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[LF.Anastasia]

JPY: Japanese Yen reluctantly gives way to USD

At the Forex currency market the Japanese Yen rate is traded downward on Tuesday, giving way to American currency. At the same time, trading volumes are low, which indicates preservation of pending sentiments in the market.

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: off the market.

Feasible event scenario at Forex: 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.

The data released in the morning showed that leading indicator index in Japan increased by 0.6% m/m in December against expectations of growth of 0.7%. Preliminary index of coincident indicators rose more rapidly for the same period by 2.9% m/m (forecast: +2.4% m/m).

However, the JPY continues to ignore statistics.

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%.

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 against both expensive Yen and deflation.

Meanwhile, domestic situation in the Country of the Rising Sun is complex. The fact that cannot be disregarded is 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]

NZD: New Zealand Dollar demonstrates moderate optimism

At the Forex currency market the New Zealand Dollar is traded with profit, as it copies positive sentiment of its Australian counterpart.

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. Consolidation near current levels is probable.

Judging by volumes in positions, growth of New Zealand Dollar has not yet been completed. Today the NZD received a new impetus –that is a positive trend of AUD, which responds to stable monetary policy of RBA.

In other respects economic situation in New Zealand remains unchanged.

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.

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.

 

[LF.Anastasia]

AUD: Australian Dollar has found support in RBA positions

At the Forex currency market the Australian Dollar rate is traded upward on Tuesday, due to decisions made by the Reserve Bank of Australia and positive comments made by the regulator.

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 1.0820, the pair will go to 1.0830 and 1.0850. Correction is highly possible.

So, at the meeting today, the Reserve Bank of Australia decided to keep interest rate at the level of 4.25% per annum, while market predicted downward revision of the index by 25 basis points.

According to comments made by RBA, domestic economy is stable and resists external negative pressure from Europe quite well. The head of RBA Mr. Stevens believes that situation in the European economy has slightly improved since December, although sentiments remain very pessimistic.

It is logical that the regulator does not abandon possibility of lowering the rate: Stevens noted that the cost of lending can be revised downward if conditions require so.

The AUD reacted instantly, soaring up to six month highs,

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

Retail sales fell by 0.1% m/m in December against the forecast of 0.2%. 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.

 

[LF.Anastasia]

EUR/USD: Euro stands still in anticipation again

The pair EUR/USD is traded slightly downward at the Forex currency market on Wednesday morning after yesterday’s rise.

By 8.50 MSK the Euro is at 1.3244 against closing level of 1.3251on Tuesday.

The rise in the major pair last night was based purely on speculative factors, as there have not been fundamental grounds for the rise in the Euro: Greek issue is still unresolved, released German statistics was quite weak.

So far, there are still quite a lot of opened positions in the pair EUR/USD currently, due to expectations of the decisions on Greece; however it is a short-term trend which will not be able to change general direction of downward movement in the medium-term.

This afternoon, activity in the major pair can go down, in advance of the ECB meeting which will be held tomorrow.

Most likely, the pair EUR/USD will not go beyond the range of 1.3120-1.3255 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound tends to grow

At the Forex currency market the British Pound Sterling rate is traded upward on Wednesday, continuing yesterday’s rise.

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 and is giving a buy signal. Stochastic Oscillator started to go up again and is giving a similar signal.

Forex recommendations: in case of breakdown at 1.5910, the pair will go to 1.5920 and 1.5950. A chance is high that the pair will consolidate at the current levels.

The Pound is guided by general sentiment of investors who expect prompt resolution of the Greek issue. In addition, the players have significantly reduced short positions in Euro/USD, due to their anticipations and the Pound is just going upward caught up in the movement of the major pair, and has reached the highs of this year already.

A meeting of the Bank of England will be held on Thursday, it is quite possible that comments of the MPC will be a little aggressive, as reaction to slowdown in British economy is expected from the Bank. 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 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.

 

[LF.Anastasia]

CHF: Swiss Franc is going up due to external positive factors

At the Forex currency market Swiss Franc rate is goes upward in the middle of the week, infused by the general positive sentiments of players in the world capital markets. Anticipation that acute Greek issue will be resolved soon, contributes to rapid rise in CHF.

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 down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at 0.9110, the pair USD/CHF will go to 0.9100 and 0.9080. Consolidation near current levels is possible.

It became know today that unemployment rate in Switzerland amounted to 3.4% in January against the forecast of 3.5% and the previous value of 3.3%. This is the highest level of the index since last spring and quite negative indication in the state of affairs in the national economy.

Monetary politician Mr. Jordan said yesterday that SNB is firmly determined to protect the level of 1.20 in the pair Euro/Franc and is prepared to adopt additional measures if economic situation will require.

He also confirmed that economic growth rate has slowed down in Switzerland this year, although there is no risk of rise in inflation. He believes that Franc is still too strong and reduction in its price is necessary.

Swiss economists said earlier 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.

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.

 

[LF.Anastasia]

JPY: Japanese Yen continues to step back

At the Forex currency market the Japanese Yen rate is traded downward in the middle of the week, continuing to give way to American dollar.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it started to go down, while volumes are average, and is giving a sell signal. Stochastic Oscillator goes up in the neutral zone, giving a buy signal and has come closely to the overbought zone.

Forex recommendations: in case of breakdown at the level of 77.20, the pair will go to 77.35 and 77.50. Consolidation near the current levels is not excluded.

A block of Japanese statistics was released today: thus, bank lending rose by 0.7% y/y in January against the forecast of +0.5% y/y; current account balance amounted to Y303.5 billion in December against expectations of Y340.1 billion.

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%.

Meanwhile, domestic situation in the Country of the Rising Sun is complex. The fact that cannot be disregarded is 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 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 against both expensive Yen and deflation.

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 is bursting to go further up

At the Forex currency market the Australian Dollar rate continues to grow steadily today, supported by positive external background.

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 1.0830, the pair will go to 1.0840 and 1.0860. The pair looks overbought.

Meanwhile, Australian monetary politician Mr. Swan believes that currently, strong rate of the Australian Dollar represents real threat to local exporters and their incomes. Note that the day before yesterday the rate of the pair AUD/USD has reached the highs of August 2011.

Retail sales fell by 0.1% m/m in December against the forecast of 0.2%. 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.

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. At the meeting which was held yesterday, the Reserve Bank of Australia decided to keep interest rate at the level of 4.25% per annum, while market predicted downward revision of the index by 25 basis points.

According to comments made by RBA, domestic economy is stable and resists external negative pressure from Europe quite well. The head of RBA Mr. Stevens believes that situation in the European economy has slightly improved since December, although sentiments remain very pessimistic. It is logical that the regulator does not abandon possibility of lowering the rate: Stevens noted that the cost of lending can be revised downward if conditions require so. The AUD reacted instantly, soaring up to six month highs.

 

[LF.Anastasia]

CAD: Canadian Dollar receives support from external positive environment

At the Forex currency market the Canadian Dollar rate is traded slightly upward, due to sustained stability in the external environment.

Forex forecast: MACD indicator for the pair USD/CAD is sliding down in the negative area and is giving a sell signal. Stochastic Oscillator is going down in the neutral zone as well, and is giving a similar signal.

Forex recommendations: case of breakdown at 0.9930, the pair will go to 0.9920 and 0.9900.

As a raw currency, the Canadian Dollar get support from oil prices; this winter is very cold in Europe, which helped to increase demand for energy supply. Interest to risky currencies is still quite high.

The data released earlier showed that leading indicators index in Canada rose by 0.8% m/m in December against the forecast of +0.6% m/m. Latest statistics showed that CPI in Canada fell by 0.6% m/m (+2.3% y/y) in December against the forecast of -0.1% m/m. Despite this obvious fact, the data requires some clarification. Annual growth of CPI has been minimal since February 2011, and inflation reduced due to decline in prices for gasoline and other fuel.

Therefore, basing on the current inflationary situation, the Bank of Canada can keep inflation at the existing level for some more time with no damage for its monetary policy.

At the same time, according to the forecast of the Bank of Canada, inflation will slow down to +1.5% on annual basis in April-June.

According to the data released earlier, real GDP in Canada fell by 0.1% m/m (+2.0% y/y) in November against expectations of growth of 0.2% m/m.

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 in the moderate pace during all the year of 2013, while decline in mortgage rates will encourage boost in the volumes of lending to households. We would remind that, in the middle of January, the Bank of Canada left interest rate at the level of 1.0% per annum, which did not become a surprise for the market.

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%. The data showed that sales increased by 0.2% in the manufacturing sector of Canada against expectations of 1.2%, the main driver of the growth was general rise in the sector and improvement in some of its sections: such as industrial equipment sector, for example. Number of new orders in the sector rose by 3.7% in November, stocks in the warehouses: by 0.4%.

 

[LF.Anastasia]

EUR/USD: Euro is ready to test a figure 33 again

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

By 9.15 Moscow time the euro is at 1.3272 against yesterday’s closing level of 1.3257.

Investors continue to vest hopes on negotiations between Greece and private capital, however market does not particular believe any more in assertion about achieving consensus in the earliest possible date

Currencies received support from Chinese morning news showing that inflation was higher than expected; however the data on PPI in January looks optimistic.

A meeting of the European Central Bank and the Bank of England are going to be held this afternoon, therefore, activity in the pairs can go down in the afternoon.

Most likely, the pair EUR/USD will be in the range of 1.3150-1.3310 at the trading session on Thursday.