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[LF.Anastasia]

GBP: British Pound tries to rehabilitate after the fall

At the Forex currency market the British Pound Sterling is traded slightly upward this morning after a sharp fall yesterday.

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 has reached oversold zone, however it has not formed a signal either.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5560 the pair will go to 1.5650 and 1.5690. If the level of 1.5510 is exceeded, traders’ targets will be the levels of 1.5470 and 1.5430.

Yesterday’s statistics did not provide any support to the Pound, on the contrary, along with the external background it became a catalyst for sale.
Thus, the UK unemployment rate in QIII increased to 7.9% against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed reduced in Great Britain only by 1.2 thousand in November against expected reduction by 3 thousand.


Nevertheless, level of average wages in the UK rose by 2.2% against the level of 2.1% in September.
Statistics clearly showed that companies have been slow in hiring new employees; as long as British economic outlooks are obscure and authorities continue to implement full scale reduction of budget expenses.

It became known earlier that inflation in the UK increased by 0.4% (+3.3% y/y) in November against the growth by 3.2% y/y in October. The fact, that the rate has been growing for the ninth consecutive month made economists worried. It is possible that the Bank of England will have to raise interest rate earlier to demonstrate that the inflation is under control.

Interest rate is at the level of 0.50% per annum currently, the decision to leave it unchanged was made a week ago.

 

[LF.Anastasia]

JPY: Japanese Yen is traded inactively

At the Forex currency market the Japanese Yen is traded upward on Thursday, partly smoothing over yesterday’s fall. Prospect of future trades for Japanese Yen still seems ambiguous.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it began to descend, giving grounds for a pair sell signal. Stochastic Oscillator is giving an antipodal signal on Thursday, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 84.40 the pair will go to 85.00 and 85.40. If the level of 84.10 is exceeded, traders’ targets will be the levels of 83.70 and 83.40.

In general, macro economic situation in Japan remains unchanged. Vice Minister of Finance Mr. Sakurai noted this morning that while drafting country’s budget we should turn out mind on long term capital gain.

Investors’ attention was focused on Tankan report which showed decline for the first time in 7 quarters – up to the level of 5 against the previous level of 8 and the forecast of 3. Quarterly report of the Bank of Japan which shows sentiments in the business circles of the country once again confirmed the fact that Japanese indicators of QIV will be weak, which will indicate downturn in economy. Market believes that Tankan indicator will go down to -2 by March 2011 which will mean that pessimists dominate over optimists in the business-class of Japan.

Previous long awaited Japanese GDP data for QIII looks fabulous against this background. 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, the rise in index was promoted by the growth in private sector consumption, which usually accounts to about 60% of GDP. Special demand was observed in the energy-efficient cars for the reason that period of subsidy provided for them will expire soon. It is unlikely that we will be able to see similar results in QIV.

 

[LF.Anastasia]

CHF: Swiss Franc determines movement direction

At the Forex currency market on Thursday Swiss Franc rate is traded close to the starting session levels.

Forex forecast: MACD indicator is in parallel with the signal line for the pair USD/CHF, not giving a clear signal. Stochastic Oscillator is in the oversold zone, not giving a clear signal either

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9690 the pair will go to 0.9720 and 0.9760. If the level of 0.9650 is exceeded traders’ targets will be the levels of 0.9610 and 0.9560.

The main Swiss news today is that Swiss National Bank has maintained quarterly rate Libor in the previous target range of 0-0.75%, as expected by market. The index was revised in March 2009 last time when it was reduced by 0.25%.

In the follow- up comments the head of SNB Mr. Hildebrand noted that deflation risks in Switzerland are the negative factors for the country’s economy and worsening of the crisis situation in Eurozone exerts pressure on recovery rates of Swiss economic system. According to him Swiss economy will slow down in the coming quarters due to combination of factors.

Hildebrand also stressed that it is not very easy to reduce currency risks, however he did not comment on possibility of currency intervention.
Recent Swiss statistics was contradictory: producer prices and import prices in Switzerland declined by 0.2% m/m in November against expected growth by 0.1%. 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 indicating stability.

 

[LF.Anastasia]

AUD: Australian Dollar is successfully regaining from previous fall

At the Forex currency market the Australian Dollar rate is regaining successfully from the fall of the mid-week, supported by the generally quiet external background.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD; however it goes up, giving grounds for a pair buy signal. 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 0.9880 the pair will go to 0.9940 and 0.9980. If the level of 0.9810 is exceeded traders’ targets will become the levels of 0.9770 and 0.9720.

Australian macro-economic environment is uneventful today; news of secondary importance was published this morning: Index of expectations on consumer inflation in December: +2.8% against +3.1% in November.

Growth of AUD was caused by quiet external background and high oil prices. As for the domestic economic situation in the country; it remains almost unchanged.

Thus, 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. 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.

In addition, it became known earlier that retail sales in October amounted to-1.1% m/m against +0.1% in September; 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.
Interest rate in Australia is at the level of 4.75% per annum now.

 

[LF.Anastasia]

GBP: In regards to Pound: it is better to stay away from the market

At the Forex currency market situation for the Pound is still confusing: amid ambiguous external background and mixed UK statistics, the Pound successfully regained part of losses, however the situation for the pair GBP/USD still remains obscure.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5560 the pair will go to 1.5650 and 1.5690. If the level of 1.5510 is exceeded, traders’ targets will be the levels of 1.5470 and 1.5430.

The UK statistics released on Thursday was generally good; however its interpretation by the economists is not too cheerful: retail sales increased by 0.3% m/m (+1.1% y/y) in November which is a positive indication. Although this piece of news has not changed very much the whole picture in Great Britain.

We would remind that according to the statistics, released earlier, inflation in the UK increased by 0.4% (+3.3% y/y) in November against the growth by 3.2% y/y in October. The fact, that the rate has been growing for the ninth consecutive month made economists worried. It is possible that the Bank of England will have to raise interest rate earlier to demonstrate that the inflation is under control. Interest rate is at the level of 0.50% per annum currently, the decision to leave it unchanged was made a week ago.

The UK unemployment rate in QIII increased to 7.9% against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed reduced in Great Britain only by 1.2 thousand in November against expected reduction by 3 thousand.

Nevertheless, level of average wages in the UK rose by 2.2% against the level of 2.1% in September. Thus, statistics clearly showed that companies have been slow in hiring new employees; as long as British economic outlooks are obscure and authorities continue to implement full scale reduction of budget expenses.

It is interesting that to date 52% of respondents expect that the Bank of England will raise interest rate over the next 12 months: in August the index amounted to 48.5%

 

[LF.Anastasia]

CHF: Swiss Franc is balancing in indecision again

At the Forex currency market Swiss Franc rate is trying to go up, however technical signals do not indicate full picture of prospects for the pair USD/CHF.

Forex forecast: MACD indicator for the pair USD/CHF has crossed the signal line and merged with it which prevents from forming a signal. Stochastic oscillator is in the oversold zone and has not formed a clear signal either.

Forex recommendations: off the market.

Feasible event scenario at Forex: the pattern remains unchanged, in case of breakdown at the level of 0.9690 the pair will go to 0.9720 and 0.9760. If the level of 0.9650 is exceeded, traders’ targets will be the levels of 0.9610 and 0.9560.

At the meeting on Thursday Swiss National Bank decided to maintain quarterly rate Libor in the previous target range of 0-0.75%, as had been expected by market. We would remind that the index was revised in March 2009 last time when it was reduced by 0.25%.

In the follow- up comments the head of SNB Mr. Hildebrand noted that deflation risks in Switzerland are the negative factors for the country’s economy and worsening of the crisis situation in Eurozone exerts pressure on recovery rates of Swiss economic system. According to him Swiss economy will slow down in the coming quarters due to combination of factors. Hildebrand also stressed that it is not very easy to reduce currency risks, however he did not comment on possibility of currency intervention.

In addition, it became known that SNB has reduced positions in the Euro.
In general the head of the Bank did not say anything that would have been fundamentally new, however he once again draw attention to the high rate of the CHF and negative external factors.

Meanwhile, the situation in Swiss economy is contradictory at the moment: 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), although it is moderate at the moment, however it is a positive factor for the economy, indicating stability. However producer prices and import prices in Switzerland declined by 0.2% m/m in November against expected growth by 0.1%. Unemployment rate remained at the level of 3.6% in November which agreed with the forecast.

 

[LF.Anastasia]

EUR/USD: Euro is going up at the end of the week amid tranquil external background

The pair EUR/USD is traded upward at the Forex currency market on Friday morning, due to the news that Irish aid plan in the amount of 22.5 billion euro was approved by ICF and also due to support provided by information about outcomes of the EU summit.
By 11.45 Moscow time the Euro is at 1.3299 against trading session yesterday at around 1.3230.

Market assessed impartially the data released yesterday about the U.S unemployment benefit requests; today external background is tranquil as a whole; publication of the data, which would have been capable to bear influence on the trading session, is not expected.

As a result of the last summit of the EU, leaders of the participating countries made a declaration of readiness to take measures to ensure stability in the region; they also stressed the importance of efforts to reduce budgets of the countries.

Most likely the pair EUR/USD will be in the range of 1.3200-1.3400 at the trading session on Thursday.

 

[LF.Anastasia]

JPY: Japanese Yen is making attempts to grow again

The Japanese Yen rate continues to demonstrate eagerness to grow at the Forex currency market on Friday.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY; however it goes down, creating conditions for sales of the pair. Stochastic Oscillator has left the oversold zone on Friday and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 83.80 traders’ targets will the levels of 83.60 and 83.00.

Macro-economic background in Japan is quiet today; minor news, published this morning, showed that average level of wages in Japan (revised value) increased by 0.5% y/y in October against preliminary estimate of +0.6% y/y

In other respects, the situation in Japanese economy has remained unchanged.
Previous long awaited Japanese GDP data for QIII looks fabulous against this background. 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, the rise in index was promoted by the growth in private sector consumption, which usually accounts to about 60% of GDP. Special demand was observed in the energy-efficient cars for the reason that period of subsidy provided for them will expire soon. It is unlikely that we will be able to see similar results in QIV.

Investors’ attention was focused on Tankan report yesterday, it showed decline for the first time in 7 quarters – up to the level of 5 against the previous level of 8 and the forecast of 3. Quarterly report of the Bank of Japan which shows sentiments in the business circles of the country once again confirmed the fact that Japanese indicators of QIV will be weak, which will indicate downturn in economy. Market believes that Tankan indicator will go down to -2 by March 2011 which will mean that pessimists dominate over optimists in the business-class of Japan.

 

[LF.Anastasia]

EUR/USD: Euro started this week with decline

The pair EUR/USD is traded with decline on Monday morning amid expectations of the revised data of the U.S. GDP for QIII.

By 9.20 Moscow time the Euro is at 1.3175 against closing session level of 1.3189 on Friday.

Data on the U.S GDP index for QIII will be published on Wednesday which is expected to be better than preliminary assessment; this week is going to be shorter, since trading floors will be closed on Friday in the USA and in several other countries.

The day is going to be uneventful today in terms of macro-statistics.

Most likely the pair EUR/USD will be in the range of1.3080-1.3290 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound Sterling is undetermined at the beginning of the week

At the Forex currency market the British Pound Sterling is close to the opening level on Monday amid stable external background.

Forex forecast: MACD indicator is in the negative area for the pair and it is moving along signal line, not forming a clear signal. Stochastic Oscillator has come into the oversold zone and is not giving a clear signal either.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5530 the pair will go to 1.5580 and further to 1.5640. if the level of 1.5450 is exceeded, traders’ target will be the levels of 1.5410 and 1.5360.

The Bank of England is not yet able to keep clear of the European issues – earlier the regulator has repeatedly expressed the intention to help and on Friday he signed an agreement with the ECB about creating a temporary swop-lines to support Ireland; as a part of this document the Bank of England can offer its European counterpart about 10 billion pounds which would be a safety component of the ECB program.

As it is noted in the studies conducted by Markit company, sentiments of the British consumers have become less pessimistic; thus, current financial situation does not seem fatal to buyers; nevertheless no one has changed gloomy forecasts. Conclusions are made on the basis of the index of financial state of households, where the balance of households that are satisfied with their financial state has increased to the level of 39.9 against 38.9 in November. Although the indicator is located bellow the borderline level of 50 points.

Inflation in the UK increased by 0.4% (+3.3% y/y) in November against the growth by 3.2% y/y in October. The fact, that the rate has been growing for the ninth consecutive month made economists worried. It is possible that the Bank of England will have to raise interest rate earlier to demonstrate that the inflation is under control. Interest rate is at the level of 0.50% per annum currently, the decision to leave it unchanged was made a week ago.
We would remind that the UK unemployment rate in QIII increased to 7.9% against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed reduced in Great Britain only by 1.2 thousand in November against expected reduction by 3 thousand.