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[LF.Anastasia]

GBP: British Pound completed Friday with steady growth

At the Forex currency market the British Pound Sterling rate was traded upward on Friday amid overall rise at the external capital markets.

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 remains in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6010, the pair GBP/USD will go to 1.6020 and 1.6050. Consolidation is possible at the current levels.

A regular meeting of the Bank of England will be held on Thursday, 5 April. Investors will be interested in the follow-up comments on economic outlook. It will be a short week for the British market, as the local market will be closed on Friday due to Easter celebrations.

Previously released statistics 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).

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 necessary. 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.

According to the data released earlier, 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 of 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.

 

[LF.Anastasia]

CHF: Swiss Franc is still in the range

At the Forex currency market Swiss Franc rate completed Friday with the rise. However, currency has not left the oversold range of 0.9008-0.9092.

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. Consolidation near the current levels is possible.

Macro-economic situation in Switzerland is stable on Monday morning.

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.

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

Representative of Swiss Finance Ministry said last Monday that the pegging rate of the pair EUR/CHF shall be maintained in the range of 1.35-1.40 but not at the 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. 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. Real retail sales increased by 4.4% in January against the growth by 1.7% y/y in December. 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. Three- month Libor rate of Swiss National Bank remained unchanged at the level of 0%. In general, position of SNB on monetary policy has remained unchanged.

 

[LF.Anastasia]

JPY: Japanese Yen had reached local highs and instantly begun to retreat

At the Forex currency market the Japanese Yen rate fell at the closing session on Friday. Investors moved away from long positions in the JPY in advance of the end of the fiscal year.

Forex forecast: MACD indicator for the pair USD/JPY goes down in the positive area, while volumes are average and is giving a sell 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 82.90 the pair USD/JPY will go to 83.00 and 83.20.

Earlier the JPY gained support from the fact that it was the end of the fiscal year which finished on 31 March. Exporters brought revenues to the country last week. So this factor is losing force now.

Retail sales rose by 3.5% 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.

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. Unemployment rate in February fell to 4.5% in February against the forecast of 4.6%. 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.

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. 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.

 

[LF.Anastasia]

AUD: Australian Dollar is still on a weak wicket

At the Forex currency market the Australian Dollar rate is still on a weak wicket; investors continued to sell the currency on Friday.

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, and 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 1.0340 the pair will aim to 1.0320 and 1.0300.

Despite general positive backdrop in the world capital markets, the AUD is again on sale versus the American dollar. At the end of last week the pair came up closely to the lows of January.

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 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. 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]

CAD: Canadian Dollar remains in the oversold channel

At the Forex currency market the Canadian Dollar rate weakened again on Friday.

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 up in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at 0.9990 the pair will go to 1.0000 and 1.0030. Consolidation at the current levels is probable.

According to the data released on Friday, GDP in Canada rose by 0.1% m/m (+1.75% y/y) in January against revised value of +0.5% m/m (+1.9% y/y), which in general agreed with the forecast. Previous statistics showed that economic growth in Canada slowed down in Q4: real GDP amounted to +0.4% m/m in December against the forecast of +0.3% m/m. Al in all Canadian economy grew only by 0.4% in the last quarter last year versus +1.0% in Q3. This can be attributed by strong impact of external factors and decreased interest in energy resources at the end of the year.

The head of the Bank of Canada Mr. Carney believes that current rates are consistent 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. Unemployment rate in Canada fell from 7.4% to 7.6% in February, number of jobs declined by 2.8 thousand.

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.

Average weekly earnings in the country rose by 0.6% m/m (+2.0% y/y in January.

 

[LF.Anastasia]

EUR/USD: Euro declines at the beginning of the week

The pair EUR/USD declines slightly at the Forex currency market on Monday morning.

By 8.30 Moscow time the Euro is at 1.3336 against closing level of 1.3343 on Friday.

The major pair is in the oversold range at the beginning of the week, assessing outcome of the meeting of European committee.

At the meeting, Finance Ministers of European Union declared for expansion of the reserves of the IMF, as the Fund requires variety of tools to combat inflation.

Last Friday the politicians adopted a decision to increase volume of anti-crisis fund up to 1 trillion, which theoretically shall become the basis for expansion of the reserves in IMF.

This week is going to be short for European and American markets: most of them will be closed on Friday due to Easter celebrations.

Most likely the pair EUR/USD will not go beyond the range of 1.3280-1.3370 at the trading session on Monday.

 

[LF.Anastasia]

EUR/USD: Euro slowly goes up

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

By 9.15 Moscow time the Euro is at 1.3333 against yesterday’s closing level of 1.3319.

Chinese statistics supports positions of the major pair this morning: PMI in the service sector of China rose to 58.0 points in March against previous level of 48.4 points.

The calendar of European statistics is not very eventful today; only the data on producer price index in Eurozone for February will become known. The U.S. Redbook data is scheduled for publication tonight as well as the data on orders in the manufacturing sector for February.

In general, today’s session is going to be quiet.

Most likely the pair EUR/USD will not leave the range of 1.3280-1.3380 at the trading session on Tuesday.

 

[LF.Anastasia]

British Pound keeps on ascending trend

At the Forex currency market the British Pound Sterling rate is still traded upward on Tuesday.

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 remains in the overbought zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6040, the pair GBP/USD will go to 1.6050 and 1.6070. Consolidation is possible at the current levels.

Yesterday, purchases in the GBP were spurred up by statistics: PMI Markit/CIPS in the manufacturing sector rose to 52.1 points in March against previous revised level of 51.5 points.

The index was at the highest level since May 2011, the main driver of growth was the volume of new orders: 52.7 points against 50.5 points earlier. This index is at highs since last March as well.

The latest statistics 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).

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.

According to the data released earlier, 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 of 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. A regular meeting of the Bank of England will be held on Thursday, 5 April. Investors will be interested in the follow-up comments on economic outlook. It will be a short week for the British market, as the local market will be closed on Friday due to Easter celebrations.

 

[LF.Anastasia]

CHF: Swiss Franc is still in the range

At the Forex currency market Swiss Franc rate remains in the oversold range of 0.9001-0.9092 on Tuesday.

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 giving 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. Consolidation near the current levels is possible.

Yesterday’s statistics showed that PMI SVME in Switzerland rose to 51.1 points in March against the forecast of 49.5 points. However, other data was weak: retail sales increased only by 0.8% in February against the previous value of +4.7% y/y and the forecast of growth of 2.0% y/y.

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

Manufacturing sector is still weak in Switzerland and does not demonstrate tendency to recover any more. Manufacturing activity index SVME increased to 49.0 points in February against the forecast of 48.5 points. Real retail sales rose by 4.4% in January against the growth by 1.7% y/y in December. 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). he data is quite good and 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.

At the last meeting of Swiss National Bank three- month Libor rate was left unchanged at the level of 0%. In general, position of SNB 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.

 

[LF.Anastasia]

JPY: Japanese Yen went up to the peak of March

At the Forex currency market the Japanese Yen rate is traded upward on Tuesday due to weakness of the American dollar.

Forex forecast: MACD indicator for the pair USD/JPY goes down in the positive area, while volumes are average and is giving a sell signal. Stochastic Oscillator has reversed in the neutral zone and goes down, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 82.00 the pair USD/JPY will go to 81.90 and 81.70. Consolidation at the current levels is possible.

The data released on Tuesday showed that monetary base in Japan fell to -0.2% y/y in March against the growth of 11.3% earlier. The Yen did not respond to statistics, as investors are focused on the external background now, which is in general favourable for today’s trading session.

Earlier the JPY gained support from the fact that it was the end of the fiscal year which finished on 31 March. Exporters brought revenues to the country last week. So this factor is losing force now.

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 Mr. Shirakawa 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.

Retail sales rose by 3.5% 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.

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. Unemployment rate in February fell to 4.5% in February against the forecast of 4.6%. 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.