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[LF.Anastasia]

CHF: Trades are still sluggish for Swiss Franc

At the Forex currency market Swiss Franc rate does not demonstrate any heightened activity on Thursday.

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 0.9035 the pair USD/CHF will go to 0.9020 and 0.9000.

State of affairs in the economy of Switzerland remains mostly unchanged.

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

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.

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 tendency to 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.

 

[LF.Anastasia]

JPY: Japanese Yen is rising in price at the moment

At the Forex currency market the Japanese Yen rate gains strength on Thursday, while other currencies are traded sluggishly in the sluggish outset sideways. The fact that it is the end of the fiscal year provides support to the Yen. Fiscal year will finish on 31 March, so exporters bring receipts into the country.

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

Forex recommendations: in case of breakdown at 82.60 the pair USD/JPY will go to 82.50 and 82.30.

Statistics released this morning showed that retail sales in Japan increased by 3.5% y/y in February against expectation of growth of 1.3%. This is a positive indication however it shall be corroborated by further data.

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.

Finance Minister of Japan Mr. Azumi said earlier that the country is going to watch 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.

The head of the bank of Japan reiterated 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 only these actions and infusions of the CB will not be able to improve the situation.

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.

 

[LF.Anastasia]

AUD: Australian Dollar remains under pressure of sellers

At the Forex currency market the Australian Dollar rate remains vulnerable on Thursday; sales have not subsided for the AUD.

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 gown in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0360 the pair will aim to 1.0350 and 1.0310.

Statistics released on Thursday showed that number of jobs in Australia increased by 0.7% q/q in December-February. Previous statistics demonstrated that unemployment rate in the country 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.

The Reserve Bank of Australia stated yesterday 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 statement was unfavourable for the AUD.

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.

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.

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]

NZD: New Zealand Dollar continues to decline

At the Forex currency market the New Zealand rate is traded downward on Thursday for the third consecutive session.

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 started to go down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8155 the pair will go to 0.8150 and 0.8110. Consolidation near the current levels is possible.

Statistics released today showed that business confidence in New Zealand increased to 33.8 points in March, as per estimates of NBNZ, against the level of 28.0 points in February. The data has deterred the NZD from more significant sales. Boom in the construction sector of the country remains the catalyst for the rise in the business confidence.

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.

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 reason to revise interest rate at the moment.

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. 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.

 

[LF.Anastasia]

EUR/USD: Euro is traded upward on Friday

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

By 8.45 Moscow time the Euro is at 1.3352 against yesterday’s closing level of 1.3301.

Optimism was driven by the meeting of Finance Ministers of Eurozone, which will be held today; issues related to the funds EFSF and ESM are going to be discussed. It is expected that politicians can vote for keeping both permanent and temporary funds and will also comment on the prospects of such mechanisms.

The flow of macro-statistics from the U.S. is scheduled for this afternoon which will be interesting for the players.

Most likely the pair EUR/USD will not go beyond the range of 1.3270-1.3390 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound tends to go up

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

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 near the boundary of the overbought zone and is not giving a definite signal.

Forex recommendations: in case of breakdown at the level of 1.5990, the pair GBP/USD will go to 1.6000 и 1.6020 Consolidation is possible at the current levels.

Statistics released this morning showed that consumer confidence GFK/NOP in the UK declined to -31 points in March against the level of -29 in February. The data indicates that strong destabilization factor is still preserved in British economy.

The data released earlier 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).

So far, statistics is unfavourable for the GBP; however influence of the external background is clearly stronger.

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. The 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. 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.

 

[LF.Anastasia]

CHF: Swiss Franc aims to grow

At the Forex currency market Swiss Franc rate aims to grow at the end of the week, so that it can go away from the boundaries of oversold corridor where it has been in the last few days.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area; it has broken through the signal line from top to bottom and is resuming a sell signal. Stochastic Oscillator remains in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at 0.9020 the pair USD/CHF will go to 0.9010 and 0.9000.

Today investors expect the data on leading indicators index KOF for March in Switzerland. The index can influence on balance of forces in Franc.

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

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.

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.

Representative of Swiss Finance Ministry said on Monday that the pegging rate of the pair EUR/CHF shall be maintained in the range of 1.35-1.40 but not at current 1.20. Finance Minister said in his interview to the local TV that he would welcome the rise in the pair; however this matter is under control of SNB.

Disagreements about preservation of the rate in the pair are difficult to understand, as only a few days ago Mr. Mr. Dantin emphasized 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 the pair from dipping below this level, the regulator is ready to do all possible, including buying foreign currency unlimited quantities. Manufacturing sector is still weak in Switzerland; however it demonstrates tendency to 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.

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 favourable data shows 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.

 

[LF.Anastasia]

JPY: Japanese Yen continues to strengthen

At the Forex currency market the Japanese Yen rate continues to grow significantly on Friday basing on the previous factors.

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

Forex recommendations: in case of breakdown at the level of 81.90 the pair USD/JPY will go to 81.80 and 81.60.

The JPY is supported by the fact that it is the end of the fiscal year which will end on 31 March. Exporters bring revenues into the country.

Statistics released this morning included the following: unemployment rate in February fell to 4.5% in February against the forecast of 4.6% in the Country of the Rising Sun. In addition, household spending rose by2.3% y/y in February versus expectations of decline of 0.4% y/y. Net CPI increased by 0.1% y/y in February against the forecast of decline of 0.1% y/y.

This data is very favourable indeed.

Retail sales rose by .5% y/y in February against expectations of growth of 1.3% y/y. This is a positive indication; however it shall be corroborated by further data.

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. 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.

Finance Minister of Japan Mr. Azumi said earlier that now the country is watching over the 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. The head of the Bank of Japan reiterated 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 only these actions and infusions of the CB will not be able to improve the situation.

 

[LF.Anastasia]

AUD: Australian Dollar tries to regain part of losses

At the Forex currency market the Australian Dollar rate tries to go up at the end of the week after significant sales yesterday. The pair AUD/USD has reached the level of 1.0304 yesterday.

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

Forex recommendations: in case of breakdown at the level of 1.0400 the pair will aim to 1.0380 and 1.0350.

Macro-economic background is calm in Australia. External background will provide support to the AUD today.

Statistics released on Thursday showed that number of jobs in Australia increased by 0.7% q/q in December-February. Previous statistics demonstrated that unemployment rate in the country 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.

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.

The Reserve Bank of Australia stated earlier that funding problems can be preserved this year in the country, although access to funding has become easier for many banks. The RBA emphasized that uncertainty in Europe and slow down in the global economy can significantly impact on Australian economy. This statement was unfavourable for the AUD.

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.

 

[LF.Anastasia]

NZD: Positions of New Zealand Dollar have stabilized

At the Forex currency market the New Zealand Dollar rate has stabilized on Friday; the NZD is in the black due to the overall rise in the market.

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 continues to slide down moderately in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8190 the pair will aim to 0.8180 and 0.8160. It is possible that the pair will go to 0.8220.

It became known this morning that permits to construct in New Zealand fell by 6.7% in February against the revised value of +8.3% m/m in January.

Statistics released today showed that business confidence in New Zealand increased to 33.8 points in March, as per estimates of NBNZ, against the level of 28.0 points in February. This data has deterred the NZD from more significant sales. Boom in the construction sector of the country remains the catalyst for the rise in the business confidence.

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%. 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.

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 reason to revise interest rate at the moment.

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.

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. 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.