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[LF.Anastasia]

GBP: British Pound tends to continue strengthening

At the Forex currency market the British Pound Sterling rate is traded upward on Thursday, willing to keep on strengthening.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from bottom to top and came into the positive area; however trades are sluggish and along the line; there is no a clear signal. Stochastic Oscillator came back into overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at 1.5840, the pair will go to 1.5850 and 1.5870. A chance is high that the pair will consolidate at the current levels.

Realty in Britain is decreasing in price, according to Nationwide report, prices went down by 0.2% m/m in January, the decrease lasts for the second consecutive month. Although the data agreed with the forecast of economists, this fact is not very cheering. Thus, inflation in prices for houses in the country is really slowing down.

We shall not fail to take into consideration that sharp changes in sentiments are obvious in the housing sector. This sector can show sideways trend in the coming months

Presently, mixed sentiments in the market prevents the Pound to go upward, as investors questioned vital capacity of Greece, as well as lack of reasons for recessions in Eurozone. According to British Prime Minister Cameron, 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. 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. 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.

Complex situation preserves in the labour sector. 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.

 

[LF.Anastasia]

CHF: Swiss Franc is undetermined again

At the Forex currency market Swiss Franc rate almost stands still in the trades on Thursday.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 0.9170, USD/CHF will go to 0.9190 and 0.9230. If upward breakdown does not take place, the pair will aim at 0.9110.

According to statistics released today, Swiss economy is getting weaker: Trade surplus amounted to CHF2.0 billion in December against the level of CHF2.945 billion in November.

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.

It became known earlier that Swiss consumption indicator UBS rose to 0.92 points in December against preliminary expectations of 0.78 points. Theoretically, the fact that the index is successfully recovering can be an indication that previously it has reached its bottom and now there is no threat of serious slump. In the nearest future a moderate increase in consumer sentiments can be predicted. Domestic consumption shall receive energetic support, as inflow of labour power can become a positive outcome of this. 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 earlier that search for the candidate for SNB governor will take several months. Swiss government indicated intention to revise policy of supervision over SNB activity.

Swiss Minister of Economic affairs believes 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.

 

[LF.Anastasia]

JPY: Japanese Yen slowed down growth rate

At the Forex currency market the Japanese Yen rate remains strong today, however activity in the currency has declined. Apparently, players expect intervention of the Bank of Japan caused by rapid strengthening of the JPY in the last few days.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it started to go down and is giving a sell signal. Stochastic Oscillator has come into oversold zone, and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.10, the pair will go to к 76.05 and 75.80. Consolidation near the current levels is possible.

Most likely another round of strengthening in JPY will cause a flow of comments from monetary authorities of the country. This is probably the factor that restrains activity of the players in the pair USD/JPY. Today, monetary politician Mr. Azumi stressed that if the need be, the Bank of Japan will take decisive and timely measures. Apparently, the time for this has not come yet.

It became known today that unemployment rate in Japan rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed decreased by 100 thousand against the growth of 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country. Wages in Japan continue to decline; the data in December showed decline of 0.2% y/y, the same as in November. Therefore, Japanese wages have been declining for 8 months out of 12.

Some other positive data was more positive – preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

At the same time, we cannot disregard the fact 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. Currently, economic stimulus programs for the total amount of 20 trillion yen, are being implemented in Japan. They were designed to increase demand and finalize work to eliminate aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

 

[LF.Anastasia]

AUD: Australian Dollar does not lose chances to grow

At the Forex currency market the Australian Dollar rate is traded slightly upward on Thursday; however mixed sentiments in the market prevented the AUD from further strengthening. Yesterday’s Chinese statistics was of great support

Forex forecast: MACD indicator for the pair AUD/USD is going up in the positive area, while volumes are high, which gives a buy signal. Stochastic Oscillator has come back to overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0720, the pair will go to 1.0730 and 1.0750. Correction is possible.

According to Australian monetary politician Mr. Swan, strong Australian Dollar represents real threat to the local exporters and their income. Note that today the rate of the pair AUD/USD has reached the highs of August 2011.

Statistics released today showed that activity index in the manufacturing sector of Australia rose by 1.4% in January, to 51.6 points, as per AI GROUP estimates.

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. Meanwhile, private sector lending rose by 0.3% in December, the same as in November. Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. Parts of report are 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.

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.

 

[LF.Anastasia]

NZD: New Zealand Dollar is on firm ground

Positions of the New Zealand Dollar are still stable at the Forex currency market – the currency is on the firm ground considering that it has again reached the highs of September.

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 0.8340, the pair will go to 0.8350 and 0.8370. Consolidation near the current levels is not excluded.

According to the report of the Reserve Bank of New Zealand, the regulator is ready to act if conditions, appropriate for his intervention will be created. In case if the slump of 2008 will be repeated, the RBNZ has a number of measures to avoid the slump of economy in the global scale.

It is all about the level of liquidity in the banks.

The document was submitted to authorities in December, however the contents of it have been made public only now.

At the meeting last week, the Reserve Bank of New Zealand 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.

Statistics released earlier this week 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. Therefore, Europe and its problems have a strong impact on Australian economy, as well as on other remote counties; forecasts are too difficult to make. 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: Situation remained unchanged for USD

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

By 8.25 MSK the Euro is at 1.3129 against yesterday’s closing level of 1.3144.

So, there have not been any new drivers in the market, while investors have already made use of the existing ones and incorporated them into prices. Players are getting bored: Greece continues to delay the progress of negotiations with private capital, changing the deadline for taking decisions and European leaders refrain from making comments.

The data on the U.S. employment sector, which is going to be released tonight, will be of interest- despite the fact that ADP index did not agree with the forecasts, investors hope that the data will be strong.

Most likely, the pair EUR/USD will not go beyond the range of 1.3090-1.3180 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is quiet on Friday

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Friday; however activity in the pair is low.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from bottom to top and came into the positive area; however trades are sluggish and along the line; there is no a clear signal. Stochastic Oscillator came out of the overbought zone and started to give a sell signal.

Forex recommendations: in case of breakdown at 1.5810, the pair will go to 1.5800 and 1.5780. A chance is high that the pair will consolidate at the current levels.

According to estimates of the National Institute of Economic Research NIESR, British economy will lose 0.1% this year; however in 2013 will resume its growth up to 2.3%. Situation with the households, that have a lot of debts and are not willing to spend money because of obscure economic outlooks, acts as a “hindrance” for the system. In addition, labor market also of importance, the Institute predicts that unemployment rate in 2012 will be over 9%. There is probability that inflation will drop to 2.2% from the current 4%, CPI can be at 1.4% in 2013.

We would remind that complex situation preserves in the labour sector. 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. Situation is similar In the retail sector as well.

Realty in Britain is decreasing in price, according to Nationwide report, prices went down by 0.2% m/m in January, the decrease lasts for the second consecutive month. Although the data agreed with the forecast of economists, this fact is not very cheering. Thus, inflation in prices for houses in the country is really slowing down. We shall not fail to take into consideration that sharp changes in sentiments are obvious in the housing sector. This sector can show sideways trend in the coming months

It became known yesterday 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. 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.

 

[LF.Anastasia]

CHF: Activity in Swiss Franc went down at the end of the week

At the Forex currency market Swiss Franc rate has been traded slightly downward on Friday for the second consecutive day. Today, activity in the pair has not increased either. Apparently, market has already run out of all drivers for movement.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 0.9180, USD/CHF will go to 0.9190 and 0.9230. If upward breakdown does not take place, the pair will aim at 0.9110.

There have not been many changes in Swiss economy on Friday. However, lack of comments or actions from SNB, connected with previous rapid of Franc, causes alarm.

According to statistics released earlier, Swiss economy is getting weaker: Trade surplus amounted to CHF2.0 billion in December against the level of CHF2.945 billion in November. It became known earlier that Swiss consumption indicator UBS rose to 0.92 points in December against preliminary expectations of 0.78 points. Theoretically, the fact that the index is successfully recovering can be an indication that previously it has reached its bottom and now there is no threat of serious slump. In the nearest future a moderate increase in consumer sentiments can be predicted. Domestic consumption shall receive energetic support, as inflow of labour power can become a positive outcome of this. 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 earlier 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.

Swiss Minister of Economic affairs believes 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. 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.

 

[LF.Anastasia]

JPY: Japanese Yen almost stands still

At the Forex currency market the Japanese Yen rate is stable at the end of the week, there is almost no activity in the pair, as new drivers in the market did not turn up; Central Bank did not take actions either.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it started to go down and is giving a sell signal. Stochastic Oscillator has come into the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.10, the pair will go to к 76.05 and 75.80. Consolidation near the current levels is possible, as well as correction.

Another round of strengthening in JPY will cause a flow of comments from monetary authorities of the country. This is probably the factor that restrains activity of the players in the pair USD/JPY. Today, monetary politician Mr. Azumi stressed that if the need be, the Bank of Japan will take decisive and timely measures. Apparently, the time for this has not come yet. Players have heard these comments since the last unilateral intervention, which was not successful; however it seems unlikely that infusions to Japanese market can become attractive for Europe and USA.

At the same time, we cannot disregard the fact 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. Currently, economic stimulus programs for the total amount of 20 trillion yen, are being implemented in Japan. They were designed to increase demand and finalize work to eliminate aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

It became known this week that unemployment rate in Japan rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed decreased by 100 thousand against the growth of 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country. Wages in Japan continue to decline; the data in December showed decline of 0.2% y/y, the same as in November. Therefore, Japanese wages have been declining for 8 months out of 12. Some other positive data was more positive – preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

 

[LF.Anastasia]

AUD: Australian Dollar is at ease at the end of the week

At the Forex currency market the Australian Dollar rate is traded smoothly with no deviations to either direction.

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 has come back to the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0700, the pair will go to 1.0710 and 1.0730. . Correction is highly possible.

Data released this morning showed that aggregate activity index Aig in the service sector increased to 51.9 points in January (+2.9 points) against growth of 1.3 points a month earlier. The index has been growing for the third month in a row, while major growth in activity is related to households.

Nevertheless, AiG noted in the comments that revival in the index took place only in three out of nine components of the index. Statistics released today showed that activity index in the manufacturing sector of Australia rose by 1.4% in January, to 51.6 points, as per AI GROUP estimates.

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. Meanwhile, private sector lending rose by 0.3% in December, the same as in November. Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. 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. According to Australian monetary politician Mr. Swan, strong Australian Dollar represents real threat to the local exporters and their income. Note that today the rate of the pair AUD/USD has reached the highs of August 2011.