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[LF.Anastasia]

CHF: Swiss Franc consolidates steadily

At the Forex currency market Swiss Franc rate continues to recover steadily on Friday. Today’s inflation data also supported positive trend.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF however it moves along signal line not giving a clear signal. Stochastic oscillator gives a pair sell signal, being in the neutral zone.

Forex recommendations: if the current external background is maintained and in caste of breakdown at the level of 0.9910 the pair will go to 0.9850 and 0.9820.

The following Swiss data was released today:

– CPI in November: +0.2% m/m, (+0.2% y/y) against the forecast +0.1% m/m, (+0.1% y/y).

Inflation growth is moderate in Switzerland; however, at the moment it is a positive factor for the economy which indicates stability. This data will support CHF in short term.

It became known yesterday that GDP in Switzerland rose by 0.7% q/q (+3.0% y/y) in QIII against the forecast of +0.5% q/q (+3.1% y/y). The fact that Swiss economy is growing above expectations has confirmed our theory about stability in the country. It is clear that European problems will have an impact there, as well as they will affect Great Britain for example; however situation in Swiss economy seems steadier.

Sovereign risk in Europe has more negative sides than positive ones for the CHF at the moment, as investors have not figured out completely the future expectations. In general, November was quite favourable for Swiss currency and it increased by 3.25%. CHF rose by 3.25%. According to the data released earlier, employment in Switzerland excluding agricultural sector increased to 4.08 million people in QIII against the previous level of 3.97 million people. The data is positive for the domestic economy.

It became known on Tuesday that consumption indicator rose to 1.716 in October against the preliminary estimation of 1.695 in Switzerland.

The next meeting of SNB is scheduled for 16 December. We would like to recall that Interest rate in Switzerland has remained unchanged for 19 months already, at the level of 0.25% per annum.

 

[LF.Anastasia]

EUR/USD: Euro began the day with the rise

The pair EUR/USD is traded upward at the <a href="/" title="Forex currency market"><strong>Forex currency market</strong></a> on Thursday morning. By 10.25 Moscow time the Euro is at 1.3297 against closing session level of 1.3262 yesterday.

Negative factor for the USD is the decline in yield of the U.S. government bonds from six month highs. Economists note that despite the fact American economy has become stronger than it was before it still lacks power to ensure the riset of the USD.

The day is going to be eventful in terms of macro-statistics. Thus, a lot of news on the Eurozone countries is going to be released today; in the afternoon the data on a number of unemployment benefits applications in the USA will become known.

Most likely the pair EUR/USD will be in the range of 1.3220-1.3400 at the trading session today.

 

[LF.Anastasia]

GBP: British Pound Sterling tries to continue the growth

At the Forex currency market the British Pound Sterling rate made attempts to start growing, however the attempts have not been crowned with success.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, however it started to go up, giving grounds for a pair buy signal. Stochastic Oscillator is not giving a clear signal today.

Forex recommendations: if the current external background is maintained and in case of breakdown at the level of 1.5860, the pair will got to 1.5900 and 1.5950.

It became known today that Halifax prices for houses declined by 0.1% m/m, (-0.7%y/y) in November. The situation in the real estate sector still remains ambiguous; the data last Wednesday showed that houses prices in Great Britain declined by 0.3% m/m (+0.4% y/y) in November, as per Nationwide against the decline by 0.4% m/m.

It became known earlier that the UK houses prices as per Hometrack, reduced by 0.8% on monthly basis (-1.1% y/y). The situation in the sector continues to be ambiguous. Earlier the LSL/Acadametrics estimations showed that houses prices in England and Wales went up by 0.3% in October, the rise is going on for the sixth consecutive month, increasing by 6.1% on annual basis; analytics in the real estate sector contradict one another: Halifax stated that houses prices in October increased by 1.8%, Nationwide insisted that the indicator fell by 0.7%.

The Bank of England meeting will be held today; interest rate decision and comments on the current economic situation will be made at the meeting. Interest rate of the Bank of England is now at the level of 0.5% per annum.

Considering the above, the Pound movement will be limited until the announcement of the Bank’s decision.

 

[LF.Anastasia]

CHF: Swiss Franc rate continues to consolidate

At the Forex currency market on Thursday Swiss Franc rate continues the growth which started yesterday- the USD retreats due to players’ concern that American economy is not strong enough to recover quickly.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area however it goes down giving grounds for a pair sell signal. Stochastic Oscillator tries to identify a signal today, being in the neutral zone.

Forex recommendations: if the bearish sentiments for the pair ate maintained and in case of breakdown at the level of 0.9810 buyers’ targets will be the levels of 0.9775 and 0.9730.

The situation in Switzerland has not changed significantly yet.
Unemployment rate remained at the level of 3.6% in November which agreed with the forecast. Inflation in Switzerland demonstrates growth (CPI in November: +0.2% m/m, (+0.2% y/y) against the forecast +0.1% m/m, (+0.1% y/y)- it is moderate at the moment however it is a positive factor for the economy which indicates stability. This data will support CHF in short term.

It became known earlier that GDP in Switzerland rose by 0.7% q/q (+3.0% y/y) in QIII against the forecast of +0.5% q/q (+3.1% y/y). The fact that Swiss economy is growing above expectations has confirmed our theory about stability in the country. It is clear that European problems will have an impact there, as well as they will affect Great Britain for example; however situation in Swiss economy seems steadier.

Swiss Franc was fortunate last week –three days of Franc’s powerful growth has led the pair to the high level of 0.9710 – from where a lower border of the medium channel of 0.9640 is round the corner, and then a significant rise can start for the pair.

This week the Franc moves in opposition to the USD, as it has not developed its own trading idea.

 

[LF.Anastasia]

JPY: Yen is being corrected after the yesterday’s slump

The Japanese Yen rate resumed its growth at the Forex currency market on Thursday – investors’ interest in the USD is low due to the decline in the U.S. government bonds yield and traders have turned to the purchase alternatives.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it started to go down which gives ground for a pair sell signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in the current external background is maintained and the level of 83.60 is exceeded, traders; targets will become the levels of 83.40 and 83.00. The long-awaited data on the Japanese GDP level in QIII was released today. Real GDP was revised to +1.1% q/q (+4.5% y/y) against preliminary estimate of +0.9%.

It is interesting that, according to the Japanese Cabinet, rise in index was promoted by the growth in private sector consumption, which is usually about 60% of GDP. Special demand was noted in the energy-efficient cars for the reason that period of subsidy provided for them will expire soon.
However, economists do not console themselves with illusions that results of the fourth quarter will be as inspiring. On the contrary, all predictions are now reduced to the fact that the data in the current quarter will be weak, since the economy continues to decline.

As it became known on Tuesday, index of coincident indicators in Japan declined to 100.7 in October against expectations of 100.8. The data today demonstrated the second consecutive reduction of the indicator. The index of leading indicators fell for the fourth time in a row, to the level of 97.2.
Japanese Finance Minister Mr. Noda noted on Tuesday that the Yen could continue to grow, however he did not touch a topic of a possible intervention into the currency trading course. However to all appearance, Central Bank of Japan is not too much concerned about recent consolidation of JPY. Noda stressed however, that the regulator would continue to monitor trading process.

Note that this was the first comment, made by the monetary authorities about the rate of the Yen over the last month.

 

[LF.Anastasia]

AUD: Australian Dollar began to recover on Thursday

At the Forex currency market the Australian Dollar rate began to rise on Thursday following the decline during the two last sessions. Strong statistics on the labour market supported the currency.

Forex forecast: MACD indicator is in the negative area, however it started to ascend and giving a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.9880 the pair will go to 0.9915 and 0.9950.

Thus, employment rate in Australia demonstrates vigorous growth which is a clear indication of a good recovery rate of the domestic economy. According to the data released today employment rate rose by 54.6 thousand jobs in November; while unemployment rate declined to the level of 5.2% against the previous level of 5.4%.

The data pleased investors substantially and the rate of the AUD went up. The importance of the employment growth is difficult to overestimate: it will cause the rise in the consumer spending which will provide additional support to the Australian economy. This explains recent optimism of the head of the RBA Glen Stevens in regards to the outlooks for the economy.

On Tuesday morning a regular meeting of the Reserve Bank of Australia was held, where the regulator decided to keep current interest rate unchanged, at the level of 4.75% per annum. In general it agreed with the market expectations. The accompanying statement, summarizing the results of today’s meeting said that the rate of the AUD at Forex this year has consolidated considerably, reflecting high prices of raw products and expectations of the monetary policy progress in Australia. The RBA expects that inflation levels will change slightly in the coming quarters, although in the medium-term, inflation growth is possible. The regulator believes that current monetary policy complies is in full compliance with economic realities.

GDP in Australia increased by 0.2% on quarterly basis in QIII; while analytics had expected the rise by 0.5%; the growth over last quarter positioned as the lowest over the last two years, therefore GDP dynamics seems to be descending. However, the Australian Dollar rate can resume the decline in the medium term because investors’ concern about problems in Eurozone is still strong and the Euro is still too weak.

It became known earlier that retail sales in October amounted to-1.1% m/m against +0.1% in September and trade balance surplus in October was $2.625 billion. It also became known earlier that current account balance amounted to -А$7.83 billion in QIII against the forecast of -А$6.60 billion. All these factors will buck against the AUD.

 

[LF.Anastasia]

NZD: New Zealand Dollar stands still today

At the Forex currency market the New Zealand Dollar rate stands still on Thursday despite the decision made by the RBNZ that the interest rate would be kept at the current level and positive statistics of the neighboring Australia.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and it goes down, confirming a previous sell signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.7460 the pair will go to 0.7425 and 0.7400. Otherwise consolidation at the current levels will continue for the NZD/USD.

Thus, at the last meeting of the Reserve Bank of New Zealand the decision was made to keep the interest rate unchanged at the level of 3.0% per annum. The decision as a whole agreed with the market expectations, however further comments did not make investors happy.


The regulator noted that the rate of the monetary policy tightening is expected to be moderate in the next two years, as the earthquake which happened in the country recently (it was the strongest in the last 80 years) has significantly impacted the state of the national economy.

According to the head of the RBNZ Mr. Bollard: “The most reasonable at the moment will be to keep rates low until the moment when economic recovery becomes steadier and inflationary pressures will start to demonstrate sings of consolidation. In the next two years interest rate will rise in a more moderate pace than it had been expected earlier”.

It became known earlier that unemployment rate in New Zealand decreased to 6.4% in QIII against the previous level of 6.7% in QII. At the same time the change in the employment rate in QIII amounted to +1% against expectations of +0.5%.

 

[LF.Anastasia]

EUR/USD: Euro is supported by Chinese statistics this morning

The pair EUR/USD is traded slightly upward at the Forex currency market on Friday amid strong statistics on the Chinese economy. However, the currency has not gone beyond the narrow range for four days already.

By 10.00 Moscow time the Euro is at 1.3260 against the closing session level of 1.3238 yesterday.

The Euro has subsided by 1.2 % in pairing with the USD over a week; and by 9.3% since the beginning of the year against the basket of 10 currencies.
Negative factor for the Euro is reduction indicated by the Rating Agency Fitch of the ratings in Ireland: long term credit rating to BBB+, forecast is “stable” and short term rating PDR of foreign currency is up to F2.

However fears regarding Ireland in general have been fully incorporated in the current prices of the Euro and the pressure on the currency will intensify if new traits will emerge in the existing pattern.

The day is going to be eventful in terms of statistics, the same as yesterday. The U.S. statistics tonight will be of interest.

Most likely the pair EUR/USD will be in the range of 1.3190-1.3390 on Friday trading session.

 

[LF.Anastasia]

GBP: British Pound remains in the range

At the Forex currency market the British Pound Sterling rate is traded slightly upward on Friday, although the pair GBP/USD has been in the range for three days already and it still fails to go beyond it.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD, and it is moving along the signal line, not giving a clear signal. Stochastic Oscillator is in the oversold zone and is giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5840 the pair will go to 1.5900 and 1.5950. If the level of 1.5730 is exceeded, traders’ targets will be the levels of 1.5700 and 1.5770.

Yesterday the Bank of England decided to leave current interest rate unchanged at the level of 0.50% per annum, the volume of the assets redemption program was also left unchanged. These decisions agreed with the market expectations.

In addition it also became known that foreign trade deficit with the exception of the Eurozone countries was revised to the level of 8.4% billion pounds sterling. British ex-Prime Minister Gordon Brown believes that problems of Eurozone will have an impact on British economy. As long as the Eurozone fails to cope with the Euro decline, preconditions for a new crisis in the banking system will stem in the area. At the same time Eurozone is unlikely to handle this situation without losses and therefore, neighbors will be also involved too.

 

[LF.Anastasia]

CHF: Franc continues to grow on Friday; however the week is coming to an end rather unsuccessfully

Swiss Franc rate is traded upward at the Forex currency market on Friday, continuing the trend of the last two trading days. However, the week as a whole ends up with low results for the CHF.

Forex forecast: MACD indicator is in the positive area for the pair USD/CHF; however it goes down, confirming a previous sell signal for the pair. Stochastic oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 0.9810 traders’ targets will become the levels of 0.9775 and 0.9730.

The situation in Swiss economy has not changed fundamentally so far.

Unemployment rate remained at the level of 3.6% in November which agreed with the forecast. Inflation in Switzerland demonstrates growth (CPI in November: +0.2% m/m, (+0.2% y/y) against the forecast +0.1% m/m, (+0.1% y/y)- it is moderate at the moment however it is a positive factor for the economy which indicates stability. This data will support CHF in short term.

It became known earlier that GDP in Switzerland rose by 0.7% q/q (+3.0% y/y) in QIII against the forecast of +0.5% q/q (+3.1% y/y). The fact that Swiss economy is growing above expectations has confirmed our theory about stability in the country. It is clear that European problems will have an impact there, as well as they will affect Great Britain for example; however situation in Swiss economy seems steadier.

The next meeting of the National Bank of Switzerland is scheduled for 16 December; the quarterly level of interest rate is now in the range of 0-0.75%. The index was revised in March 2009 last time when it was reduced by 0.25%.