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[LF.Anastasia]

GBP: British Pound started the week with decline

At the Forex currency market the British Pound Sterling rate traded downward on Monday due to not very positive sentiments among investors in the world capital markets.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it has shifted into sideways movement and is not giving a clear signal. Stochastic Oscillator remains in the oversold zone and maintains a sell signal.

Forex recommendations: in case of breakdown at the level of 1.5860 the pair GBP/USD will go to 1.5840 and 1.5820. Consolidation is possible at the current levels.

The UK markets are closed on Monday due to Easter celebrations.

At the meeting of the Bank of England which was held last week, it was decided to keep interest rate unchanged at the level of 0.5% per annum, as expected. The regulator did not make any other changes, leaving everything as it was. He noted that he would continue to review the size of the QE program, which will expire in a month time. In this view a meeting of the Bank of England in May is going to be very interesting.

Previous statistics demonstrated that consumer confidence in the UK GFK/NOP declined to -31 points in March against the level of -29 points. The data indicates strong destabilization in the British economy. GDP in the UK fell by 0.3%on quarterly basis in Q4 (+0.55 Y/Y) while economists expected less significant fall of 0.2% q/q. Balance of current accounts in the UK was at the level of -stg8.451 billion in Q4 against the forecast of –stg8.4 billion. At the same time volume of consumer expenditures at the end of 2011 increased only by 0.4% on quarterly basis (+0.5% q/q on quarterly basis).

According to the data released earlier, retail sales fell by 0.8% m/m (+1.0% y/y). According to the data released earlier, sales excluding fuel fell by the same value and index for January was revised upward up to +0.3% m/m. It seems that weak labour sector and high levels of inflation put pressure on the retail sales index. Unemployment rate amounted to 5.0% in February; number of unemployed increased by 7.2 thousand. Weakness in the sector prevents economic recovery of the country.

It became known this week that PMI Markit/CIPS in the manufacturing sector rose to 52.1 points in March against revised value of 51.5 points. This data gave good support to the currency. The index was at highs since May 2011 and the main driver of growth was the volume of new orders: 52.7 points against the level of 50.5 points earlier. This index is maximal as well-at the peaks since March last year.

 

[LF.Anastasia]

CHF: Swiss Franc is stable at the beginning of the week

At the Forex currency market Swiss Franc rate seems stable on Monday, remaining in the range of 0.9142-0.9222.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area; it has stopped decline and is moving along the signal line, not giving a clear signal. Stochastic Oscillator remains in the overbought zone, giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at 0.9200 the pair USD/CHF will go to 0.9210 and 0.9250. Consolidation close to the current levels is possible.

At the end of last week, Franc made attempt to rise in the pair EUR/CHF, brining into challenge the integrity of the level 1.20, to which the pair was pegged since last autumn. Economists estimated that beating off one attack of speculators cost not less than 1 billion francs to the Bank.

Currency reserves rose to 237.5 billion in March against previous level of 224.9 billion francs. PMI SVME in Switzerland increased to 51.1 points in March against the forecast of 49.5 points. However other data was weak: retails sales rose only by 0.8% y/y in February against 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. CPI rose by 0.6% m/m (-1.0% y/y) in March against the forecast of growth of 0.4% m/m. However the Franc was more interested in the external background and ignored this statistics.

At the last meeting of Swiss National Bank a three-month Libor rate was left unchanged at the level of )%. In general, SNB’s view on monetary policy remains unchanged.

In Q4 production in the manufacturing sector of Switzerland has declined again: volume of industrial output for the reporting period amounted to -1.4% y/y against the level of -1.9% in Q3. It became known earlier that imports rose by 0.7% y/y in February, to the level of 14.04 billion francs, while imports rose only by 1.2% y/y last month 916.72 billion francs) Trade balance amounted to 2.68 billion francs in February rising against the previous level of 1.5 billion francs. According to the data released earlier, unemployment rate in Switzerland amounted to 3.4% in February- no changes.

Manufacturing sector is still weak in Switzerland, however it shows recovering trend. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales increased by 4.4% y/y in January versus growth of 1.7% 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). The data is quite good and indicates that Swiss economy is getting used to expensive Franc. Thus, the regulator expects that inflation will amount from -0.6% to +0.6% in 2012-2014, GDP growth will be at the level of 1.0% this year.

 

[LF.Anastasia]

JPY: Japanese Yen is rising in price very quickly

At the Forex currency market the Japanese Yen rate continues to rise in price on Monday, amid ongoing interest of players to “safe” currencies.

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

Forex recommendations: in case of breakdown at the level of 81.40 the pair USD/JPY will go to 81.30 and 81.10. Consolidation at the current levels is possible.

Statistics released this morning showed that current account balance in Japan amounted to Y1.178 billion in February. In addition, index of economic observers rose to 51.8 points in March against the level of 45.9 points in February. The data indicates that positive trend in the Japanese economy is still preserved.

This data is perfectly consistent with the previous indexes: Retail sales increased by 3.5% in February against expectations of growth of 1.3%. Real GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. Current account balance amounted to -Y437.3 billion in Q4 against the forecast of +Y322.3 billion. Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%. In addition, household spending rose by 2.3% y/y in February against expectations of decline of 0.4% y/y. Net CPI rose by 0.1% y/y in February versus expectations of decline of 0.1% y/y. The data is very positive indeed.

Finance Minister of Japan Mr. Azumi said that the country continues to watch over the negotiations in Europe on establishing so-called protective barrier, the comment was given in response to expectations whether Japan would participate in the fight against European debt crisis through the investment to IMF.

Consumer sentiment index in Japan increased by 1.9 points in March to the level of 55.6 points against the level of -57.5 points in December. The data released on last Tuesday showed that monetary base in Japan fell to -0.2% y/y in March versus the growth of 11.3% earlier. The head of the Bank of Japan Mr. Shirakawa stressed again that winning the fight against inflation in extremely important for the country. The country of the Rising Sun needs measures to stimulate growth rate; however, these measures and infusions of the Central Bank will not improve the situation.

 

[LF.Anastasia]

AUD: Australian Dollar is under risk of pressure from sellers

At the Forex currency market the Australian Dollar rate is under pressure from sellers on Monday, as markets are not very disposed to risk. In addition, expectation of Chinese statistics has a negative impact on the positions of the AUD.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area, maintaining a sell signal, while volumes are high. Stochastic Oscillator keeps positions in the oversold zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0280 the pair will go back to1.0260 and 1.0240.

Market is Australia is closed today.

The Reserve Bank of Australia stated last week that funding problems can be preserved in the country this year, 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 have a significant impact on Australian economic system. This statement was unfavourable for the AUD.

A meeting of the Reserve Bank of Australia had mixed outcome: interest rate was left at the previous level of 4.25% per annum; however it was the tone of the follow-up comments that made investors feel anxious. Thus, the regulator stressed that the RBA is able to lower the rate if macro-economic data will show slowdown in domestic demand. The RBA also emphasized strong negative effect of European influence.

Statistics released earlier 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.

Activity index AiG in the service sector rose to 47.0 points in March against the fall of 5.3 points in February. Trade balance amounted to -А$0.48 billion in February against the level of +A$1.3 billion in January.

 

[LF.Anastasia]

CAD: Canadian Dollar tries to regain from Friday’s losses

At the Forex currency market the Canadian dollar rate tries to regain from Friday’s losses at the beginning of the week.

Forex forecast: MACD indicator for the pair USD/CAD is in the negative area, it has started to move along the signal line and is not giving a clear signal. Stochastic Oscillator goes up sluggishly in the neutral zone, giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 00.9965 the pair will go to 0.9980 and 1.00000. Consolidation near current levels is possible.

The CAD has hopes for stability in the oil prices. Пока у луни есть надежда на стабильные нефтяные цены.

The head of the bank of Canada Mr. Carney noted earlier that economy of the country is growing slightly above the forecast and government possesses a number of tools to protect housing market from overheating. However, tools of monetary policy will be used only as the last resort. Earlier Mr. Carney stressed that current interest rate is consistent with the monetary situation. Recall that in the middle of January the Bank of Canada left interest rate at the level of 1.0% per annum, which was not a surprise to the market. The bank of Canada expressed concern about the condition of the housing sector, according to the regulator, 10% decline in this sector can lead to decrease in consumption of 1%, as the major volume of mortgage loans was used to finance consumption.

According to the data released earlier, GDP in Canada rose by 0.1% m/m (+1.75% y/y) in January versus revised value of +0.5% m/m (+1.9% y/y) which in general agreed with the forecast. Previous statistics demonstrated that economic growth in Canada slowed down: real GDP amounted to +0.4% m/m in December against the forecast of +0.3% m/m. All in all Canadian economy grew only by 0.4% in the last quarter last year against +1.0% in Q3.

It became known at the end of last week that unemployment rate in Canada fell to 7.2% (-0.2%) in March from 7.6% earlier. At the same time, level of employed increased by 82 thousand. We would remind that it is a positive trend, as unemployment rate in February fell by 0.2%, although number of jobs did not rise significantly in the last month of winter. In addition, permits to construct in Canada rose by 7.5% m/m in February to C$6.51 billion against the fall of 11.4$ in January.

 

[LF.Anastasia]

EUR/USD: Euro was filled with enthusiasm due to Spanish news

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

By 8.25 Moscow time the Euro is at 1.3130 against yesterday’s closing level of 1.3104.

Positive news from Spain helped the major pair to regain from the fall to the local lows yesterday: the country announced the plan to cut on expenses for 10 billion Euro. Toughening will concern mostly social programs and health care sector.

Meanwhile Reuters survey showed that QE3 is still expected in the U.S. Chairman of the U.S. Federal Reserve Ben Bernanke said in his speech in Atlanta yesterday that American economy is still far from full recovery.

This afternoon, investors will be interested in statistics from Germany. The U.S. data on wholesale inventories will draw Investors ’attention tonight.

Most likely, the pair EUR/USD will be in the range of 1.3050-1.3150 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound tends to recover

At the Forex currency market the British Pound Sterling rate traded upward on Tuesday. British players are coming back to the trading floors today after Easter holidays.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area it is going down and is giving a sell signal. Stochastic Oscillator is leaving oversold zone and is giving a buy signal now.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5930 the pair GBP/USD will go to 1.5940 and 1.5960. If aggressive sellers will be back in the pair the target will be the level of 1.5880.

Statistics released this morning showed that house price index RICS rose to -10 points in March against the level of -13 points in February. This is the highest level in the index since June 2010.

Previous statistics demonstrated that consumer confidence in the UK GFK/NOP declined to -31 points in March against the level of -29 points. The data indicates strong destabilization in the British economy. GDP in the UK fell by 0.3%on quarterly basis in Q4 (+0.55 Y/Y) while economists expected less significant fall of 0.2% q/q. Balance of current account in the UK was at the level of -stg8.451 billion in Q4 against the forecast of –stg8.4 billion. At the same time volume of consumer expenditures at the end of 2011 increased only by 0.4% on quarterly basis (+0.5% q/q on quarterly basis).

According to the data released earlier, retail sales fell by 0.8% m/m (+1.0% y/y). According to the data released earlier, sales excluding fuel fell by the same value and index for January was revised upward up to +0.3% m/m. It seems that weak labour sector and high levels of inflation put pressure on the retail sales index. Unemployment rate amounted to 5.0% in February; number of unemployed increased by 7.2 thousand. Weakness in the sector prevents economic recovery of the country. PMI Markit/CIPS in the manufacturing sector rose to 52.1 points in March against revised value of 51.5 points. This data gave good support to the currency. The index was at highs since May 2011 and the main driver of growth was the volume of new orders: 52.7 points against the level of 50.5 points earlier. This index is maximal as well-at the peaks since March last year.

At the meeting of the Bank of England which was held last week, it was decided to keep interest rate unchanged at the level of 0.5% per annum, as expected. The regulator did not make any other changes, leaving everything as it was. He noted that he would continue to review the size of the QE program, which will expire in a month time. In this view a meeting of the Bank of England in May is going to be very interesting.

 

[LF.Anastasia]

CHF: Swiss Franc may strengthen slightly in the range

At the Forex currency market Swiss Franc rate traded slightly upward on Tuesday remaining within the oversold channel of 0.9093-0.9222.

Forex forecast: MACD indicator for the pair USD/CHF is going up moderately in the negative area and is giving a buy signal. Stochastic Oscillator is coming out of the overbought zone, giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9170 the pair USD/CHF will go to 0.9180 and 0.9200. If “bears” will turn up in the pair, the target will become the level of 0.9130.

Marco-economic situation in Switzerland is stable on Tuesday morning.

Investors will wait for the data on unemployment rate in the country for March, It is very probable that the index will remain at the level of 3.1%.

At the end of last week, Franc made attempt to rise in the pair EUR/CHF, brining into challenge the integrity of the level 1.20, to which the pair was pegged since last autumn. Economists estimated that beating off one attack of speculators cost not less than 1 billion francs to the Bank.

Currency reserves rose to 237.5 billion in March against previous level of 224.9 billion francs. PMI SVME in Switzerland increased to 51.1 points in March against the forecast of 49.5 points. However other data was weak: retails sales rose only by 0.8% y/y in February against 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. CPI rose by 0.6% m/m (-1.0% y/y) in March against the forecast of growth of 0.4% m/m. However the Franc was more interested in the external background and ignored this statistics.

At the last meeting of Swiss National Bank a three-month Libor rate was left unchanged at the level of )%. In general, SNB’s view on monetary policy remains unchanged.

Manufacturing sector is still weak in Switzerland, however it shows recovering trend. Index of industrial activity SVME rose to 49.0 points in February against the forecast of 48.5 points. Real retail sales increased by 4.4% y/y in January versus growth of 1.7% 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). The data is quite good and indicates that Swiss economy is getting used to expensive Franc. Thus, the regulator expects that inflation will amount from -0.6% to +0.6% in 2012-2014, GDP growth will be at the level of 1.0% this year.

 

[LF.Anastasia]

JPY: Japanese Yen strengthens moderately

At the Forex currency market the Japanese Yen rate strengthens moderately on Tuesday, making use of the comments made in the Bank of Japan on the outcome of the meeting which finished today

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

Forex recommendations: in case of breakdown at the level of 81.25 the pair USD/JPY will go to 81.20 and 81.00. Consolidation near the current levels is possible.

A regular meeting of the Bank of Japan, which finished today, was rather quiet. Interest rate was left at the level of 0.1% per annum; volumes of assets repurchase program have not been revised either. In the follow-up comments the regulator noted that European negative influence on the economy is still there, although to a lesser extent; however there is still no progress in the economic system.

In general, the views of the Bank contradicted the opinion of Japanese government, who would like to see more dynamic stimulation of the economy.

Statistics released earlier showed that current account balance in Japan amounted to Y1.178 billion in February. In addition, index of economic observers rose to 51.8 points in March against the level of 45.9 points in February. The data indicates that positive trend in the Japanese economy is still preserved.

This data is perfectly consistent with the previous indexes: Retail sales increased by 3.5% in February against expectations of growth of 1.3%. Real GDP amounted to -0.2% q/q (-0.7% y/y) in Q4. Current account balance amounted to -Y437.3 billion in Q4 against the forecast of +Y322.3 billion. Unemployment rate in Japan fell to 4.5% in February against the forecast of 4.6%. In addition, household spending rose by 2.3% y/y in February against expectations of decline of 0.4% y/y. Net CPI rose by 0.1% y/y in February versus expectations of decline of 0.1% y/y. The data is very positive indeed.

 

[LF.Anastasia]

AUD: Trade is sluggish for Australian Dollar on Tuesday

At the Forex currency market trade is sluggish for the Australian Dollar rate on Tuesday morning.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area, maintaining a sell signal, while volumes are high. Stochastic Oscillator went out of the oversold zone and is giving a buy signal at the moment.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0320 the pair will go back to 1.0340 and 1.0350. If external background deteriorates, the target for sale will be the level of 1.0250.

Austrian Dollar remains very sensitive to the news from China.

Statistics released earlier 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.

Activity index AiG in the service sector rose to 47.0 points in March against the fall of 5.3 points in February. Trade balance amounted to -А$0.48 billion in February against the level of +A$1.3 billion in January.

The Reserve Bank of Australia stated last week that funding problems can be preserved in the country this year, 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 have a significant impact on Australian economic system. This statement was unfavourable for the AUD.

A meeting of the Reserve Bank of Australia had mixed outcome: interest rate was left at the previous level of 4.25% per annum; however it was the tone of the follow-up comments that made investors feel anxious. Thus, the regulator stressed that the RBA is able to lower the rate if macro-economic data will show slowdown in domestic demand. The RBA also emphasized strong negative effect of European influence.