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[LF.Anastasia]

EUR/USD: Euro is willing to keep on growing

The pair EUR/USD is traded slightly downward at the Forex currency market on Thursday morning, still staying at the highs of the week.

By 8.45 MSK the Euro is at 1.2858 against yesterday’s closing level of 1.2860.

Positive sentiment in the pair is based on expectations that Greece will resume negotiations with private creditors, which will have favourable outcome this time. It is all about writing off 50%of debts or more and Athens shall provide some guarantees that their previous commitments will be accomplished.

In addition, market positively reacted to the information that International Monetary Fund does not exclude possibility of increasing its resources to $500 billion.

It is quite possible that if stability of the external background is maintained, moderate growth of the pair will be continued: however, later, profit taking is not excluded.

Most likely the pair EUR/USD will not go beyond the range of 1.2801-1.2890 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: British Pound tends to make observation

At the Forex currency market the British Pound Sterling rate is traded slightly downward on Thursday.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 1.5435, the pair will go to 1.5450 and 1.5460. If sellers come back in the pair, the target for decline will be at 1.5350.

Statistics released today showed that consumer confidence Nationwide in the UK reduced to 38 points in December against the level of 40 points in November. It seems that the latest data has smoothed over the rise achieved in November, although it has not been unexpected. The end of 2011 was not easy for the British consumers, which reflected in statistics.

Meanwhile, unemployment continues to thrive in Britain. Unemployment rate rose to 8.4% in November against the forecast of 8.3%, the level of unemployed rate increased by 118 thousand for three months against +128 thousand for the previous three months, as per estimates.

According to the data released previously, house prices Rightmove in the UK dropped by 0.8% m/m (+0.4% y/y) in January. Research Group stated that asking prices fell three times this month; however interest to the British real estate sector is still preserved. Meanwhile, according to experts’ estimate, situation in the sector remains “complex” in 2012, as unemployment rate is increasing and impact from European problem is not waning.

Statistics released earlier showed that retail price index BRC in the UK increased by 1.7% m/m in December against the rise of 2.0% a month earlier. So, the index now fell to 16-month lows, largely due to Christmas sales, when retailers reduced prices. Prices declined by 0.1% on monthly basis.

It is worth noting that the Bank of England expects economic stagnation in Q4 2011 and GDP growth in Q1 2012. Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3.

 

[LF.Anastasia]

CHF: Activity in Swiss Franc is not fading away

At the Forex currency market Swiss Franc rate is traded upward on Thursday, continuing sustained trend.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, and continues to decline, volumes are decreasing, giving a sell signal. Stochastic Oscillator goes down in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9380, USD/CHF will go to 0.9370 and 0.9360. A chance is high that the pair will consolidate at the current levels.

The data showed in the middle of the week that investor economic expectations index ZEW was at the level of -50.1 points in January against -72 points a month before that. This is a positive signal indicating some stability in the country.

According to the data released in the end of December leading indicators index KOF fell to 0.01 points in December against the forecast of 0.23 points 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. It became known earlier that unemployment rate in Switzerland increased to 3.3% in December against expectations of 3.2% and the level of 3.1% in November. It became known the day before yesterday that producer prices index and import prices in Switzerland increased by 0.3%% m/m (-2.3% y/y) in December against the forecast of -0.1% m/m. The data is of interest; however we shall wait for January figures in order to draw up a conclusion.

Ax week ago Swiss authorities said that government does not have tools for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to doubt the Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after further discussion.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned last week. The name of successor is still unknown and it is also not clear if new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted that search for the candidate for SNB governor will take several months.

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. 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.

 

[LF.Anastasia]

JPY: Japanese Yen does not lose hope to grow

At the Forex currency market the Japanese Yen rate is traded upward, since external background makes it possible.

Forex forecast: MACD indicator for the pair USD/JPY continues to go down in the negative area; volumes are above average; which, all together, gives a sell signal. Stochastic Oscillator goes down slowly in the neutral zone, giving a weak sell signal.

Forex recommendations: in case of breakdown at the level of 76.50, the pair will go to 76.40 and 76.20. It is a high chance that the pair will consolidate at the current levels.

Japanese statistics demonstrates deceleration of economy: revised average wages in the country fell by 0.2% y/y in November against preliminary decline of 0.1%. The index was stable in October, so it is the first decline in two months.

Statistics released earlier showed that trade balance in Japan was at the level of -Y496.5 billion in December. In addition, bank lending increased by 0.5% y/y in December against the growth of 0.2% y/y in November.

Meanwhile, position of the government is more optimistic. Japanese authorities keep saying that local economy continues to grow, although suffers from sluggish exports. According to the economic estimates released today, state of economy remains unchanged in the Country of the Rising Sun; however export sector has been revised downward for the first time in three months: wording has been changed to: “weakening” from previous “stable”, largely due to the growth of JPY and delays of shipments to Thailand.

The head of the Bank of Japan Mr. Shirakawa said yesterday that economic recovery in the Country of the Rising Sun has suspended and situation in Europe represents the most dangerous risk for the economy. Local companies have no problems with credits currently; however the situation can become more complicated due to external influence.

It is also worth noting that according to the Bank of Japan, 7 out of 9 regions of the country downgraded assessments of economic situation in comparison with the state of affairs in October. Only in two regions assessments remained unchanged.

Minutes of the last meeting of the Bank of Japan released earlier, stated that it is necessary to trace back the effect of the recent soft policy; potential impact from the expensive Yen also causes special concern.

Mr. Shirakawa, the head of the Bank of Japan 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.

 

[LF.Anastasia]

AUD: Australian Dollar became frustrated with statistics

At the Forex currency market the Australian Dollar rate goes down on Thursday in response to macro-statistics.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, giving a buy signal. Stochastic Oscillator is traded slightly upward in the neutral zone and maintains a signal for inactive purchase.

Forex recommendations: in case of breakdown at the level of 1.0400, the pair will go to 1.0410 и 1.0430.

Statistics released this morning showed that employment rate in November fell by 7.6 thousand against initial estimate of -6.3 thousand. At the same time, unemployment rate remained at the previous level of 5.3%. We would remind that economists expected the rise of jobs by 10 thousand. The index clearly reflects the impact of the European debt crisis on Australian economy.

According to the estimates of the government, last 12 months were the worst for the labour market over the last 20 years, as the sector has been waekening starting from the last six month of 2011.

Statistics released earlier showed that mortgage lending in Australia increased by 1.4% m/m in November against the growth of 0.8% in October. Number of permits to construct increased by 8.4% m/m (-10.0% y/y). The rise of 7% had been predicted. Retail sales showed zero change in November against the growth of 0.2% m/m in October.

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. According to the data released earlier, business activity index AiG in the service sector of Australia increased to 49.0 points in November against the level of 47.7 points in October. In addition, trade balance amounted to +А$1.38 billion in November against expectations of +А$2.0 billion.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to grow

At the Forex currency market the Canadian Dollar rate continues to grow moderately on Thursday for the fourth consecutive session.

Forex forecast: MACD indicator for the pair USD/CAD has shifted to sideways movement in the negative area and is not giving a clear signal. Stochastic Oscillator descended into oversold zone and maintains a sell signal.

Forex recommendations: in case of rebound from 1.0100, the pair will go to 1.0090 and 1.0070. There is a high chance that the pair will consolidate at the current levels.

The Bank of Canada kept interest rate at the level of 1.0% per annum and the market was not surprised.

The head of the Bank Mr. Carney said in his speech yesterday that debts of the households began to worry the regulator, as this can cause reduction in GDP in the long term. Carney also noted that the balance of the Canadian companies is positive in general; however impact of European recession, which might last until Q4 this year, is detrimental.

According to the updated estimates of the Bank of Canada, GDP in the country will amount to 3.1% in Q1, 2013; inflation will reduce to 1.5% in Q2 this year. At the same time, interest rate can go up during all 2013 in the moderate pace, while decline in mortgage rates will encourage boost in the volumes of lending to households.

Statistics showed that sales of new cars in Canada reduced by 1.0% in November, to 137.640 thousand, smoothing over the rise achieved over the few previous months. It became known earlier that house price index in Canada rose by 0.3% in November against the growth of 0.2% in October and expectations of the same level.

CPI in Canada increased by 0.1% m/m (+2.9% y/y) in November which agreed with the forecast. The growth is within the ball park, which meets with expectations and does not involve risk for the economy.

According to the data released last week, unemployment rate rose to 7.5% in December against the forecast of 7.4%, employment rate increased by 175 thousand versus expectations of growth of 15 thousand. Thus, invariably negative pattern in the Canadian employment market, which took shape in the last six months of 2011, still persists

GDP in Canada rose by 3.5% y/y in Q3 against revised decline of 0.5% in April-June. Economists predicted growth of the index of 3%.

 

[LF.Anastasia]

EUR/USD: Euro has chances to continue ascend

The pair EUR/USD is traded steadily at the Forex currency market on Friday morning, maintaining ascending trend of this week.

By 9.00 MSK the Euro is at 1.2961 against yesterday’s closing level of 1.2966.

Positive sentiment in the pair is being maintained by anticipation of favourable outcome of negotiations between Greece and private capital which resumed in the mid-week. Parties are discussing now compromise coupon rates on the bonds, this issue was one of many that became a stumbling stone in the previous round of talks.

It is possible that investors will start profit taking for the pair in the afternoon.

Most likely the pair EUR/USD will not go beyond the range of 1.2880-1.3010 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is ready to continue its growth

At the Forex currency market the British Pound Sterling rate is traded upward on Friday continuing ascending trend that has been lasting for nearly all week.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area, it has shifted to sideways from downward movement, volumes are decreasing, indicator does not give a clear signal. Stochastic Oscillator has come into overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at 1.5495, the pair will go to 1.5510 and 1.5530. Profit taking is very likely to take place before the weekend.

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

Interest in risk maintains ascending channel for GBP; however it seems more like successful correction after mass sales in earlier in January.

Statistics released yesterday showed that consumer confidence Nationwide in the UK reduced to 38 points in December against the level of 40 points in November. It seems that the latest data has smoothed over the rise achieved in November, although it has not been unexpected. The end of 2011 was not simple for the British consumers, which is reflected in statistics.

Meanwhile, unemployment continues to thrive in Britain. Unemployment rate rose to 8.4% in November against the forecast of 8.3%, the level of unemployed rate increased by 118 thousand for three months against +128 thousand for the previous three months, as per estimates.

Statistics released earlier showed that retail price index BRC in the UK increased by 1.7% m/m in December against the rise of 2.0% a month earlier. So, the index now fell to 16-month lows, largely due to Christmas sales, when retailers reduced prices. Prices declined by 0.1% on monthly basis. According to the data released previously, house prices Rightmove in the UK dropped by 0.8% m/m (+0.4% y/y) in January. Research Group stated that asking prices fell three times this month; however interest to the British real estate sector is still preserved. Meanwhile, according to experts’ estimate, situation in the sector remains “complex” in 2012, as unemployment rate is increasing and impact from European problem is not waning.

It is worth noting that the Bank of England expects economic stagnation in Q4 2011 and GDP growth in Q1 2012. Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3.

 

[LF.Anastasia]

CHF: Swiss Franc persistently goes up

At the Forex currency market Swiss Franc rate continues to grow on Friday, it has been the forth full-grown session of the rise in CHF, amid positive external background.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it declines, while volumes are decreasing, and is giving a sell signal. Stochastic Oscillator continues to goes down in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9300, USD/CHF will go to 0.9290 and 0.9280. A chance is high that the pair will consolidate at the current levels.

Meanwhile, interest in Franc is still at the high level. Probably, the fact that SNB does not have full-fledged governor also matters.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned last week. The name of successor is still unknown and it is also not clear if new governor of the Bank will adhere to the same policy as his colleague in monetary issues. Swiss government noted that search for the candidate for SNB governor will take several months.

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. 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.

Ax week ago Swiss authorities said that government does not have tools for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to doubt the Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after further discussion.

The data showed in the middle of the week that investor economic expectations index ZEW was at the level of -50.1 points in January against -72 points a month before that. This is a positive signal indicating some stability in the country.

Leading indicators index KOF fell to 0.01 points in December against the forecast of 0.23 points 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. It became known earlier that unemployment rate in Switzerland increased to 3.3% in December against expectations of 3.2% and the level of 3.1% in November. It became known the day before yesterday that producer prices index and import prices in Switzerland increased by 0.3%% m/m (-2.3% y/y) in December against the forecast of -0.1% m/m. The data is of interest; however we shall wait for January figures in order to draw up a conclusion.

 

[LF.Anastasia]

JPY: Japanese Yen decided to retreat

At the Forex currency market the Japanese Yen rate retreats on Friday under pressure from USD.

Forex forecast: MACD indicator for the pair USD/JPY moves sideways in the negative area; volumes are above average and does not give a clear signal. Stochastic Oscillator is going up in the neutral zone, giving a weak sell signal.

Forex recommendations: in case of breakdown at the level of 77.20, the pair will go to 77.40 and 77.50. A chance is high that the pair will consolidate at the current levels.

Publication Nikkei, said at the end of the week that budget deficit in Japan will be above 17 trillion yen in 2015, which is 3.5% of GDP of the country even if government raise tax on consumption. Officially Japan plans to reduce budget deficit to 3.2% of GDP in 2015 in order to reduce the index twice versus to 2010.

Next Tuesday, on 24 January Japanese authorities are ready to issue new updated forecast.

Japanese statistics demonstrates deceleration in economy: revised average wages in the country fell by 0.2% y/y in November against preliminary decline of 0.1%. The index was stable in October, so it is the first decline in two months.

Statistics released earlier showed that trade balance in Japan was at the level of -Y496.5 billion in December. In addition, bank lending increased by 0.5% y/y in December against the growth of 0.2% y/y in November.

The head of the Bank of Japan Mr. Shirakawa said earlier this week that economic recovery in the Country of the Rising Sun has suspended and situation in Europe represents the most dangerous risk for the economy. Local companies have no problems with credits currently; however the situation can become more complicated due to external influence.

It is also worth noting, that according to the Bank of Japan, 7 out of 9 regions of the country downgraded assessments of economic situation versus the value in October. Only in two regions assessments remained unchanged.