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[LF.Anastasia]

NZD: New Zealand Dollar consolidates at highs

At the Forex currency market the New Zealand Dollar is traded slightly downward, amid low activity in the market.

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 0.8360. Rapid movement is not expected today.

Macro-economic situation in New Zealand is stable today.

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.

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, but revived later. Most likely the index will be weaker in Q4. 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.

 

[LF.Anastasia]

EUR/USD: Euro moved down due to outstanding Greek issue

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

By 9.25 MSK the Euro is at 1.3084 against closing level of 1.3145 on Friday.

Investors are frustrated with the lack of dynamics in the talks between Greece and creditors. There has not been any factual outcome of discussions with private capital about writing off part of the debt.

In addition, auction of France will take place at the beginning of the week. The country is ready of offer to the market government bonds for the amount of 8.5 billion euro. Any boom of negative factors will enable yield growth, which will adversely affect general sentiments of players.

Meanwhile, the market is still focused on the Greek issue.

Most likely, the pair EUR/USD will not go beyond the range of 1.3025-1.3120 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound Sterling started this week with a drawdown

At the Forex currency market the British Pound Sterling rate is traded downward at the Forex currency market on Monday in response to “wait and see” sentiments in the market at the beginning of the week.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 1.5760, the pair will go to 1.5750 and 1.5730. A chance is high that the pair will consolidate at the current levels.

A regular meeting of the Bank of England will take place this week; probably comments from MPC will be slightly more aggressive, since it is clearly expected that the Bank shall respond to slowdown of British economy

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.

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. It became known earlier 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.

 

[LF.Anastasia]

CHF: Swiss Franc continues to retreat

At the Forex currency market Swiss Franc rate continues to move away slowly from the local highs on Monday. On the one hand, investors adopted “wait and see’ attitude due to unresolved Greek issue, on the other hand, intervention from SNB is not excluded.

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: in case of breakdown at 0.9230, USD/CHF will go to 0.9240 and 0.9260. Consolidation near current levels is possible.

Players are waiting publication on the currency reserve volume in Switzerland in January ( in December the index amounted to 254.2 billion).

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.

Lack of comments or actions from SNB, connected with previous rapid of Franc causes alarm. 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.
Dantin said that, decline in the rate of Franc is possible in perspective, as 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.

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.

 

[LF.Anastasia]

JPY: Japanese Yen waits for opportunity to resume growth

At the Forex currency market the Japanese Yen rate is traded downward on Monday, following the trend of Friday. However, market does not shrug off probability that JPY might resume its growth in the coming 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 is going up in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 76.70, the pair will go to к 76.85 and 76.90. Consolidation near the current levels is not excluded.

It seems that political vacuum has been created in Japan; the head of the Bank of Japan Mr. Shirakawa noted this morning that master politicians are required to fight effectively both against expensive Yen and deflation.

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.

Unemployment rate rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed fell by 100 thousand against 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%.

Monetary politician Mr. Azumi stressed earlier 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.

 

[LF.Anastasia]

AUD: Australian Dollar is waiting for catalysts

At the Forex currency market the Australian Dollar rate is traded downward on Monday, due to sluggish activity in the market caused by wait and see attitude of investors.

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 remains in the 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 highly possible.

Statistics showed today that retail sales decreased by 0.1% m/m in December against the forecast of 0.2%. The AUD had made use of statistics and then stood still in uncertainty again: the currency has a potential for growth which is being held back now due to wait and see attitude in the market caused by Greek issue.

According to statistics released earlier, activity index in the manufacturing sector rose by 1.4% in January, up to 51.6 points, as per AI GROUP estimates. 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.

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.

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. Unemployment rate fell by 7.6 thousand in November against initial assessment 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 suspended its rise

At the Forex currency market the New Zealand Dollar suspended its rise on Monday and is slightly going down. The NZD has reached local highs at the end of last week and is now waiting for the new driver to continue ascending trend.

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 0.8320, the pair will go to 0.8330 and 0.8350. Consolidation near current levels is probable.

Judging by volumes of positions, growth of New Zealand Dollar has not yet been completed. However, a new impetus is definitely required for the pair in order to go upward.

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, but revived later. Most likely the index will be weaker in Q4. At the meeting in the end of January, 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.

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 last week.

 

[LF.Anastasia]

EUR/USD: Euro is waiting for decisions on Greece

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

By 8.45 MSK the Euro is at 1.3108 against yesterday’s closing level of 1.3120.

Lack of decision on Greek issues puts pressure on Investors and affects interest to purchases. Obscure macroeconomic background does not provide support to the market either; therefore players are kept in suspense.

Not much news is scheduled for the release today; therefore external background will remain the main driver for the market.

Most likely, the pair EUR/USD will not go beyond the range of 1.3050-1.3150 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound has not determined sales trends

At the Forex currency market the British Pound Sterling rate is traded slightly downward on Tuesday maintaining in the five-day range.

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; it is going up slightly and is giving a buy signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 1.5760 the pair GBP/USD will go to 1.5750 and 1.5730. A chance is high that the pair will consolidate at the current levels.

Market is in suspense, major currencies almost do not move because anticipations among investors who track developments in Greece.

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.

It became known earlier that consumer confidence index GfK rose up 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. A regular meeting of the Bank of England will take place this week; probably comments from MPC will be slightly more aggressive, since it is clearly expected that the Bank shall respond to slowdown of British economy. 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 is minimal

At the Forex currency market Swiss Franc rate does not demonstrate any signs of vitality on Tuesday; investors are kept in suspense due to European negotiations with Greece.

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 is going up in the neutral zone, giving an antipodal signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 0.9200, the pair USD/CHF will go to 0.9210 and 0.9230. Consolidation near current levels is possible.

Marco-economic situation in Switzerland has not changed much today.

The fact that SNB does not offer any comments or actions, related to previous rapid growth of Franc, causes alarm. 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.

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. Therefore, 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. 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.

Representative of SNB Mr. Dantin said earlier that, decline in the rate of Franc is possible in perspective, as 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.