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[LF.Anastasia]

AUD: Australian Dollar is still undetermined

At the Forex currency market the Australian Dollar rate moderately decreases on Tuesday after the rise on Monday; however the pair AUD/USD is still in the risk zone due to Chinese statistics.

Forex forecast: MACD indicator for the pair AUD/USD went into negative area, breaking through the signal line from top to bottom and is going down, maintaining a sell signal. Stochastic Oscillator goes up in the neutral zone and is giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0520 the pair will aim to 1.0530 and 1.0550. In case of breakdown at 1.0500, sellers’ target will be the level of 1.0460.

A block of Chinese statistics, released this morning showed decline in the profits of industrial companies in January-February 2012, reducing to zero yesterday’s positive factors in the AUD.

So, despite interest in risk in the market, the AUD/USD is still under pressure from Chinese news and continues to respond to the ongoing slowdown in Chinese economy, which caused significant sales in the AUD last week. Oil to the fuel was added by the report of the Australian government on commodity market, which stated that export prices for energy resources (coal) will grow very slowly and this will put pressure on the currency. Indeed, there are all grounds to believe that demand for iron ore in China will slow down.

Inflation in Q4 showed zero growth in the country against the forecast of rise of 0.4% on quarterly basis. Retail sales fell by 0.1% m/m in December versus the forecast of growth of 0.2%. Statistics released earlier showed that unemployment rate amounted to 5.2% in January against 5.1% earlier. Number of employed reduced by 15.4 thousand against the forecast of growth of 5 thousand. Index of leading indicators WESTPAC rose by 0.6% m/m in January against revised growth of 0.7% m/m in December.

Earlier investors reacted negatively to the latest comments of the company BNR. Company’s management circulated press- release expressing dissatisfaction with the royalty taxation. The AUD traders were quick to close positions. This week is going to be quiet for the economy of Australia: country’s statistics will be released only on Friday; this will be the data on the volume of mortgage lending in February and lending rate of the private sector over the same period.

 

[LF.Anastasia]

CAD: Canadian Dollar is waiting for new drivers

At the Forex currency market the Canadian Dollar rate goes down slightly on Tuesday after yesterday’s sharp rise.

Forex forecast: MACD indicator for the pair USD/CAD goes up in the negative area and is giving a buy signal; volumes are low. Stochastic Oscillator goes down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at 0.9900 the pair will go to 0.9890 and 0.9870. Consolidation at the current levels is probable. Macro-economic situation in the Canadian economy is stable.

Yesterday’s rise in the CAD is explained by sharp decline in the interest to the USD after the speech of the U.S. FR chairman.

It became known earlier that inflation in Canada increased by 0.4% m/m (+2.6% y/y) in February against expectations of growth of 0.5% m/m. At the same time net CPI grew by 0.4% m/m as well. Prices for electric power and food became a catalyst for the rise in inflation levels.

According to the data released earlier economic growth in Canada slowed down in Q4: real GDP in Canada amounted to +0.4% m/m in December against the forecast of +0.4% m/m. In general Canadian economy grew by 0.4% in the last quarter last year against +1.0% in Q3, which was caused by strong external impact and decline in interest to energy resources in the world at the end of the year.

The head of the Bank of Canada Mr. Carney believes that current rates comply with monetary situation. Recall that in the middle of the January, the Bank of Canada kept interest rate at the level of 1.0% per annum, which was not a surprise for the market. The Bank of Canada expressed concern about the state of the housing sector; according to the regulator 10% decline in the sector can lead to reduction in consumption by 1% although the bulk of credits on property were used to finance consumption.

Current account balance in Canada amounted to –CAD$10.33 billion in Q4 against expectations of -CAD$9.6 billion. Prices for industrial goods in Canada rose by 0.3% in January against the forecast of growth of 0.1%. Oil prices became the main driver for growth. It became known last week that unemployment rate in Canada fell from 7.4% to 7.6% in February, number of jobs declined by 2.8 thousand.

 

[LF.Anastasia]

EUR/USD: Euro is traded smoothly in the middle of the week

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

By 8.50 Moscow time the Euro is at 1.3329 against yesterday’s closing level at 1.3312.

There are no new drivers to continue ascend in the major pair yet: American statistics released yesterday had come up to expectation; chairman of the U.S. Federal Reserve Ben Bernanke did not say anything fundamentally new in his speech on Tuesday.

President of FRB in New-York William Dudley said yesterday that Europe has reached considerable success in stabilizing economy in the region. There are still a lot to do; however some important phases have already been accomplished on the way to achieve long term financial stability.

Trading session today is going to be tranquil today. This afternoon investors will be interested in the publication of the U.S. data on orders for durable goods for February.

Most likely the pair EUR/USD will not go beyond the range of 1.3270-1.3370 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound hopes for further strengthening

At the Forex currency market the British Pound Sterling rate is traded slightly upward in the middle of the week.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it goes up and is giving a buy signal, while volume are increasing. Stochastic Oscillator is still in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.5960, the pair GBP/USD will go to 1.5970 and 1.6010. Consolidation is possible at the current levels.

It seems that main disputes in the Bank of England have shifted to the problem of QE and appropriateness of the program continuation. Now the head of the Regulator, Mervyn King noted that he is not so sure if further expansion of QE will be required. According to him, the Bank of England examines appropriateness of the repurchase program monthly basis.

Mr. Miles, representative of the Bank of England believes that the main essence of the assets repurchase program primarily is to achieve targeted inflation level, not to finance deficit in state budget and withdrawal from QE will completely depend on inflationary forecast. Miles also stressed yesterday that process of standardization of monetary policy will probably begin with the rise in rates.

FPC, a sub-division of the Bank of England, believes that all issues relating to financial stability of the UK are still highly uncertain. Problems of the European debts continue to put pressure on the British economy. However, measures of the ECB and especially auction LTRO had a positive effect on the banks of the country. At the same time the committee believes that the banks with more vulnerable financial structure should be more attentive to the problems of the European peripheral areas and in particular, to monitor sufficient level of capital.

According to statistics released last week retail sales in the UK fell by 0.8% m/m (+1.0% y/y) in February. At the same time sales, excluding fuel, decreased for the same amount last month; index in January was revised upward to +0.3% m/m. Apparently weak labour sector and high level of inflation continue to put pressure on the index of retails sales.

Unemployment rate was 5.0% in February, number of unemployed increased by 7.2 thousand. Weak employment sector prevents economic recovery of the country in general. Representative of British monetary authorities, Mr. Osborn believes that it will be possible to assess efficiency of the current budget only when all indices are summed up statistically. Then, it will be clear whether the budget contributes to economic growth or not. Osborn assured population of Great Britain that social programs, such as pensioners’ payments, will not be affected when a new budget will be adopted; however tax burden for the well-off people will be increased.

GDP investors will await publication of the final GDP in the UK for Q4 today.

 

[LF.Anastasia]

CHF: Swiss Franc is in the narrow range

At the Forex currency market Swiss Franc rate is traded slightly upward on Wednesday still staying in the channel 0.9015-0.9136.

Forex forecast: MACD indicator for the pair USD/CHF is changing direction again breaking through the signal line from top to bottom, giving again a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9030 the pair USD/CHF will go 0.9020 and 0.9000.

It became known yesterday that consumption indicator UBS in Switzerland fell to 0.87 points in February against preliminary level at 0.93 points.

Franc has ignored this information.

GDP in the country rose by 0.1% q/q (+1.3% y/y) in Q4 against the forecast of zero change (+1.1% y/y). This is the favourable data showing that Swiss economy is getting used to expensive Franc. The regulator expects that inflation in 2012-2014 will be in the range of 0.6% tо +0.6%; growth of GDP will be at the level of 1.0% this year.

Manufacturing sector is still weak in Switzerland; however it demonstrates the signs of recovery. Manufacturing activity index SVME increased to 49.0 points in February against the forecast of 48.5 points. Statistics released on Monday showed that real retail sales increased by 4.4% in January against the growth by 1.7% y/y in January.

Three- month Libor rate of Swiss National Bank remained unchanged at the level of 0%. In general, SNB’s position on monetary policy has remained unchanged.

Industrial output in manufacturing sector of Switzerland declined again in Q4 last year: volume of industrial output amounted to -1.4% y/y for the reporting period against the level of -1.9% in Q3. It became known earlier that imports increased by 0.7% y/y to the level of 14.04 billion francs in February, while exports rose only by 1.2% y/y (16.72 billion francs) last month. Balance of trade surplus amounted to 2.68 billion francs in February. It is the increase against previous level of 1.5 billion francs. According to the data released earlier, unemployment rate amounted to 3.4% in February- no changes.

Representative of Swiss Finance Ministry said on Monday that the rate of the pair EUR/CHF shall be pegging in the range of 1.35-1.40 but not at 1.20 as it is now. Finance Minister said in his interview to the local TV that he would welcome strengthening of the pair; however this matter is under control of SNB. Disagreement about the levels rates of the pair is natural: Mr. Dantin noted recently that the main objective of SNB is to maintain exchange rate of the pair EUR/CHF around the level of 1.20. In order to maintain current level and prevent dipping of the pair below this level, the regulator is ready to do all possible, including buying foreign currency unlimited quantities.

All seem fine and dandy, but readiness to curb the rise of Franc is demonstrated in word only, but not in deed; during the last few months after resignation of Hildebrand from the post of the head of SNB, the regulator almost ceased interventions.

 

[LF.Anastasia]

JPY: Japanese Yen goes away from the low trading range

At the Forex currency market the Japanese Yen rate remains in the low trading range of 81.97-84.09 on Wednesday.

Forex forecast: MACD indicator for the pair USD/JPY goes down in the positive area and is giving a sell signal. Stochastic Oscillator has pushed away from the oversold zone and is now increasing in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at 82.95 the pair USD/JPY will go to 83.00 and 83.20.

The head of the bank of Japan stressed once more that winning victory over deflation is extremely important for the country. Measures to stimulate growth are essential in the Country of the Rising Sun; however these actions and infusions of the CB will not be able to improve the situation.

Finance Minister of Japan Mr. Azumi said yesterday that the country is going to observe over the process of negotiations in Europe on establishment of the so-called protective barrier- the comment was made in response to expectations whether Japan would participate in the fight against European debt crisis through contribution to IMF.

Minutes of the February meeting of the Bank of Japan showed that some members of the Bank think that it would be expedient to establish threshold for inflation target at the level of 1-2%, while one vote was given for the target at 2%. The head of the Bank of Japan Mr. Shirakawa noted earlier that the regulator is going to keep on easing monetary policy until inflation reaches the target of 1%. Statistics released last week showed that trade balance in the Country of the Rising Sun amounted to -0.31 trillion yen in February against -0.49 trillion yen. This is a negative signal.

Representative of the Japanese Federation of Steel and Metal said at the end of last week, that the rate of the Yen is still quite high and Japanese currency should go down at least to the level 90.00, which will make economic recovery process much easier.

Statistics released earlier showed that real revised GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. In addition, current account balance amounted to -Y437.3 billion against the forecast of +Y322.3 billion; while private consumption increased by 0.4% q/q last quarter against the forecast of 0.3% q/q.

 

[LF.Anastasia]

AUD: Australian Dollar is on sale again

At the Forex currency market the Australian Dollar rate is going down again under pressure from sellers in the middle of the week.

Forex forecast: MACD indicator for the pair AUD/USD went into negative area, breaking through the signal line from top to bottom and is going down, maintaining a sell signal. Stochastic Oscillator is in the neutral zone moving along the signal line and not giving a clear signal.

Forex recommendations: in case of breakdown at the level of 1.0430 the pair will aim to 1.0420 and 1.0390.1

The Reserve Bank of Australia said this morning that funding problems can be preserved this year in the country, although access to funding has become simpler for many banks. The RBA emphasized separately that uncertainty in Europe and slow down in the global economy can significantly impact on Australian economy.

This news has not cheered up the AUD, which is on sale again.

Despite interest in risk in the market, the AUD/USD is still under pressure from Chinese news and continues to respond to the ongoing slowdown in Chinese economy, which caused significant sales in the AUD last week. Oil to the fuel was added by the report of the Australian government on commodity market, which stated that export prices for energy resources (coal) will grow very slowly and this will put pressure on the currency. Indeed, there are all grounds to believe that demand for iron ore in China will slow down.

Earlier investors reacted negatively to the latest comments of the company BNR. Company’s management circulated press- release expressing dissatisfaction with the royalty taxation. The AUD traders were quick to close positions. This week is going to be quiet for the economy of Australia: country’s statistics will be released only on Friday; this will be the data on the volume of mortgage lending in February and lending rate of the private sector over the same period.

Inflation in Q4 showed zero growth in the country against the forecast of rise of 0.4% on quarterly basis. Retail sales fell by 0.1% m/m in December versus the forecast of growth of 0.2%. Statistics released earlier showed that unemployment rate amounted to 5.2% in January against 5.1% earlier. Number of employed reduced by 15.4 thousand against the forecast of growth of 5 thousand. Index of leading indicators WESTPAC rose by 0.6% m/m in January against revised growth of 0.7% m/m in December.

 

[LF.Anastasia]

NZD: Buyers do not rush to come back to NZD

At the Forex currency market the New Zealand rate goes down in the middle of the week

Forex forecast: MACD indicator for the pair NZD/USD is moving along the signal line in the negative area and is not giving a clear signal. Stochastic Oscillator goes up in the neutral zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8200 the pair will go to 0.8210 and 0.8230. Consolidation near the current levels is possible.

Interest in high- yielding currencies is moderate in the market, largely due to ambiguous news backdrop from China, which mostly had affected NZD and NZD.

This week will be uneventful for the NZD in terms of macro-statistics.

Previous statistics showed that activity in the manufacturing industry of New Zealand increased by 1.3% in Q4 against the fall of 1.4% earlier. This data supported the currency.


Activity index in the service sector 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, this positive factor has already been incorporated into the price.

Statistics released last week showed that activity in the manufacturing sector of New Zealand increased by 1.3% in Q4 against the decline of 1.4% earlier. GDP in New Zealand increased by 0.8% q/q (+1.9% y/y) in Q3 against the forecast of +0.6% on quarterly basis. GDP in Q2 rose by 0.1% q/q (+1.5% y/y) versus the level of +0.9% q/q (+1.6% y/y) in Q1. Actually there is stagnation in the economy of New Zealand. GDP almost has stopped its growth however started to revive later. Most likely, the index will be weaker in Q4.

House price index REINZ fell by 1.4% m/m (+25.2% y/y) in January against preliminary expectations of decline of 0.1% m/m. Unemployment rate in the country dropped to 6.3% in Q4 2011 against the level of 6.6% a quarter earlier. The data is positive and indicates that employment sector as one of the main supportive factors for the economy can guarantee stability even in case of external pessimistic impact.

According to the data released earlier, export prices in New Zealand rose by 1.7% q/q in Q4 against -4.0% in Q3. Import prices increased by 3.2% on quarterly basis for the reporting period against previous decline of 3.4%.

In addition, the Reserve Bank of New Zealand left interest rate unchanged at the level of 2.5% as expected. RBNZ noted in the comments that there is no point to revise interest rate at the moment.

 

[LF.Anastasia]

EUR/USD: Euro got stuck in the range

At the Forex currency market trading in the pair EUR/USD is sluggish on Thursday morning within narrow corridor.

By 8.45 Moscow time the Euro is at 1.3320 against yesterday’s closing level at 1.3316.

The major pair still fails to go out of the stable channel of 1.3300-1.3380 and even weak US statistics was not able to knock it out of the range.

Today investors will be interested in the data on the U.S. GDP for Q4 last year; it is expected that the index will rise by 3% y/y. The market got used to positive American statistics very quickly and is geared up for positive sentiment. At the same time labour market data for last week will become known.

Europe continues to discuss possibility of expanding anti-crisis funds; however it is still just a discussion but not a prerequisite to real actions.

Most likely the pair EUR/USD will not go beyond the range of 1.3270-1.3380 at the trading session on Thursday.

 

[LF.Anastasia]

GBP: Trade is fluctuant for British Pound

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Thursday after yesterday’s sales. In general the currency is still in a rather precarious position.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it goes up and is giving a buy signal, while volume are increasing. Stochastic Oscillator has come out of the overbought zone and started to shape a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5910, the pair GBP/USD will go to 1.5920 and 1.5940.1. Consolidation is possible at the current levels.

The data released yesterday showed that GDP in the UK fell by 0.3% on quarterly basis in Q4 (+0.5% y/y), economists expected a less significant decline of 0.2% q/q.

Current account balance in the UK was at the level of –stg8.451 billion in Q4 versus the forecast of -stg8.4 billion; while volume of consumer expenses rose only by 0.4% on quarterly basis at the end of the year 2011 (+0.5% q/q a quarter earlier).

The released data frustrated investors.

FPC, a sub-division of the Bank of England, believes that all issues relating to financial stability of the UK are still highly uncertain. Problems of the European debts continue to put pressure on the British economy. However, measures of the ECB and especially auction LTRO had a positive effect on the banks of the country. At the same time the committee believes that the banks with more vulnerable financial structure should be more attentive to the problems of the European peripheral areas and in particular, to monitor sufficient level of capital.

According to statistics released last week retail sales in the UK fell by 0.8% m/m (+1.0% y/y) in February. At the same time sales, excluding fuel, decreased for the same amount last month; index in January was revised upward to +0.3% m/m. Apparently weak labour sector and high level of inflation continue to put pressure on the index of retails sales.

Unemployment rate was 5.0% in February, number of unemployed increased by 7.2 thousand. Weak employment sector prevents economic recovery of the country in general. main disputes in the Bank of England have shifted to the problem of QE and appropriateness of the program continuation. Now the head of the Regulator, Mervyn King noted that he is not so sure if further expansion of QE will be required. According to him, the Bank of England examines appropriateness of the repurchase program monthly basis. Mr. Miles, representative of the Bank of England believes that the main essence of the assets repurchase program primarily is to achieve targeted inflation level, not to finance deficit in state budget and withdrawal from QE will completely depend on inflationary forecast. Miles also stressed yesterday that process of standardization of monetary policy will probably begin with the rise in rates.