giving a clear signal. Stochastic Oscillator remains in the overbought zone and is giving a buy signal.

Forex recommendations: : in case of breakdown at the level of 1.0160, the pair will go to 1.0170 и 1.0190. If upward breakdown does not take place, there will be a chance of rollback to 1.0120.

It was noted by Australian Central Bankon this week, 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.

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 earlier that trade balance in Australia fell to +A$1.60 billion in October against expectations of +A$2.0 billion.

Last week statistics 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.

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.

 

[LF.Anastasia]

NZD: New Zealand Dollar is growing moderately

At the Forex currency market the New Zealand rate is growing moderately in the middle of the week; however activity in the pair is minimal; therefore growth can be attributed to the side effect of volatility.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and continues sideways movement, not giving a clear signal. Stochastic Oscillator tends to go out of the overbought zone and is shaping a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7725, the pair will go to к к 0.7710 and 0.7700.

Macro-economic situation in the economy of New Zealand remains unchanged, markets in the country were closed yesterday.

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 had almost stopped growing, however revived later. Most likely the index will be weaker in Q4.

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.

According to the data released last week, 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.

Earlier it became known that there was an earthquake of 5.8 points in Christchurch, New Zealand. Severe damages have not been reported yet, however the NZD went down affected by the news.

 

[LF.Anastasia]

EUR/USD: Euro easily reached the lows of the year

The pair EUR/USD is traded downward at the Forex currency market on Thursday morning in response to deterioration in the external background.

By 9.25 Moscow time the Euro is at 1.2889 against yesterday’s closing level of 1.2937.

The reason for sales of the European currency was Italian auction taking place these days: the yield of securities is growing rapidly.

In addition, investors feared of the sharp rise in the balance of the European Central Bank; although final index was lower than the forecast by 239 billion euro. Taking into account that the regulator held a three-year auction recently, growth of the balance is not surprising; however reaction of the market proved to be strange.

Today there will be another volatile session at the end of the year.

Most likely the pair EUR/USD will not go beyond the range of 1.2865-1.2950 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound makes attempts to regain after yesterday’s fall

The British Pound Sterling rate is traded slightly upward at the Forex currency market on Thursday after active sales in the middle of the week.

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 minimal. Stochastic Oscillator fell in the neutral zone and is ready to come into oversold zone, maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 1.5460, target for sale will be the levels of 1.5440 and 1.5410.

Yesterday’s panic in the market was triggered by the risk aversion which was caused by new concerns about future destiny of Eurozone.

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. 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.

The Bank of England announced earlier that average inflationary expectations reduced by 4.1% in November against the level of 4.2% in August. At the same time, the level of two-year inflationary expectations was around 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. Therefore, British inflation is slowing down its pace; however the index is still too far from the target level of the Bank of England.

It became known this week that house prices Hometrack in the country fell by 0.2% m/m (+2.1% y/y) in December.

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 are not very clear.

 

[LF.Anastasia]

CHF: Swiss Franc has weakened

At the Forex currency market Swiss Franc rate remains weak on Thursday following sales last night, when investors once again got worried about hazy economic prospects in Eurozone.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is going down slowly, giving a weak sell signal, volumes are increasing. Stochastic Oscillator has come into overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9430, the pair USD/CHF will go to 0.9440 and 0.9460. There is a high chance that the pair will consolidate at the current levels.

Macro-economic situation in the country remains stable.

According to the data released this week leading indicators index KOF fell to 0.01 points in December against the forecast of 0.23% and previous revised value of 0.34 points.

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.

According to observers from Wells Fargo, economic indexes in Switzerland demonstrated slowdown all the year round and there are many indications showing that the weakness will continue for the next six months. According to them, domestic demand is also getting lower which is a negative sign. As for the rate, it is most likely that SNB will adhere to the zero level, due to soft inflation.

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 always have time to start intervention.

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.

 

[LF.Anastasia]

JPY: Japanese Yen is in demand, amid risk aversion

At the Forex currency market the Japanese Yen rate is traded upward on Thursday, due to demand from investors who wish to hedge their risks in the declining market.

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 down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 77.60, the pair will go to 77.50 and 77.30. If downward breakdown does not take place, the pair will consolidate at the current levels.

There have not been significant changes in Japan in terms of macro-economy this morning. Demand for the JPY is explained by investors’ intention to “sit out” time of turbulence in the safe harbor.

It became known today that preliminary retail sales in Japan fell by 2.3% y/y in November against the forecast of zero changes, consumer spending reduced by 3.2% y/y in November versus expectations of decline of 1.1% y/y. In addition, preliminary volume of industrial output decreased by 2.6% m/m in November (-1.5% y/y) against projected value of -0.8% m/m (-2.0% y/y).

The data is not impressive: the pace of decline is definitely accelerating, which is a negative factor for the recovering economy of Japan and for the forecasts; nevertheless, the JPY feels quite at ease.

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 this week, was slightly more optimistic: number of begun housing construction decreased by 0.3% y/y in November against the forecast of decline of 5.0% y/y; orders in the construction sector rose by 21.0% y/y in November versus the growth of 24.3% y/y in October.

In addition, the minutes of the last meeting of the Bank of Japan which was released yesterday, stated that it is necessary to trace back the effect of the recent soft policy; special concern is caused by the potential impact of the expensive Yen.

We would remind that a meeting of the Bank of Japan, which was held in December, 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.

Interest rate in the country was left unchanged.

 

[LF.Anastasia]

AUD: Australian Dollar is in complete uncertainty

At the Forex currency market the Australian Dollar rate is traded slightly upward on Thursday morning after the fall in the Asian session. Low interest to risk and thin market are not favourable to growth of the AUD rate.

Forex forecast: MACD indicator for the pair AUD/USD is moving along the signal line in the negative area and is giving a clear signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0080, the pair will go to 1.0070 and 1.0050.

Volatility in the high-yielding currencies remain high; however interest to risk is not there among investors who are still in the market a few days before New Year.

It was noted by Australian Central Bankon this week, 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.

Last week statistics 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.

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 earlier 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: New Zealand Dollar is in jeopardy to continue decline

At the Forex currency market the New Zealand rate remains under strong influence from external background on Thursday while investors’ interest in risk is very low

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and continues sideways movement, not giving a clear signal. Stochastic Oscillator is going down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7690, the pair will go to 0.7670 and 0.7650.

In terms of macro-statistics situation in New Zealand is stable.

Trade balance in New Zealand was–NZ$*** million in October against NZ$784 million in September. The index remained in deficit last month although it was higher than forecasts of economists. Volume of exports 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.

According to the data released last week, 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 with 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 investment 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 had almost stopped growing, however revived later. Most likely the index will be weaker in Q4.

 

[LF.Anastasia]

EUR/USD: Euro is still volatility-prone

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

By 9.25 Moscow time the Euro is at 1.2933 against yesterday’s closing level of 1.2961.

Market is still thin and prone to volatility; therefore sharp movements can be expected to any direction without reasonable explanation. In the last trading day of the year distinct trades are hardly possible.

All new statistics will be released in January, after New Year holidays, meanwhile, markets are governed by speculators.

Most likely the pair EUR/USD will not go beyond the range of 1.2900-1.2990 at the trading session on Friday.

 

[LF.Anastasia]

GBP: Sale of British Pound does not subside

The British Pound Sterling rate is traded downward at the Forex currency market.

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 minimal. Stochastic Oscillator is going down into oversold zone, maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 1.5410, target for sale will be the levels of 1.5390 and 1.5370.

Thin market and lack of investors in the pre-New Year session provide basis for speculative movements.

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

It became known this week that house prices Hometrack in the country fell by 0.2% m/m (+2.1% y/y) in December.

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 are not very clear.

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. 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.

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