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[LF.Anastasia]

Forex Analytics of LiteForex of 12.08.10: GBP: rather stay away from risk while British is determining movement direction

At the Forex currency market the British Pound rate is trying to be corrected following the previous fall.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and continues to go down, giving a pair sell signal. Stochastic Oscillator is giving a pair buy signal.
Forex recommendations: off the board.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5700 the pair will go to 1.5800 and 1.5850. If the level if 1.5610 is exceeded, the sellers’ targets will be 1.5550 and 1.5510.
The head of the Bank of England Mervin King stated yesterday that inflation rate of around 2% he takes as comfortable for the economy; inflation is under complete control currently. According to him none of the British Banks sought assistance from the regulator so far. King stressed that banks can apply for the funds if required. Quantitative economy easing will be continued if necessary, said the head of the Bank.
At the same time King stressed that in the second half of this year economic growth rate might slow down in the UK and economic recovery pace will be jerky.
According to the data released earlier the UK job market has been decreasing in July - KPMG/REC calculations show that permanent jobs index declined to 60.2 in July against the level of 60.7 in June. Temporary jobs index reduced to 54.3 in July against the previous level of 57.0.
As per Halifax data houses prices increased by 0.6% on monthly basis (+4.9% y/y) in July

Employment data is of interest also because statistics on Tuesday showed that number of jobs in the UK increased to 102 as per Reed index in July – key level of the growth rate is specified to be 100, excess over this level indicates rate growth. At the same time work force is required urgently in some sectors: production sector has reached the level of 116, insurance sector – 138.

Worth recalling that last week the Bank of England kept the interest rate unchanged at the level of 0.50% per annum, which agreed with the market expectations, the assets buy-back program was also left unchanged in the amount of 200 billion pound sterling. Note, that earlier one of the MPC members, Sentence has already advocated for the rate increase – however market believes that it will not happen until spring next year. Further forces alignment will fall into place as soon as the minutes of the meeting are released.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 12.08.10: NZD: New Zealand Dollar continues to fall down

At the Forex currency market the British Pound rate is trying to be corrected following the previous fall.
Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and continues to go down, giving a pair sell signal. Stochastic Oscillator is giving a pair buy signal.
Forex recommendations: off the board.
Feasible event scenario at Forex: in case of breakdown at the level of 1.5700 the pair will go to 1.5800 and 1.5850. If the level if 1.5610 is exceeded, the sellers’ targets will be 1.5550 and 1.5510.
The head of the Bank of England Mervin King stated yesterday that inflation rate of around 2% he takes as comfortable for the economy; inflation is under complete control currently. According to him none of the British Banks sought assistance from the regulator so far. King stressed that banks can apply for the funds if required. Quantitative economy easing will be continued if necessary, said the head of the Bank.
At the same time King stressed that in the second half of this year economic growth rate might slow down in the UK and economic recovery pace will be jerky.
According to the data released earlier the UK job market has been decreasing in July - KPMG/REC calculations show that permanent jobs index declined to 60.2 in July against the level of 60.7 in June. Temporary jobs index reduced to 54.3 in July against the previous level of 57.0.
As per Halifax data houses prices increased by 0.6% on monthly basis (+4.9% y/y) in July

Employment data is of interest also because statistics on Tuesday showed that number of jobs in the UK increased to 102 as per Reed index in July – key level of the growth rate is specified to be 100, excess over this level indicates rate growth. At the same time work force is required urgently in some sectors: production sector has reached the level of 116, insurance sector – 138.

Worth recalling that last week the Bank of England kept the interest rate unchanged at the level of 0.50% per annum, which agreed with the market expectations, the assets buy-back program was also left unchanged in the amount of 200 billion pound sterling. Note, that earlier one of the MPC members, Sentence has already advocated for the rate increase – however market believes that it will not happen until spring next year. Further forces alignment will fall into place as soon as the minutes of the meeting are released.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 12.08.10: CAD: Canadian Dollar is still weak

At the Forex currency market on Thursday the Canadian Dollar rate continues to decline in pairing with the USD – the currency of the raw products is not supported either by oil or global markets, where correction is still in progress today.
Short term trend for the pair USD/CAD is upward; medium term trend is the same.
Support levels: 1.0100, 1.0010.
Resistance levels: 1.0500, 1.0585.
The Canadian trade balance data for June was released yesterday. Deficit index increased to 1.1 billion Canadian dollars against the expectations of the almost perfect trade balance. Thus, the Canadian exports data is quite weak. The proximity of the USA, where the economic recovery pace has been slowing down, also impacts on Canada.
Labour market statistics leaves much to be desired. Jobs decreased by 9.3 thousand in July against the forecast of growth by 14 thousand. Unemployment rate in the country increased to 8.0% against the previous value of 7.9%.

Apparently Canadian employers overplayed their hand a month ago: employment rate in June amounted to 93.2 thousand – now companies fire employees, to play safe.

In June the Bank of Canada announced a decision to raise interest rate to 0.75% per annum which was the second consecutive rate increase. In spite of development, the last comments of the Bank’s representatives poured cold water on those who were interested in buying CAD. The Bank noted that the world economy recovery is still in progress; however it is slow and self-induced. Bank’s representatives also stressed that further interest rate increase will be carried out with extreme prudence based on the progress in both Canadian and world economy. Most likely by such comment the Bank ensured that they have wiggle room left, not implying that the interest rate increase is impossible in the foreseeable future. The Bank of Canada expects that the country’s economy will grow by 3.5% this year; while the growth forecast in April was by 3.7%. Growth forecast for 2011 was reduced to 2.9% from 3.1%.

Earlier the CB of Canada brought down the economic growth quarterly forecasts until QI 2011 inclusive as a response to the weak and obscure world economic outlooks. Inflation forecasts were also slightly adjusted. However, investors viewed the report as a signal of the monetary policy tightening, which was mainly activated by the phrase that the Bank intends to implement a gradual reduction of monetary stimulus, which will correspond to the achieved target level of inflation.

The next meeting of the Bank of Canada will be held on 8 September.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 12.08.10: AUD: Aussie’s sales slowed down; prospects are still vague

At the Forex currency market the Australian Dollar rate continues to go down, however at a lower rate; following significant reduction of positions for the pair AUD/USD today, sales for the pair has declined.
Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and is going down, confirming the previous sell signal for the pair. Stochastic Oscillator is giving an Aussie buy signal on Thursday.
Forex recommendations: off the board.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9000, the pair will go to 0.9050 and 0.9080. If the pair exceeds the level of 0.8900, sellers’ targets will be the levels of 0.8850 and 0.8800.
It became known today that unemployment rate in Australia has resumed – number of unemployed in the country increased to 23 thousand in July, while previously the rate increased by 37.4 thousand. Unemployment rate rose to 5.3% from 5.1%.
Apparently it is the economy response to the sharp increase of the interest rate – the economy was left without support so its reaction is not very positive. Companies do not take risk of enlarging stuff and such tendency will last till January.
Last week the Reserve Bank of Australia retained current interest rate at the previous level of 4.50% per annum. The main and official version –current level of inflation ease will prevent from undertaking drastic measures to tighten monetary policy- and it is true in general: the last inflation report in Australia released on 28 July showed that net prices increased by 2.7% on annual basis in QII. The head of RBA Stevens is planning to hold inflation level in the range of 2-3%. He says that the core inflation is expected to be approximately in the center of the indicated range until mid- 2011, however CPI inflation can rebound above 3% due to the introduction of the tobacco and utilities taxes.
However global situation is far from being stable and smooth – and this is the second factor which put pressure on the RBA. According to Stevens forecast of the world economic recovery is still obscure, considering inflation factor and ambiguous prospects of the global capital markets. RBA can extend an interval in the serious of rate increases indefinitely.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 13.08.10: EUR/USDZ: decline has not been completed

The EUR/USD is consolidating slightly after another decline yesterday at the Forex currency market on Friday.

By 9:40 Moscow time the Euro is at 1.2866 against the closing session level of 1.2829 yesterday.

Nothing fundamentally new can be said about the pair movement: it is obvious that the Euro’s rollback has not been completed; however next week the pair can well get a chance to regain the losses partly. We would reiterate that a strong resistance level which is close to the mark 1.2950, could throw the Euro down again.

Major pair is in the shadow for some time: market participants carefully monitor the USD/JPY movement which is apparently testing patience limits of the Bank of Japan.

Investors today will be interested in the Eurozone’s preliminary level of GDP in QII in and the U.S. statistics of last night.

Most likely the pair EUR/USD will be in the channel of 1.2820-1.3000 on Friday trading session.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 13.08.10: GBP: British Pound Sterling is being bought again

At the Forex currency market on Friday the British Pound Sterling rate has started to grow after the decline for almost a week – current levels seems appealing to the players.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it started to go up, giving grounds to buy the pair. Stochastic Oscillator is giving a similar signal.

Forex recommendations: buyers’ targets today will be the levels of 1.5700 and 1.5750.

As became known on Friday, houses prices in Great Britain and Wales increased by 0.1% on monthly basis (+8.1% y/y), in July which became the first growth factor over the last 5 months.

Earlier the data was released according to which the UK job market has been decreasing in July - KPMG/REC calculations show that permanent jobs index declined to 60.2 in July against the level of 60.7 in June. Temporary jobs index reduced to 54.3 in July against the previous level of 57.0. As per Halifax data houses prices increased by 0.6% on monthly basis (+4.9% y/y) in July

Employment data is of interest also because statistics on Tuesday showed that number of jobs in the UK increased to 102 as per Reed index in July – key level of the growth rate is specified to be 100, excess over this level indicates rate growth. At the same time work force is required urgently in some sectors: production sector has reached the level of 116, insurance sector – 138.
The head of the Bank of England Mervin King stated earlier that inflation rate of around 2% he takes as comfortable for the economy; inflation is under complete control currently. According to him none of the British Banks sought assistance from the regulator so far. King stressed that banks can apply for the funds if required. Quantitative economy easing will be continued if necessary, said the head of the Bank.
At the same time King stressed that in the second half of this year economic growth rate might slow down in the UK and economic recovery pace will be jerky.
Worth recalling that last week the Bank of England kept the interest rate unchanged at the level of 0.50% per annum, which agreed with the market expectations, the assets buy-back program was also left unchanged in the amount of 200 billion pound sterling. Note, that earlier one of the MPC members, Sentence has already advocated for the rate increase – however market believes that it will not happen until spring next year. Further forces alignment will fall into place as soon as the minutes of the meeting are released.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 13.08.10: CHF: Swiss Franc continues to grow

At the Forex currency market on Friday Swiss Franc continues to grow in pairing with the USD; however sales rate for the pair USD/CHF is obviously going down.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF, however it is going down, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal.

Forex recommendations: The targets of the USD/CHF sellers today will be the levels of 1.0450 and 1.0415.

The following Swiss news was released today:

– Producer index price and imports prices in July: -0.5% m/m, +0.5% y/y (forecast -0.2% m/m, +0.8% y/y ), preliminary -0.4% / +0.9%.

It also became known on Friday that Swiss National Bank had losses of Chf2.8 billion in the first half of the year.
The data released earlier (unemployment rate: 3.8% in July against 3.9% previously) was quite positive and indicated labour market improvement; however it did not support Franc. “Although we expect that improvement at the labour market will be gradual, we forecast that unemployment rate will reach the level of 3.9% on average in 2010” stressed economist Fabia Hiller.
According to the data released earlier consumer activity indicator in Switzerland rose to 1.81 in June against the level of 1.71 a month earlier – UBS noted in the review that index growth was mainly actuated by the increase in the number of the registered cars. However business activity index in Switzerland is still not the most optimistic.
Earlier Swiss National Bank presented monetary reserve data: the index reduced by 6.6 billion francs in June. Most likely it was caused by the assets revaluation, provoked by the national currency significant growth taken place recently. Released data suggests that SHNB did not carry out currency intervention in the first summer month. Earlier in May the Bank spent about 79 billion to buy EUR. Swiss National Bank interest rate is at the level of 25% currently and it was left untouched at the last SHNB meeting. Inflation forecast this year amounted to +0.9% (preliminary value: +0.7%), in 2011: +1.0% (preliminary value +0.9%), in 2012 – about +2.2%.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 13.08.10: NZD: New Zealand Dollar regains on Friday from the yesterday’s fall

New Zealand Dollar demonstrates rebound following a plunge earlier at the Forex currency market at the end of the week.
Short term trend for the NZD/USD seems upward; medium-term trend remains downward.
Support levels: 0.7060, 0.7025.
Resistance levels: 0.7355, 0.7400.
The following New Zealand data was released today:
– Retail sales in June: +0.9% m/m (forecast: +0.6%) against +0.4% m/m in May.
In general the situation in the county’s economy remains unchanged.
Interest rate is at the level of 3.0% per annum in New Zealand now. Two weeks ago the Reserve Bank of New Zealand raised the interest rate for the second time at a run – to 25 basis points, then an interval in the sequence of the rises was announced. “Cessation of the further monetary incentive measures is appropriate. The pace and scope of the further rate increases is likely to be more moderate than anticipated in the June statement”, said the Head of the Bank, Alan Bollard in his comment. He stressed that previous NZD growth runs counter to the plans to mitigate New Zealand economy prospects. “Growth in the economies of our trading partners proved to be better than we predicted, however outlooks have worsened. Although prices of the raw materials are still high, they became more moderate”.
The data released last Thursday showed unexpected growth of unemployment rate in QII in New Zealand, therefore domestic demand in the country remains limited and economy does not receive additional support for the growth, as has been expected by the Reserve Bank of New Zealand.
Labour market growth in the country has apparently faced some difficulties, which the RBNZ passed over in silence while saying that pace of the interest rate increases will be moderate in the future. In this regard an interval in the chain of the interest rate increases can be long lasting.
It should be noted that in general the NZD is quite attractive for the investments at Forex considering current drawdown; it is probable that investors’ interest in the currency will revert as soon as the situation with the U.S. economy clarifies.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 13.08.10: JPY: JPY growth can resume despite the lull in pairing with the USD

At the Forex currency market on Friday the Japanese Yen rate stands still – investors follow the officials’ statements. However market believes that the Yen has chances to go to the minimum of April 1995
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes up, giving grounds for a pair buy signal. Stochastic Oscillator has not formed a clear signal yet.
Forex recommendations: off the board.
Feasible event scenario at Forex: in case of breakdown at the level of 85.50 the pair will go up and investors’ targets will be the level of the year 1995, which is 79.75. If not - consolidation will continue close to the current levels.
The minutes of the Bank of Japan meeting, held on 14-15 July emphasized that growth and decline risks in economy are balanced currently; however the risks now seems higher than in April this year.
The Bank of Japan members drew attention to the fact that the downside risks in the second half of this year will prevail. The Yen rate as well as the shares markets shall be closely monitored, says the document.
It became known this morning that Japanese Prime-Minister Khan and the Head of the Bank of Japan Shirakawa has scheduled a meeting for the next week to discuss the ways to manipulate expensive Yen.
Japanese authorities fear that JPY consolidation at Forex will become one of the factors, affecting national economy recovery pace. Currently expensive JPY reduces exports level. Finance Minister Deputy Motohisa Ikeda stated earlier that the government would like to avoid this. The official noted earlier that Yen’s growth can jeopardize the growth of the GDP levels. Experts believe that the pressure on the Bank of ponies can now be amplified by the Prime Minister Khan. “If Yen continues to demonstrate rapid growth, pressure on the Bank of Japan is likely to increase. It seems that the Government intends to take all efforts to prevent this situation” - says Societe Generale SA.
On Wednesday last week Japanese Minister of Finance Mr. Noda emphasized once again that authorities closely monitor currency fluctuations; investors still believe that the economy in the country of the rising sun is stable enough to be impacted by the expensive national currency. It is exports in Japan which is affected in the first place, as it actually shoulders the burdens of the domestic economy recovery after the recession.
It was also Noda who stated earlier that currency markets have the right to fix currency exchange rate by themselves. The Minister was not alerted by the expensive Yen or its possible impact on the Japanese economy. The politician said on Tuesday that in general Yen’s growth affects exports decline and government economic growth strategy makes references to the necessity of preventing excessive growth of the Yen. Noda also noted that currency abrupt and random movement is very undesirable for the economy.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 16.08.10: Investors are not ready to buy Euro

At the Forex currency market on Monday morning the pair EUR/USD is traded close to the last week lows, consolidating near the achieved levels.

By 9:40 Moscow time the Euro is at 1.2822 against the closing session level of 1.2829 on Friday.

Thus the Unified European currency is still under the pressure amid investors’ fears regarding the in situation Eurozone which is not very positive.

As for statistics - the day is going to be quite today; investors’ attention will be drawn to the last month CPI index in Eurozone.

The Japanese Yen will continue to be the hero of the day; market participants take refuge in it amid global instability.

Most likely the pair EUR/USD will be in the range of 1.2750-1.2940 on Monday trading session.