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[LF.Anastasia]

NZD: New Zealand Dollar remains at local highs

At the Forex currency market the New Zealand rate is traded upward on Friday, keeping positions close to the local highs.

Forex forecast: MACD indicator for the pair NZD/USD is going up in the positive area and is giving a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8250, the pair will go to 0.8260 and 0.8270. Conditions for correction have been created.

It became known today that trade balance in New Zealand amounted to +NZ$338 million in December against the value of -NZ$307 million in November. This statistics became an excellent support for the rate of the NZD.

At the meeting of the Reserve Bank of New Zealand, which ended yesterday, it was decided to leave interest rate at the minimal level of 2.5% per annum. According to follow-up comments of the regulator this decision is reasonable because world economic risks are still preserved despite internal stability in New Zealand. RBNZ emphasized that inflationary pressure is being steadily contained; however NZD growth negatively affects earnings of exporters.

In addition, economy of New Zealand demonstrates signs of weak recovery in the housing market and consumer spending.

Thus, Europe and its problems have a strong impact on Australian economy, as well as on other remote counties; forecasts are too difficult to make.

Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier. 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 waiting for Greek decisions

The pair EUR/USD is traded downward at the Forex currency market on Monday.

By 8.15 MSK the Euro is at 1.3177 against closing level of 1.3218 on Friday.

Investors are making use of the news from rating agency Fitch, which downgraded sovereign ratings of five European countries- Cyprus, Italy, Spain, Slovenia and Belgium at the end of last week. Rating of Ireland remained at the previous level, forecast for all ratings is “negative”.

At the same time, Greek issues are still unsettled. Although monetary politicians of different levels tried to give players a hope that the problem with the coupon rate for new bonds of the country and a number of technical details are about to be resolved, solution has not been yet made public.

Therefore, markets still maintain in suspense about Greece.

Most likely, the pair EUR/USD will not go beyond the range of 1.3110-1.3250 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound does not see guidelines at the beginning of the week

At the Forex currency market the British Pound Sterling rate is traded downward on Monday in response to obscure external background.

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

Forex recommendations: in case of breakdown at 1.5720, the pair will go to 1.5730 and 1.5760. Correction is possible.

Situation in Great Britain remains generally unchanged in terms of macro-statistics.

Unemployment continues to thrive in Britain. According to estimates, unemployment rate rose to 8.4% in November against the forecast of 8.3%, level of unemployed increased by 118 thousand over three months against +128 thousand in the previous three months. Similar situation is in the retail sector as well. Buyers failed to keep retailers happy in January: following the rise in volumes of sales in December, retail sale fell by 22% in January against +9 in December. This has been the lowest value since March 2009. Outlook in the retail sector is not too optimistic. Thus, companies in this sector can go to three-year lows again in February, as volumes of orders have declined once again.

British Prime Minister Cameron believes that as long as EU authorities do not take energetic measures to implement anti-crisis program, there is no point to raise the issue of increasing reserves of IMF. Therefore, Britain maintains tough stance in regards to the debt situation in Eurozone. Cameron thinks that Germany shall act faster and with more confidence.

The head of the Bank of England Mr. King, believes that expected decline in inflation assumes possibility of additional QE; however, rates will likely remain at the current levels. King emphasized that recovery of the British economy will be slow and jerky. He also said that terms of lending are detrimental to economic recovery. At the same time the Bank of England is ready to provide liquidity to banks if a need will be.

Representative of the Bank of England Mr. Posen said earlier that he still adheres to “dove-like” attitude to monetary policy in the country. Thus, he believes that inflation pressure is decreasing rapidly and economic growth is increasing, although in a slow pace. Decision on QE will be adopted at the meeting in February, now members of MPC are discussing possibility of increasing volumes of assets purchase. Posen stressed that this is not yet sufficient to stabilize situation in British economy.

 

[LF.Anastasia]

CHF: Swiss Franc started this week with correction

At the Forex currency Swiss Franc rate is traded downward on Monday as part of technical correction following nearly a week of steady growth.

Forex forecast: MACD indicator for the pair USD/CHF is declining in the positive area, and is ready to go through the signal line from top to bottom, maintaining a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9150, USD/CHF will go to к 0.9140 and 0.9120.

Swiss Minister of Economic affairs noted on Friday, that second half of this year is going to be better than the first one, Swiss economy is stable enough to survive mild recession. Naturally, it will affect the economic growth rate in the country: slow growth rate of GDP is expected in 2012.

The politician also stressed that SNB has high creditworthiness.

Representative of SNB Mr. Dantin said earlier, that, lowering of Franc rate is possible in perspective, because measures to restrict its growth are going to be introduced. He once again outlined well-known positions of SNB about possibility of unlimited purchases of foreign currency in order to keep Franc in permissible price limits.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned at the beginning of January. The name of successor is still unknown and it is also not clear if a 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.

Earlier, Swiss government indicated intention to revise policy of supervision over SNB activity. A week ago Swiss authorities said that government does not have instruments for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to cast doubts on Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after additional discussion.

It became known earlier that index of leading indicators KOF fell by 17% in January against the forecast of decline of 10%. This is the consequence of expensive currency, and this only increases possibility of another currency intervention against CHF. In January, investors’ economic expectations index ZEW was at the level of -50.1 points against -72 points a month earlier. 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. 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. The index is positive; however it is based on the efforts of the local regulator to curb the rate of the Franc.

 

[LF.Anastasia]

JPY: Japanese Yen tends to continue growth

At the Forex currency market the Japanese Yen rate is traded upward on Monday, continuing Friday’s trend.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and started to go up, while volumes are low, giving a weak buy signal. Stochastic Oscillator goes down in the neutral zone, giving a sell signal and approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to к 76.50 and 76.30. Consolidation near the current levels is possible.

For the first ten days of January trade balance in Japan amounted to -Y916.2 billion, according to the data released this morning. Volume of export was at the level of -20.7% y/y, import rose by 24.3% y/y. It became known earlier that trade deficit has been recorded in Japan for the first time in 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen). It seems that Japanese economy has been deprived of one of the main supportive tools - its exports.

It became known today that retail sales increased by 2.5% y/y in December against decline of 2.2% in November. These findings are extremely interesting because they demonstrate that, despite significant slump in economy, retail sales can be in favourable position. The latest data was the strongest one over the last six months; apparently, consumers’ optimism and appetite for buying is back again.

We cannot disregard the fact that, due to continuing decline of export levels and losses in the manufacturing sector, income of Japanese people will decrease as well, and this will inevitable affect retail sector.

Deflation still preserves in the country: net consumer prices fell by 0.1% in December; this has been the third consecutive fall in the index. Factors are the same: rising Yen, decline in global demand and prices for imports. According to official forecasts Japan is going to reduce budget deficit by 3.2% of GDP by 2015 in order to reduce the index twice compared to the level of 2010.

Officially Japan plans to reduce budget deficit to 3.2% of GDP by 2015 in order to reduce the index twice versus the level in 2010. Edition of Nikkei noted on Friday that budget deficit in Japan will be above 17 trillion yen in 2015, which will be 3.5% of country’s GDP, even if government raises tax on consumption.

 

[LF.Anastasia]

AUD: Australian Dollar started this week with sales

At the Forex currency market the Australian Dollar rate is traded downward on Monday, due to Chinese news and rumors.

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, while volumes are high and is giving a buy signal. Stochastic Oscillator tends to go out of the overbought zone and is ready to shape a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0600, the pair will go to 1.0620 and 1.0640.

Chinese trading floors were closed last week; however there have been rumours on Monday morning that China will postpone reduction in reserve requirements for banks. This news upset the AUD.

It became known today that rating agency Fitch put rating of Australian banks CBA, NAB, Westpac ND ANZ for review with the forecast negative. This fact is unfavourable for the AUD.

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. 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 government’s estimate, last 12 months were the worst for the labour market over the last 20 years, as the sector has been weakening since the last six month of 2011

The data released yesterday was mixed. Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis.

The report is interesting: core inflation rose to 2.6% in the previous quarter, exceeding average target of RBA by 2-3%. Market believes that probability is 50% now, that at the next meeting the Bank of Japan will reduce interest rate to 4%. At the end of last year, in November and December, the RBA reduced the rate twice.
Leading indicators index CB in Australia decreased by 0.3% in November against the fall of 0.6% earlier. Import price index increased by 2.5% q/q in Q4 against zero change in Q3.

 

[LF.Anastasia]

NZD: New Zealand Dollar started this week in the “red” zone

At the Forex currency market the New Zealand rate is traded downward on Monday because of interest to risk among the players went down.

Forex forecast: MACD indicator for the pair NZD/USD is going up in the positive area and is giving a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8200, the pair will go to 0.8210 and 0.8230. Conditions for correction have been created.

Statistics released on Monday showed that activity index in the service sector of New Zealand fell to 50.6 points (-5.6 points) in December. Trade balance amounted to +NZ$338 billion in December against the level of -NZ$307 billion in November. However, positive factor of the index has already been incorporated into the price.

Consumer confidence index ANZ fell to 108.4 points in December against 109.0 points earlier.

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.

At the meeting of the Reserve Bank of New Zealand, which ended yesterday, it was decided to leave interest rate at the minimal level of 2.5% per annum. According to follow-up comments of the regulator this decision is reasonable because world economic risks are still preserved despite internal stability in New Zealand. RBNZ emphasized that inflationary pressure is being steadily contained; however NZD growth negatively affects earnings of exporters. In addition, economy of New Zealand demonstrates signs of weak recovery in the housing market and consumer spending. Thus, Europe and its problems have a strong impact on Australian economy, as well as on other remote counties; forecasts are too difficult to make.

 

[LF.Anastasia]

EUR/USD: Euro has found a motive to grow

The pair EUR/USD is traded in the black at the Forex currency market on Tuesday morning.

By 9.25 MSK the Euro is at 1.3186 against yesterday’s closing level of 1.3128.

There were a number of reasons for the positive sentiment in the market: first of all Greek Prime Minister gave to understand that some progress has been achieved in the course of negotiations between private capital and Greece; secondly, a good piece of news came from the EU summit in Brussels where the launch of ESM Fund has been approved.

Therefore, new fund will be operational from 1 July 2012, a year earlier than it has been planned, its volume will amount to 500 billion euro and 80 billion euro of equity. At the same time, politicians do not rule out a chance that ESM can be expanded in the future.

In general, positive sentiment is coming back in the market.

Most likely, the pair EUR/USD will not go beyond the range of 1.3120-1.3230 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound remains within three- day trading range

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Tuesday, still staying in the three-day trading range of 1.5640-1.5740.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is going up while volumes are increasing; it is giving a buy signal and is prepared to break signal line from bottom to top. Stochastic Oscillator remains in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 1.5735, the pair will go to 1.5740 and 1.5760.

It became known today that consumer confidence index GfK rose to -29 points in January against the level of -33 points in December. This is the record index since summer 2011 and is definitely very positive.

British Prime Minister Cameron believes that as long as EU authorities do not take energetic measures to implement anti-crisis program, there is no point to raise the issue of increasing IMF reserves. Therefore, Britain maintains tough stance in regards to the debt situation in Eurozone. Cameron thinks that Germany shall act faster and with more confidence.

According to the head of the Bank of England Mr. King, decline in inflation assumes possibility of additional QE; however, rates will likely remain at the current levels. King emphasized that recovery of the British economy will be slow and jerky. He also said that terms of lending are detrimental to economic recovery. At the same time the Bank of England is ready to provide liquidity to banks if a need will be.

Unemployment continues to thrive in Britain. According to estimates, unemployment rate rose to 8.4% in November against the forecast of 8.3%, level of unemployed increased by 118 thousand over three months against +128 thousand in the previous three months. Similar situation is in the retail sector as well. Buyers failed to keep retailers happy in January: following the rise in volumes of sales in December, retail sale fell by 22% in January against +9 in December. This has been the lowest value since March 2009. Outlook in the retail sector is not too optimistic. Thus, companies in this sector can go to three-year lows again in February, as volumes of orders have declined once again.

 

[LF.Anastasia]

CHF: Swiss Franc remains near local highs

At the Forex currency Swiss Franc rate still remains near local highs on Tuesday despite SNB’s firm stance against the currency exchange rate.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from top to bottom and is now in the negative area, giving a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9140, USD/CHF will go to к 0.9130 and 0.9110.

Swiss Franc growth shall not leave SNB unfazed; yesterday, for example, investors into the pair EUR/SHF had come close to important level of 1.20, which is now maximum permissible in the pair. Later on the pair moved away from important level; however a chance of retest is still preserved.

SNB did not give any comments yet.

Last week, representative of SNB Mr. Dantin said that, in perspective lowering of Franc rate is possible because measures to restrict its growth are going to be introduced. He once again outlined well-known positions of SNB about possibility of unlimited purchases of foreign currency in order to keep Franc in permissible price limits.

Swiss Minister of Economic affairs noted on Friday, that second half of this year is going to be better than the first one, Swiss economy is stable enough to survive mild recession. Naturally, it will affect the economic growth rate in the country: slow growth rate of GDP is expected in 2012. The politician also stressed that SNB has high creditworthiness.

We would remind that the head of Swiss National Bank Phillip Hildebrand resigned at the beginning of January. The name of successor is still unknown and it is also not clear if a 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.

Earlier, Swiss government indicated intention to revise policy of supervision over SNB activity. A week ago Swiss authorities said that government does not have instruments for direct influence on SNB. Representatives of the Finance Ministry of the country stated that politicians have no ground to cast doubts on Bank’s strategies; however the issue with Hildebrand requires special consideration. Ministry also stressed that new head of SNB will be appointed only after additional discussion. It became known earlier that index of leading indicators KOF fell by 17% in January against the forecast of decline of 10%. This is the consequence of expensive currency, and this only increases possibility of another currency intervention against CHF. In January, investors’ economic expectations index ZEW was at the level of -50.1 points against -72 points a month earlier. 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.