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[LF.Anastasia]

NZD: New Zealand Dollar goes down

At the Forex currency market the New Zealand Dollar rate goes down on Friday, the trend of sluggish trading has lasted for the third consecutive day already.

Forex forecast: MACD indicator for the pair NZD/USD is going up in the positive area and is giving a buy signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8290, the pair will go to 0.8270 and 0.8250.

Macro-economic situation in New Zealand has not changed much in the last 24 hours.

It seems that market is going to take profits on long positions in high-yielding currencies, since it is doubtful that short- term active growth will be continued.

It became known yesterday that unemployment rate fell to 6.3% in Q4 2011 against the level of 6.6% a quarter earlier. This is positive information indicating that, employment sector, being one of the supportive factors for the economy, will be able to guarantee stability even in case of pessimistic external influence.

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.

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.

 

[LF.Anastasia]

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[LF.Anastasia]

EUR/USD: EURO MAKES USE OF GREEK NEWS
The pair EUR/USD is traded slightly upward at the forex currency market on Monday morning after Friday's correction.
By 8.50 Moscow time the Euro is at 1.3252against closing level of 1.3171 on Friday.
Investors respond positively to the news that Greek Parliament has approved all austerity policies, specified by Europe once again. Adoption of these measures is the main requirement for receiving second package of financial aid, without which Greece will not be able to pay off debts before 20 March.
It seems that market's attention will be focused on developments in Athens today.
Most likely, the pair EUR/USD will not go beyond in the range of 1.3150-1.3290 at the trading session on Monday.

 

[LF.Anastasia]

GBP: BRITISH POUND IS NOT SURE OF MARKET’S SUPPORT
The British Pound Sterling is traded slightly upward at the Forex currency market on Monday, as market positively assessed Greek news, however it is not quite sure of future prospects.
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 moving along the signal line now and is not giving a clear signal. Stochastic Oscillator is going further down in the neutral zone and is giving a sell signal.
Forex recommendations: in case of breakdown at 1.5780, the pair GBP/USD will go to 1.5760 and 1.5740. Consolidation near current levels is possible.
According to the data released last week, volume of output in construction sector fell by 0.5% on quarterly basis (+0.9%y/y) in December against preliminary growth expectations of 0.2%.
Authorities have already reacted to statistics and stated that the index is not the reason to revise GDP data in the country.
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.
A meeting of the Bank of England was held yesterday: asset repurchase program was increased by 50 billion pounds, up to325 billion pounds, as expected. Mr. Osborn said commenting this decision that the increase of QE will help achieve inflation target (official target is 2%and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE.
According to MPC estimates, economic activity in the country went down slightly in Q4 2011, however recent studies showed a positive picture. MPC believe that volume of industrial output will gradual lyincrease in 2012 and recovery in household income will help economic growth. Another important factor is reduction of CP as it will boost demand. However, tough lending conditions and cost-saving measures can be an obstacle. Unemployment will restrain inflationary pressure. QE program is designed for 3months. The head of the Bank of England Mr. King emphasized earlier 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: SWISS FRANC IS APPROACHING LOCAL HIGHS ONCE AGAIN
At the Forex currency market Swiss Franc has resumed its growth at the beginning of the week, once again approaching local highs.
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 came out of the neutral zone; apparently it tends to come back there again and is prepared to give a sell 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.
According to the previous data, inflation in Switzerland fell by 0.4% m/m (_0.8% y/y) in January against expectations of decline of 0.2% m/m. This is the fourth consecutive drop in the index and at the same time the maximum fall since October 2009. Expensive Yen seriously hampers economy: at the beginning of the year import of consumer goods fell by1.8% m/m (_3.2% y/y), however the goods of Swiss production rose in price by0.1% m/m.
Therefore, threat of inflation is becoming evident for Switzerland
A lot of questions have risen because of the fact that Swiss National Bank has not reacted to the rise in Franc's price has risen. Statistics released earlier showed that consumer confidence in the country increased to -19 points in January, against the level of -24 points in December and the forecast of -22 points, as per SECO estimates.
Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain 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.
It became know earlier 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. Representative of SNB Mr. Dantin said earlier that, decline in the rate of Franc is possible in perspective, as measures to restrict its grow thare 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 IS IN DOUBT AGAIN
At the Forex currency market the Japanese Yen rate is traded with slight deviation on Monday, being close to Friday's levels. Market sentiment is mixed; therefore it is not clear yet when market's attention will be drawn to the Yen as "safe habour currency"
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it is going upward, while volumes are low, and is giving a moderate buy signal. Stochastic Oscillator has come into overbought zone and maintains a buy signal.
Forex recommendations: in case of breakdown at the level of 77.70, the pair will go to 77.85 and 78.10. Consolidation near the current levels is not excluded.
The data released this morning showed that GDP in Japan fell by 2.3% y/y in Q4 2011, as European crisis and global slowdown in economic rate prevented recovery after natural disaster. Therefore, pressure on the Bank of Japan, which intends to hold a meeting on Tuesday, is growing. New measures to support economy are expected from the regulator.
The reasons for the slump in GDP in the Country of the Rising Sun are obvious: decline in global consumption and aftermaths of earthquake and tsunami, as well as the flood in Thailand.
It is quite possible that Japanese economy will rise by 1.4-1.6% this quarter and will be able to demonstrate growth of1.7% at the end of the year. IMF gave similar estimates.
The head of the Bank of Japan Mr. Shirakawa said earlier that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy. Market has heard suchal legations for several months already; however the Yen steps back for neither monetary nor natural reason. Investors have lost interest in currencies -"safe" har bours, and appetite to risk is visible to unaided eye.
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.

 

[LF.Anastasia]

ROUBLE IS GROWING AGAIN IN PAIRING WITH USD
With the start of the trading session in the currency section of the MICEX, the Russian Rouble rate is growing again in pairing with the USD under the influence fromthe external background where investors favourably respond to Greek news.
The trading session for the USD started at the level of 29.88 roubles, which is 20 kopeks less than closing level on Friday , the EUR started at the level of39.65 roubles, almost unchanged.
Dual currency basket value amounted to 34.3 roubles today, (-10 kopeks).
Therefore,the Rouble makes use of the rise in EUR/USD at Forex and overall positive sentiment in the market.
Presumably the pair USD/Rouble will be in the channel of 29.80-29.99 Roubles for USD at the trading session on Monday.

 

[LF.Anastasia]

AUD: AUSTRALIAN DOLLAR IS READY TO GROW PROVIDED THAT THE DRIVERIS AVAILABLE
At the Forex currency market the Australian Dollar rate is growing at a moderate pace on Monday, while market is assessing external background and Greek information. In case a driver will be available, the AUD is ready to continue its steady grow.
Forex forecast: MACD indicator for the pair AUD/USD is in the positive area, volumes are high, however, it is moving along the signal line at the moment, not giving a clear signal. Stochastic Oscillator is going down in the neutral zone, giving a signal for moderate sales.
Forex recommendations: in case of breakdown at the level of 1.0750, the pair will go to 1.0760 and 1.0790. The pair still looks rather overbought.
The data released this morning showed that lending in the housing sector of Australia rose by 2.4% in December against the forecast of growth of 1.8*. Statistics supported the currency.
At the regular meeting last week, 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.
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 growth by 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.

 

[LF.Anastasia]

EUR/USD: EURO HAS FOUND A NEW CAUSE FOR OPTIMISM
The pair EUR/USD is traded upward at the Forex currency market on Wednesday morning.
By 9.55 Moscow time the Euro is at 1.3178 against yesterday's closing level of 1.3120.
The ground for buying major pair was declaration from China about will ingness to support Europe by participating in buying sovereign bonds through the channels of European Central bank or viavarious subsidiary funds.
Market's reaction to this news was very optimistic, despite the fact that it has not been the first promise from China while real steps have not been made
Investors put aside Greek issues for a while, Euro group has postponed today's meeting devoted to the second aidpackage to Athens in order to see actual outcome of Greek promises.
Therefore, external background is very eventful today.
Most likely, the pair EUR/USD will not gobeyond in the range of 1.3100-1.3250 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: BRITISH POUND BEGAN TO GROW
The British Pound Sterling rate is traded upward at the Forex currency market on Wednesday in response to market optimism.
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 moving along the signal line now and is not giving a clear signal. Stochastic Oscillator tends to go out of the oversold zone, to where it had slipped down yesterday, and is giving a buy signal today.
Forex recommendations: in case of breakdown at 1.5730, the pair GBP/USD will go to 1.5740 and 1.5750. Consolidation near current levels is possible.
The Pound is pushed up by market optimism based on the news that China is ready to help Europe, which outweighed negative news from Greece. The data released on Tuesday was quite good. CPI fell by 0.5% m/m (+3.6% y/y) in January against the level of +4.2% y/y in December.
Yesterday, rating agency Moody's announced that forecast for the UK rating was downgraded to "negative", however existing rating was left at the previous highest level of AAA. The Pound became agitated by this news: rating agencies used to stay away from Great Britain. However, it is becoming more evident now that even tough opposition to European problems will not be able to protect Britain from negative impact.
According to the data released last week, output volume in construction sector fell by 0.5% on quarterly basis (+0.9% y/y) in December against preliminary growth expectations of 0.2%. Authorities have already reacted to statistics and stated that the index is not the cause for revising GDP in the country. At the meeting last week the Bank of England increased asset repurchase program by 50 billion pounds, up to 325 billion pounds, as expected. Mr. Osborn stated commenting this decision that the increase of QE will help achieve inflation target (official target is 2% and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE.