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[LF.Anastasia]

AUD: AUSTRALIAN DOLLAR REMAINS UNDER PRESSURE
At the Forex currency market the Australian Dollar rate has slightly increased at trades in the middle of the week, after the decline this morning.

Forex forecast: MACD indicator for the pair AUD/USD is in the positive area, it started to go down and is shaping a sell signal. Stochastic Oscillator goes down in the neutral zone andis giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0670, the pair will go to 1.0660 and 1.0640.

According to released statistics,index of wages rise has increased by 1.0% on quarterly basis in Q4 against the previous growth of 0.7%. Growth amounted to 3.6% on annual basis.

Minutes of the last meeting ofthe Reserve Bank of Australia, which were released yesterday, were neutral. The document said that the threat of disorderly default in Greece represents the major downward risk and current monetary policy conforms to macro-economic expectations. Issue of rate level has not been considered. GDP growth seems tobe close to two-year trend.

Statistics released earlier 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.Inflation in the country showed zero growth in Q4 against the forecast of growth of 0.4% on quarterly basis. 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, upto 51.6 points, as per AI GROUP estimates. Aggregate activity index Aig in theservice sector increased to 51.9 points in January (+2.9 points) against growthof 1.3 points a month earlier. The index has been growing for the third monthin a row, while major growth in activity is associated with households.Nevertheless, AiG noted in the comments, that revival in the index is evidentonly in three out of nine components.

Statistics released last week was positive: unemployment rate in Australia fell to 5.1% in January against 5.2% in December and the forecast of 5.3%. However, according to RBA deputy head,the rise in unemployment rate is not excluded in the coming months due to external influence. He also noted that the rise in investments and high rate ofthe national currency have beneficial effect on the economy. Consumer confidence index Westpac increased to 101.1 points in February against the level of 97.1 points in January, which is a good signal.

 

[LF.Anastasia]

JPY: JAPANESE YEN IS STILL ACTIVELY SOLD OUT
At the Forex currency market the Japanese Yen rate continues to be traded downward in the middle of the week.

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

Forex recommendations: in case of breakdown 80.05, the pair will go to 80.10 and 80.30.

According to the daily graphs, investors still tend to sell the Yen. At the same time, technical rebound for the pair USD/JPY is not excluded, after which the pair will resume its growth.

Such weak positions, when the JPY fell to 3.5- month lows can be explained by prior statements of the Bank of Japan. At the meeting this week, the Bank of Japan left interest rate at the level of 0.1% per annum; however the Bank has made a step, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as the other one: program of purchases of long-term bonds was expanded to Y19 trillion from Y9 trillion. In addition, Central Bank surprised market again, by stating that according to the bank it will be reasonable to set inflation target at 1%,as economic forecasts are extremely hazy.

It was Bank's opinion on the CPI target that forced the market to revise trading strategies for the Yen.

Earlier, trade deficit has been recorded in Japan for the first time in the last 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).

Sharp measures of the Central Bank are just a continued reaction to statistics: GDP in Japan fell by 2.3% y/yin Q4 2011, since European crisis and slowdown in the world economic rate have prevented recovery after natural disaster.

Japan will come out of a recession with the help of support from China. Representatives of Japanese Ministry of Economic Affairs said on Tuesday that Beijing and Tokyo are going to work in cooperation and pursue efforts to fight against sovereign debt of Europe. At the same time Finance Ministry noted that Japan shall apply more efforts to cope with its own debt problems.

 

[LF.Anastasia]

CHF: TRADING VOLUME FOR SWISS FRANC IS MINIMAL
At the Forex currency market Swiss Franc rate is moving with slight deviation on Wednesday, due to external uncertainty.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area and started to go up slowly, while volumes are average, 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 0.9110, the pair USD/CHF will go to 0.9090 and 0.9070.Otherwise, 0.9175 will become movement target.

It became known yesterday that trade balance in Switzerland amounted to -1.553 billion francs in January against the forecast of -2.50 billion francs.

The report showed that exports decreased by 3.4% last month against preliminary estimate of growth of 6.1%;imports increased by 3.6% (preliminary forecast: +7.6% m/m).

The data is not too positive, since levels of exports are in the red again.

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 it is maximal fall since October 2009. Expensive Yen seriously hampers the progress of economy: at the beginning of the year import of consumer goods fell by 1.8% m/m (-3.2% y/y), however the goods of Swiss production rose in price by 0.1% m/m. Therefore, inflation threat is becoming more tangible in Switzerland. It became known earlier that index of economic expectations ZEW rose to -21.2 points in February against the level of -50.1points in January. Most likely it is the reflection of monetary efforts of SNB. Unemployment rate in the country amounted to 3.4% in January against the forecast of 3.5% and previous value of 3.3%. This is the highest level of the index since last spring indicating unfavourable situation in the national economy. Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in the pair Euro/Franc. The Bank is prepared to adopt additional measures if economic situation requires. He also confirmed that economic growth rate slowed down this year in Switzerland, although there is no risk of the rise in inflation. He believes that Franc is still too strong and reduction in its price is urgently required.

Minister of Economic Affairs of Switzerland acknowledged yesterday that Franc is overvalued, however presently this fact does not alarm government, since, according to the Minister, the country has learnt to live under the conditions of some volatility. Forecasts of the government remain unchanged: it is expected that GDP in Switzerland will rise by 0.5% this year.

 

[LF.Anastasia]

GBP: BRITISH POUND HAS NOT DETERMINED MOVEMENT DIRECTION
The British Pound Sterling rate is traded slightly upward at the Forex currency market on Wednesday after sales last night.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it started to go down and is shaping a sell signal. Stochastic Oscillator has left overbought zone and is going down, giving a similar signal.

Forex recommendations: in case of breakdown at 1.5790 the pair GBP/USD will go to 1.5780 and 1.5750.

Representative of the Bank of England Mr. Bean said yesterday that economic growth should accelerate in the second half of the year and the rate of inflation will slowdown; while in the first 6 months of the year economic growth is slow. In general, Mr. Bean thinks that economic growth will recover gradually and will be moderate.

At the regular meeting in February, the Bank of England increased asset repurchase program by 50 billion pounds, to the level of 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.

According to Rightmove, house price index in the UK rose by 4.1% m/m (+1.4% y/y) in February against preliminary expectations of decline of 0.8% m/m. Thus, the index demonstrates maximum increase since April 2002 on monthly basis. The rise in price was triggered by small number of deals in the market and some easing of the lending conditions.

It became known earlier that consumer confidence Nationwide increased to 47 points in January against the level of 38 points in December. The report provides the following information: index of expenditure amounted to 78 points against previous 77 points; index of business expectations rose to 64 points versus 50 points earlier. Therefore, confidence of British consumers has recovered on the first month of the year from the record lows; nevertheless buyers remain cautious, especially in regards to large acquisitions. The data released earlier was quite good: CPI decreased by 0.5% m/m (+3.6% y/y) in January against the level of +4.2% y/y in December. According to the data released at the end of last week, volume of production in the construction sector declined by 0.5% on quarterly basis(+0.9% y/y) in December against preliminary expectations of growth of 0.2%.Authorities have already reacted to this statistics, stating that the index cannot be the basis for revising country's GDP.

 

[LF.Anastasia]

EUR/USD: EURO IS IN PERPLEXITY
The pair EUR/USD is traded downward at the Forex currency market on Wednesday morning.

By 8.45 Moscow time the Euro isat 1.3229 against yesterday's closing level of 1.3240.

Market continues to evaluateout come of Euro group decision, agreeing that adopted measures will probably not help to revive Eurozone or solve debt crisis problems.

American market does not provide information that will interfere with trades this week therefore, all attention is still focused on Eurozone.

Most likely, the pair EUR/USDwill not go beyond the range of 1.3150-1.3260 at the trading session on Wednesday.

 

[LF.Anastasia]

NZD: NEW ZEALAND DOLLAR IS TRADED SLUGGISHLY
At the Forex currency market the New Zealand Dollar rate is tradedsluggishly on Thursday in the absence of drivers in the market.

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

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

Due to lack of any interesting trading ideas the currency is traded in the narrow range.

Statistics was positive for the New Zealand currency on Monday: business activity index in the service sectorBNZ rose to 53.6 points in January against preliminary expectations of 50.9points. The report showed that growth has been recorded in 4 out of 5 components; however the main catalyst for the growth were the orders of new companies. Employment in the sector increased to 54.2 points which is themaximum since November 2007.

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. 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. Significantsupport to the economy of New Zealand was provided by Rugby Championship whichattracted 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 Zealandeconomy is actually in the state of stagnation. GDP had almoststopped growing, but revived later. Most likely the index will be weaker in Q4.Statistics released earlier showed that house priceindex REINZ fell by 1.4% m/m (+25.2% y/y) in January against preliminaryexpectations of decline of 0.1% m/m. Unemployment rate fell to 6.3% in Q4 2011against 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.

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.

 

[LF.Anastasia]

AUD: AUSTRALIAN DOLLAR STILL HAS NO SUPPORT
At the Forex currency market the Australian Dollar rate still have no support on Thursday, although it tries to regain after four days of sales.

Forex forecast: MACD indicator for the pair AUD/USD is in the positive area, it started to go down and is shaping a sell signal. Stochastic Oscillator goes down in the neutral zone andis giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0640, the pair will go to 1.0630 and 1.0610. Apparently, sales will increase in case of breakdown at 1.06.

Australian currency has been "knocked down" by domestic political news: investors discuss rumours that the head of Ministry of Foreign Affairs of Australia Mr. Radd will leave his post because of disagreements with Prime-Minister Julia Gillard. Usually the AUD takes political news quietly; however this information can work as drive for trading under dead calm conditions in the market.

According to released statistics,index of wages rise has increased by 1.0% on quarterly basis in Q4 against the previous growth of 0.7%. Growth amounted to 3.6% on annual basis. Statistics released earlier showed that lending in the housing sector of Australia rose by 2.4% in December against the forecast of growth of 1.8%. Statistics supportedthe currency. Inflation in the country showed zero growth in Q4 against theforecast of growth of 0.4% on quarterly basis. Retail sales fell by 0.1% m/m inDecember against the forecast of growth by 0.2%. According to statisticsreleased earlier, activity index in the manufacturing sector rose by 1.4% inJanuary, 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 associated with households. Nevertheless, AiG noted in the comments, that revival in the index is evidentonly in three out of nine component Statistics released last week was positive:unemployment rate in Australia fell to 5.1% in January against 5.2% in Decemberand the forecast of 5.3%. However, according to RBA deputy head, the rise inunemployment rate is not excluded in the coming months due to externalinfluence. He also noted that the rise in investments and high rate of the nationalcurrency have beneficial effect on the economy. Consumer confidence indexWestpac increased to 101.1 points in February against the level of 97.1 pointsin January, which is a good signal

Minutes of the last meeting of the Reserve Bank of Australia, which were released yesterday, were neutral. The document said that the threat of disorderly default in Greece represents the major downward risk and current monetary policy conforms to macro-economic expectations. Issue of rate level has not been considered. GDP growth seems tobe close to two-year trend.

 

[LF.Anastasia]

JPY: JAPANESE YEN IS BEING SLIGHTLY CORRECTED
At the Forex currency market the Japanese Yen rate is traded slightly upward at the Forex currency market on Thursday after significant decline which lasted for over one week.

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

Forex recommendations: in case of breakdown 80.20, the pair will go to 80.30 and 80.50. Most likely, correction in the JPY will be short run, after which it will continue to weaken.

Japanese Prime Minister Mr. Noda said on Thursday that the Bank shall implement its monetary policy more efficiently; measures adopted earlier this month were taken positively by the market and helped to release pressure on the Yen.

Such weak positions, when the JPY fell to 3.5-month lows can be explained by prior statements of the Bank ofJapan. At the meeting this week, the Bank of Japan left interest rate at thelevel of 0.1% per annum; however the Bank has made a step, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as theother one: program of purchases of long-term bonds was expanded to Y19 trillionfrom Y9 trillion. In addition, Central Bank surprised market again, by statingthat according to the bank it will be reasonable to set inflation target at 1%,as economic forecasts are extremely hazy.

It was Bank's opinion on the CPI target that forced the market to revise trading strategies for the Yen.

Strict measures of the Central Bank are just a continued reaction to statistics: GDP in Japan fell by 2.3% y/y in Q4 2011, since European crisis and slow down in the world economic ratehave prevented recovery after natural disaster.

Japan will come out of arecession with the help of support from China. Representatives of Japanese Ministry of Economic Affairs said on Tuesday that Beijing and Tokyo are going towork in cooperation and pursue efforts to fight against sovereign debt ofEurope. At the same time Finance Ministry noted that Japan shall apply more efforts to cope with its own debt problems.

 

[LF.Anastasia]

CHF: SWISS FRANC IS AT THE LOCAL HIGHS AGAIN
At the Forex currency market Swiss Franc rate demonstrated interest to local highs again on Thursday.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area and is moving along the signal line again not giving a clear signal. Stochastic Oscillator has gone to the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at 0.9080, the pair USD/CHF will go to 0.9070 and 0.9050.

Actually, new surge of strengthening in Franc took place with out intervene of the authorities. Minister of Economic Affairs of the country added more fuel to the fire yesterday saying that it would be logical to shift pegging of rate between Franc and Euro to 1.40 euro ( now it is 1.20). In his opinion, in this case EIR/CHF will be closer to purchasing power parity. In addition, the politician noted that SNB needs a new leader as soon as possible.

We would remind that SNB does not have a leader yet after resignation of Mr. Hildebrand in January.

Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in the pair Euro/Franc. The Bank is prepared to adopt additional measures if economic situation requires. He also confirmed that economic growth rate slowed down this year in Switzerland, although there is no risk of the rise in inflation. He believes that Franc is still too strong and reduction in its price is urgently required.

It became known yesterday that trade balance in Switzerland amounted to -1.553 billion francs in January against the forecast of -2.50 billion francs. The report showed that exports decreased by 3.4% last month against preliminary estimate of growth of 6.1%; imports increased by 3.6% (preliminary forecast: +7.6% m/m).The data is not too positive, since levels of exports are in the red again.

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 it is maximal fall since October 2009. Expensive Yens eriously hampers the progress of economy: at the beginning of the year import of consumer goods fell by 1.8% m/m (-3.2% y/y), however the goods of Swiss production rose in price by 0.1% m/m. Therefore, inflation threat is becoming more tangible in Switzerland. It became known earlier that index of economic expectations ZEW rose to -21.2 points in February against the level of -50.1points in January. Most likely it is the reflection of monetary efforts of SNB. Unemployment rate in the country amounted to 3.4% in January against the forecast of 3.5% and previous value of 3.3%. This is the highest level of the index since last spring indicating unfavourable situation in the national economy.

 

[LF.Anastasia]

GBP: BRITISH POUND DOES NOT RECEIVE SUPPORT
The British Pound Sterling rate is traded in black at the Forexcurrency market on Thursday, however it is still under pressure from sellers.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it is going down while volumes are decreasing and is giving a sell signal. Stochastic Oscillator goes down, and giving a similar signal.

Forex recommendations: in case of breakdown at 1.5660 the pair GBP/USD will go to 1.5650 and 1.5630.

Last night the Pound's goodmood was spoiled: the minutes of the last meeting of the Bank of England showed a split of opinions in the Monetary Committee. Two of its members, Posen andMiles voted for expansion of the assets repurchase program for 75 billion pounds, while other seven monetary politicians were for expansion of the volume of QE for 50 billion. All members of MPC were unanimous in regards to interestrate.

The minutes noted that some members of MPC had opinion that further stimulation shall be discontinued.

As a result, "hawks"are back again in the "dove-like" MPC.

We would remind that at the regular meeting in February, the Bank of England increased asset repurchase program by 50 billion pounds, to the level of 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 forabout 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.

Representative of the Bank of England Mr. Bean said yesterday that economic growth should accelerate in the second half of the year and the rate of inflation will slowdown; while in the first 6 months of the year economic growth is slow. In general, Mr. Bean thinks that economic growth will recover gradually and will be moderate. According to Rightmove, house price index in the UK rose by 4.1% m/m (+1.4% y/y) in February against preliminary expectations of decline of 0.8% m/m. Thus, the index demonstrates maximum increase since April 2002 on monthly basis. The rise inprice was triggered by small number of deals in the market and some easing of the lending conditions.