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[LF.Anastasia]

Forex Analytics from LiteForex of 04.11.10: Dollar’s rise can be continued today

The pair EUR/USD is traded with no sharp movement at the Forec currency market this morning following dramatic surge yesterday.
By 10.50 Moscow time the Euro is at 1.4132 against closing session level of 1.4132 yesterday.
Activity was quite low at the currency market in the last two days as investors awaited the outcome of the U.S. Federal Reserve meeting. The meeting resulted in maintaining the interest rate in the target range of 0-0.25% per annum and QE program volume was declared in the amount of $600 billion which was above market expectations and the USD was drowned. The Euro which had been traded close to the level 1.400 for the whole day soared to 1.4153 immediately after the announcement of the FR decision.
A lot of statistics is scheduled to be released today – the interest rates decisions of the Bank of England and ECB will become known today, the U.S. employment data excluding agricultural sector will be released this afternoon, press conference of the ECB head Mr. Trichet will also take place today.
Most likely the pair EUR/USD will not go beyond the range of 1.4000-1.4200 on Thursday trading session.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 04.11.10: GBP: British Pound Sterling continues to grow, however prospects are obscure

At the Forex currency market the British Pound Sterling rate is traded upward on Thursday, continuing growing trend started earlier.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.6125 the pair will go to 1.6175 and 1.6200. In case of breakdown at the level of 1.6070, traders’ targets will become the levels of 1.6020 and 1.5970.
The Bank of England meeting is scheduled for today so traders will await the regulator’s decision on the interest rate and volume of the assets redemption program.
The data released on Thursday morning showed that Halifax houses prices in Great Britain increased by 1.8% m/m in October against expected growth by 0.6% m/m. GDP intensified following statistics release and consolidated.
It became known earlier that asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual rate of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which started in the early summer continues in November and December, the prices will have chances to drop by 1% by the end of the year.
It became known this week that consumer prices in Great Britain increased by 0.2% (+2.2% y/y) in October as per BRC estimation against the growth by 0.2% m/m (+1.9% y/y) in September.
Thus, the UK statistics is very contradictive which prevents from making far-reaching conclusions.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 04.11.10: CHF: Swiss Franc continues to consolidate at Forex, however purchase volume can be reduced

At the Forex currency market Swiss Franc rate is going up on Thursday as well as two last days, however the descend can be slowed down in advance of the statistics release from large countries.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it goes down, giving a pair sell signal. Stochastic Oscillator is giving an antipodal signal today, being in the oversold zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.9740 the pair will go to 0.9775 and .9820. If the level of 0.9700 is exceeded, traders’ targets will be the levels of 0.9650 and 0.9600.
As it became known today CPI index in Switzerland increased by 0.5% m/m (+0.2% y/y) in October against expected growth by 0.6% m/m (+0.3% y/y).
It also became known yesterday that retail sales index in Switzerland increased by 3.8% on annual basis in September against the previous growth by 0.1% .
Swiss National Bank representative Mr. Jordan noted on Wednesday that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector. We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.
In accordance to the average forecast GDP in Switzerland will increase by 3% in 2010 which is much higher than the average forecast in comparison with other European countries. At the same time inflationary levels will remain close to the lows. According to the official statistics GDP in Switzerland will increase by 0.9% on quarterly basis (+3.4% y/y) against the forecast of +0.8% (+2.6% y/y) Private consumption index in Switzerland increased to 1.86 in July against the previous level of 1.81 (revised data: 1.80).

 

[LF.Anastasia]

Forex Analytics from LiteForex of 04.11.10: JPY: Japanese Yen goes up again after a break

The rate of the Japanese Yen consolidates again after several days of break at the Forex currency market on Thursday.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it goes down giving a pair sell signal. Stochastic Oscillator is giving a similar signal being in the neutral zone.
Forex recommendations: If the current external background maintains and in case of breakdown at the level of 80.75, the pair will go to 80.40 and 80.20.
Japanese markets were closed yesterday due to the holiday. The Bank of Japan meeting is scheduled for tomorrow to take decisions on the interest rate levels (most likely they will be kept unchanged); it is also expected that volume and implementation plan of the assets redemption program to support country’s economy will be discussed there.
The minutes of the Bank of Japan last meeting was released this week. It says that some of the Bank members believe that the production volume can reduce sharply in Japan in QIV and the recovery time frame looks very blurry. Many members of the Bank are concerned about the high rate of the Yen.
Meanwhile, as it was noted earlier the Bank of Japan expects that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery.
As the data showed on Monday, average basic salary in Japan increased by 0.1% y/y in September against the previous decline by 0.2% which became the first growth factor over the last 25 months.
Japanese Finance Minister Mr. Noda noted earlier that currency market movement has a negative impact on the risks in economy as well as the concerns regarding external economy state. In his view, Japanese economy is stagnating now and its growth will be resumed only in case of the appropriate policy. He also stressed that authorities take all efforts to fight deflation.

 

[LF.Anastasia]

Forex Analytics of LiteForex of 04.11.10: NZD: New Zealand Dollar rate has been growing steadily for the sixth consecutive session

At the Forex currency market the New Zealand Dollar rate continues to grow on Thursday which has become the sixth session of the currency consolidation in a row.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and it goes up, confirming a pair previous buy signal. Stochastic Oscillator has not identified a clear signal today being in the overbought zone.

Forex recommendations: in case of breakdown at the level of 0.7880 the pair will go to 0.7950 and further to 0.7990.

As it became known on Thursday unemployment rate in New Zealand declined to 6.4% in QIII against the previous level of 6.7% in QII; at the same time the change in the employment rate amounted to +1% against expectation of +0.5%.

The NZD rate has accelerated its growth as a response to such positive statistics.

Worth noting that the New Zealand Minister of Finance confirmed on Thursday that high rate of NZD raises some difficulties for the national economy and exports and he expressed his concern in this regard.

Inglish is sure that unemployment rate will continue further decline in the country because unemployment rate is still too high.

We would remind that the Reserve Bank of New Zealand kept the interest rate unchanged at the level of 3% per annum for the second consecutive month at the last meeting taking into account that GDP in the country increased by 0.2% in QII.

New Zealand rating is now at the level of АА+ with the forecast “negative” as per rating agency Fitch.
According to the Reserve Bank of New Zealand governor Mr. Bollard, GDP growth in the country will continue in the future, however the process of the economic recovery will progress gradually. Bollard said also that inflationary pressure will intensify in the nearest future.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 04.11.10: AUD: Australian Dollar continues to strive for new records

The Australian Dollar rate continues to grow steadily at the Forex currency market on Thursday. The AUD has been consolidating for the sixth consecutive session altogether.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and it continues to grow, confirming a pair previous buy signal. Stochastic Oscillator is giving a similar signal being in the overbought zone.
Forex recommendations: if the current external background maintains, buyers’ targets will be the levels of 1.0120 and 1.0175.
At the moment the AUD rate at Forex is close to its highest level since 1983, when the currency floating rate was introduced. The U.S. Federal Reserve decision on the QE2 program volume which was higher than anticipated by the market has become an apparent catalyst for the AUD consolidation.
On Tuesday this week the Reserve bank of Australia decided unexpectedly to raise the interest rate to the level of 4.75% per annum against the previous level of 4.5%, which was a surprise to the market. The regulator noted in the comments that country’s economy is vulnerable to external influence and has too little spare capacity. The risks of inflation still remain and it will make sense to proceed with policy tightening more actively.
According to International Monetary Fund, the Reserve Bank of Australian shall raise interest rates as the inflation should be chilled out and the outlook risks should be reduced. As the IMF report stated the regulator agreed that if the downside risks will be reduced, the policy of the rates will dictate their growth.
IMF believes that the Australian economy looks quite strong due to the demand in iron ore from China. The IMF report also stressed that the AUD rate seems overrated by 5-15%.
Note that RBA expects that in the nearest future inflation will remain in the target range and reach the level of 2.75% by the end of the year. By the middle of 2012 the Bank expects inflation to be close to 3%.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 05.11.10: Euro is being corrected moderately however a chance to grow is still there

The pair EUR/USD is going down slightly at the Forex currency market on Friday after a surge of the last two days.
By 10.55 Moscow time the Euro is at 1.4200 against the closing session level of 1.4217 yesterday.
If in the first half of the trading session yesterday markets regained from the decision of the U.S. Federal Reserve to increase QE2 volume to $600 billion, then on Thursday night the U.S. statistics on the number of unemployment benefit applications was released which was weaker than the forecast (+20 thousand for a week ended on 30 October, to 547 thousand (forecast 443 thousand).
Yesterday the European Central Bank left the interest rate unchanged at the level of 1% which did not became the news for markets
Сегодня во второй половине дня выйдет блок статистики по США, который привлечет внимание инвесторов: данные по занятости вне с/х сектора, уровень безработицы за октябрь, средние уровни заработной платы и продолжительности рабочей недели, что в случае слабых показателей утопит USD.
Most likely the pair EUR/USD will not go beyond the level of 1.4000-1.4280 on Friday trading session.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 05.11.10: GBP: British Pound is being corrected at the end of the week

At the Forex currency market The British Pound Sterling rate is being corrected today following yesterday’s upswing.
Forex forecast: MACD indicator is in the positive area and it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator is not giving a clear signal today being in the overbought zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.6300 the pair will go to 1.6350 and further to 1.6400. If the level of 1.6250 is exceeded traders’ targets will be the levels of 1.6210 and 1.6175.
Yesterday the Bank of England decided to maintain the interest rate unchanged at the level of 0.50% per annum; assets purchase volume was also left unchanged.
The Bank noted that pace of the UK economic recovery slows down not as rapidly as it seems and the latest positive GDP data of the country is impressive. However economists do not exclude that additional stimulation of the economy will be carried out; it is also probable that such decision will be made in February.
The minutes of the Bank of England yesterday’s meeting will be published on 17 November.
The data released on Thursday morning showed that Halifax houses prices in Great Britain increased by 1.8% m/m in October against expected growth by 0.6% m/m. GDP intensified and started to consolidate after this statistics release.
It became known earlier that asking prices for houses reduced by 0.9% m/m (-0.1% y/y) as per Hometrack estimation. Economists pointed that pace of decline accelerated after some stagnation while the annual rate of decline had been observed for the first time in January this year. It became known last week that the UK houses prices as per Nationwide estimation continued to decline in October and fell by 0.7% on monthly basis (+1.4% y/y). Nationwide economists point that if the trend which started in the early summer continues in November and December, the prices will have chances to drop by 1% by the end of the year.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 05.11.10: CHF: Swiss Franc continues to grow despite domestic antagonisms

At the Forex currency market Swiss Franc rate is traded upward on Friday, continuing to move in the ascending trend.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it continues to go down confirming a pair sell signal. Stochastic Oscillator is in the oversold zone today and is not giving a clear signal.
Forex recommendations: in case of breakdown at the level of 0.9560 the pair will go to 0.9520 and further to 0.9450.
Member of the board of the Swiss National Bank Mr. Dantin noted yesterday that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however their recovery is very unstable.
In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland
Nevertheless the Franc continues to grow despite the fact that the world economy demonstrates signs of recovery although they are very weak.
Swiss National Bank representative Mr. Jordan noted on Wednesday that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector. We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.
As it became known yesterday CPI index in Switzerland increased by 0.5% m/m (+0.2% y/y) in October against expected growth by 0.6% m/m (+0.3% y/y); retail sales index in Switzerland increased by 3.8% on annual basis in September against the previous growth by 0.1%.

 

[LF.Anastasia]

Forex Analytics from LiteForex of 05.11.10: JPY: Japanese Yen continues to grow on Friday

The Japanese Yen rate continues to grow at the Forex currency market on Friday.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it goes down conforming a previous sell signal for the pair. Stochastic Oscillator is giving a pair buy signal being in the oversold zone.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 81.00 the pair will go to 81.40 and 81.90. In case of breakdown at the level fo80.60, traders’ targets will become the levels of 80.20 and 80.00.
The Bank of Japan announced that the interest rate will be maintained in the target range of 0-0.1% per annum; the head of the Bank Shirakawa stressed that the regulator is not going to compete with the FR in the issues of the monetary policy easing. He noted that the Japan does not have any serious financial imbalances; he also noticed that the regulator will closely monitor the effects of the assets redemption program. At the meeting which ended today the Bank of Japan considered the issue of buying mortgage investments trusts with the rating not lower than AA. In addition the Bank will purchase stock exchange funds of the Nikkei 225 Stock Average and Topix indices.
Meanwhile, as it was noted earlier the Bank of Japan expects that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery.
As the data showed on Monday, average basic salary in Japan increased by 0.1% y/y in September against the previous decline by 0.2% which became the first growth factor over the last 25 months.
Japanese Finance Minister Mr. Noda noted earlier that currency market movement has a negative impact on the risks in economy as well as the concerns regarding external economy state. In his view, Japanese economy is stagnating now and its growth will be resumed only in case of the appropriate policy. He also stressed that authorities take all efforts to fight deflation.