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[LF.Anastasia]

GBP: British Pound is under pressure of negative factors

At the Forex currency market the British Pound Sterling rate started to go down again today under the pressure from investors’ withdrawal from risk at the global capital markets, caused by the aggravations in the Middle East

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, giving a pair buy signal. Stochastic Oscillator has come out of the oversold zone and started to form a buy signal as well.

Forex recommendations: considering current external background-off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6140 the pair will go to 1.6200 and 1.6250. If the level of 1.6025 is exceeded, traders’ targets will be the levels of 1.6000 and 1.5950.

The key event of the week took place for the Pound yesterday - the meeting of the Bank of England, which, however, did not bring any surprises, since the rate was left at the level of 0.5% per annum as well as the volume of assets redemption program (200 billion pounds).

However, market believes that the regulator will have to start monetary policy tightening due to the high levels of inflation. According to estimates of the British economist Roger Bootle, the Bank of England will announce the rise of the rate in May this year.

Statistics released yearlier was mostly positive: Index of retail prices BRC in January: +2.5% y/y against +2.1% y/y in December; GDP forecast for 2011: CBI: +1.8% against +2.0% for the previous period. Attention should be focused today on the comments of the Bank of England following the meeting- it will be interesting to know if the regulator has plans to increase interest rate over the next six months.

The situation in the British economy remained almost unchanged. We would remind that the study of the National Institute of Economic and Social Researches “NIESR” which was made public earlier agreed with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, while the main target will still remain the control of consumer prices growth.

NIESR expects that the rate will be raised to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

 

[LF.Anastasia]

CHF: Swiss Franc gives way to USD

At the Forex currency market Swiss Franc rate continues to decline on Friday under the pressure of the strong USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it goes up, giving grounds for a pair buy signal. Stochastic oscillator still remains in the overbought zone today.

Forex recommendations: taking into account external background, the pair can continue to grow with the target at 0.9755 and 0.9785.

As it became known earlier CPI increased by 0.4% m/m, +0.3% y/y in January, against the forecast of -0.2% m/m, +0.6% y/y; consumer confidence SECO in January: 10 against preliminary level of 7. Inflation rate indicates slowdown of the recovery process in Swiss economy and high rate of the Franc is also a party at fault for it. State authorities have been made official comments on inflation factor yet.

In general, situation in the Swiss economy remained unchanged. We would remind that statistics on Swiss unemployment rate released yesterday showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand). According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.

Previous macro-economic statistics was mixed. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs).

On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

 

[LF.Anastasia]

JPY: Japanese Yen has continued to weaken for the eighth consecutive session

The Japanese Yen rate continues to retreat further and further in pairing with the USD at the Forex currency market on Friday under the pressure from positive American statistics and negative external background.

Forex forecast: MACD indicator is moving upward in the negative area for the pair USD/JPY on Friday and is giving a pair buy signal. Stochastic Oscillator continues to stay in the overbought zone today, giving a similar signal.

Forex recommendations: bullish sentiment remains in the market, due to which buyers’ targets will be at the levels of 83.90 and 84.30.

Japanese economic situation has not changed fundamentally at the end of the week.

WE would remind that the data released yesterday showed that net orders in machine-building sector in December: +1.7% m/m against preliminary level of -3.0% and the forecast of +5.0%; Members of Japanese Cabinet noted analyzing statistics that although the rise in machine-building sector has been observed, the sector is weak in general and it is too early to speak about stabilization.

Worth noting that representative of the Bank of Japan Mr. Kamezaki stressed earlier that economy in the Country of the Rising Sun will overcome the phase of deceleration by spring; nevertheless careful monitoring of the developments is still required at Forex, where sharp fluctuation of currencies remains unwanted.

Monetary politician anticipates high risk of downward pressure from the USA and Europe. In Japan downside and upside risks appear balanced at the moment. Kamezaki also emphasized that Japan shall resolve its debt problems quickly, before the country losses creditability.

The data released earlier was also positive:, current account balance in Japan increased by 30.5% y/y in December, to the level of +Y1.195 trillion. Maintenance of stability in economy is the most important magnet for investors, who transfer their assets into Japanese currency. As it became known this morning level of corporate bankruptcies in Japan reduced by 5.52% m/m in January, to the level of 1041. Reduction of bankruptcies and growth of the balance of payment surplus of the country are the indications of the national currency consolidation.

Note that representatives of the Japanese Concern Canon stressed today that current actual price levels of Japanese Yen are not justified. The company expects that the rate of the JPY will reduce to the level of 87 by July-December 2011.

 

[LF.Anastasia]

AUD: Australian Dollar fell to two-week lows

At the Forex currency market the Australian Dollar rate continues to weaken today and has already reached two-week lows under the pressure of investors’ withdrawal from risk. Position of the Reserve Bank of Australia is an additional factor of decline.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it is shifting to the movement along the signal line, thus, preventing a clear signal. Stochastic Oscillator has gone to the overbought zone today and continues to give a pair sell signal.

Forex recommendations: if current bearish sentiment maintains, traders’ targets today will be the levels of 0.9910 and 0.9850.

The head of the Reserve Bank of Australia Glenn Stevens noted today that he expects stabilization of the national economy, due to which, interest rate will remain unchanged for some time. He also said that economic growth of the Australian economy can be higher, that the forecast, despite negative impact of the natural disaster, that befell on the country at the beginning of the year.

Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.

According to HSBC observers, speech of the RBA head did not break new ground to the market: Central Bank is satisfied with the pace of economy and mining sector seems to be a driver for the recovery. It is not excluded that discussions about the rate increase will start as soon as the regulator gets familiarized with the CPI index for the QI.

Statistics released yesterday showed that employment rate in Australia increased by 24 thousand, to the level of 11.44 million in January, which was above the forecast of the economists, who expected the rise by 15 thousand.

In addition, unemployment rate remained at the previous level of 5.0%.

A number of part-time jobs increased in January (+32 thousand against preliminary value of +0.6 thousand)

Therefore, despite natural disasters that befell on the Green Continent at the beginning of the year, one of the major guarantors of economic recovery, employment sector, remains stable.

 

[LF.Anastasia]

EUR/USD: Pressure on Euro can intensify

The pair EUR/USD is traded slightly upward on Monday morning amid completion of a series of unrests in Egypt; however it still remains under the pressure in advance of the meeting of the Finance Ministers of Eurozone in Brussels today.

By 9.27 Moscow time the Euro is at 1.3549 against closing session level of 1.3548 on Friday.

Debt problems in Eurozone came in the forefront again for investors – on the one hand the yield of Portuguese government bonds began to grow, being close to a decade highs; on the other hand the meeting of the Eurozone’s Ministers of Finance will take place on 14 February which is supposed to discuss the index of reduction of public debt in several countries of the region.

The market believes that the meeting will not add anything new, showing once again reluctance of monetary politicians to adopt unpopular decisions.

In general, the day is going to be quiet in terms of macro-statistics, only at 14.00 Moscow time the data on industrial output in Eurozone in December will be released.

Most likely the pair EUR/USD will be in the range of 1.3470-1.3590 on Monday trading session.

 

[LF.Anastasia]

GBP: British Pound tries to grow at the beginning of the week

At the Forex currency market the British Pound Sterling rate makes attempts to grow on Monday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it started to go down slowly, indicating the beginning of a pair sell signal. Stochastic Oscillator still remains in the oversold zone, however it started to form a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6100 the pair will go to 1.6140 and 1.6180. If an upward breakdown will not take place the pair will continue to consolidate in the range.

It is worth noting that such development is quite possible, since the Pound will be tightly correlated with the Euro that is under significant pressure.

As the newspaper “The Telegraph” wrote today, British inflation has been experiencing increased pressure which will be demonstrated in the official statistics, scheduled for the release on Tuesday. Economist of the edition believes that index of retail prices can soar to the 20- year highs.

The key event for the Pound last week was the meeting of the Bank of England, which, however, did not bring any surprises, since the rate was left at the level of 0.5% per annum as well as the volume of assets redemption program (200 billion pounds). However, market believes that the regulator will have to start monetary policy tightening due to the high levels of inflation. According to estimates of the British economist Roger Bootle, the Bank of England will announce the increase of the rate in May this year.

Statistics released earlier was mostly positive: Index of retail prices BRC in January: +2.5% y/y against +2.1% y/y in December; GDP forecast for 2011: CBI: +1.8% against +2.0% for the previous period. “NIESR”, National Institute of Economic and Social Researches expect that the rate will be raised to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

 

[LF.Anastasia]

CHF: Swiss Franc reverts to growth

Swiss Franc rate is traded slightly upward at the Forex currency market on Monday after the sharp fall last week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it is still going up and is ready to cross signal line from bottom upward, continuing to give a pair buy signal. Stochastic oscillator remains in the overbought zone today, starting to form a pair sell signal.

Forex recommendations: taking into account external background, we can expect sales for the pair in case of breakdown at the level of 0.9685, in such state of affairs traders’ targets will become the levels of 0.9625 and 0.9575.

Worth noting, that bulls can be back for the pair USD/CHF.

In general economic situation in Switzerland remains unchanged. We would remind that statistics on Swiss unemployment rate released last week showed that the rate remained at the level of 3.5%. According to the estimates of the State Secretariat of Economic Affairs (SECO), unadjusted unemployment rate amounted to 3.8% last month. Thus, a number of unemployed in Switzerland totaled to 136.542 thousand (earlier: 140.090 thousand). According to UBS study the level of private consumption increased to the level of 1.7% in January, which above the average annual level.

In addition, CPI increased by 0.4% m/m, +0.3% y/y in January, against the forecast of -0.2% m/m, +0.6% y/y; consumer confidence SECO in January: 10 against preliminary level of 7. Inflation rate indicates slowdown of the recovery process in Swiss economy and high rate of the Franc is also a party at fault for it. State authorities have been made official comments on inflation factor yet.

Economic situation in Switzerland looks ambiguous so far. On the one hand levels of exports in the country increased by 10.9% y/y in December, the index rose mostly due to the demand for watches (export of watches in December: +25.5%, to 1.53 billion francs). At the same time trade surplus (supported by the data mentioned above) rose to 1.3 billion francs in December and levels of import increased by 10.5% y/y (14.2 billion francs). On the other hand, according to the Research Institute KOF, leading indicator fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05). Retail sales in December declined by0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January was at the level of 60.5 against 61.2 for the previous period.

 

[LF.Anastasia]

JPY: Japanese Yen is regaining part the last week losses

The Japanese Yen rate began to regain from the fall of the last week at the Forex currency market on Monday amid renewed interest of investors to safe assets

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however it is still going up, confirming a previous buy signal for the pair. Stochastic Oscillator has come out of the overbought zone today, giving grounds for a pair sell signal.

Forex recommendations: considering external background, sales can be increased for the pair today in case of breakdown at the level of 83.10 and after that traders’ targets will be the levels of 82.70 and 82.50.

The following Japanese data was released today:

– Actual GDP in QIV, 2010: -0.3% q/q, -1.1% y/y (forecast -2.0% y/y);

– Index of capital expenditures in QIV: +0.9% q/q against +1.5% in QIII.

Thus, the most important publication of today - Japanese GDP appeared to be better than expected, although this effect can be temporary since the economy of the country is still in a complicated situation.

Economists, however do not exclude that recovery of Japanese economy in coming quarters can be more dynamic, based on the stable exports levels. Note that net level of export reduced by 0.7% last quarter against the forecast of decline by 1.6. Finance Minister of Japan Mr Yosono noted this morning that economy in the Country of the Rising Sun would recover, however monetary authorities shall continue to monitor all possible risks carefully. In addition, Japan is planning to enter into close relations with China where economic growth has never come across problems.

Worth noting that representative of the Bank of Japan Mr. Kamezaki stressed earlier that economy in the Country of the Rising Sun would overcome the phase of deceleration by spring; nevertheless careful monitoring of the developments is still required at Forex, where sharp fluctuation of currencies remains unwanted.

At the same time monetary politician anticipates high risk of downward pressure from the USA and Europe. In Japan downside and upside risks appear balanced at the moment. Kamezaki also emphasized that Japan shall resolve its debt problems quickly, before the country losses creditability.

 

[LF.Anastasia]

AUD: Australian Dollar rate makes attempt to recover

As the Forex currency market the Australian Dollar rate has begun to grow today after three days of downfall last week.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, confirming a previous buy signal for the pair. Stochastic Oscillator has come out of the overbought zone today and is giving a similar signal.

Forex recommendations: taking into account investors’ sentiment, the AUD can continue to grow. If a breakdown takes place at the level of 1.0075, buyers’ targets will become the levels of 1.0100 and 1.0125. More distant bullish target is at 1.0200.

The data released on Monday showed that mortgage lending rose by 2.1% on monthly basis in December against the growth by 2.5% m/m in November. In general, the AUD did not pay much attention to this data, starting increasing correction.

The head of the Reserve Bank of Australia Glenn Stevens noted that he expected stabilization of the national economy, due to which, interest rate would remain unchanged for some time. He also said that economic growth of the Australian economy could be higher, that the forecast, despite negative impact of the natural disaster, that befell on the country at the beginning of the year.

Stevens believes in the support from strong economies of India, China, the USA, and risks – from the European economies.

According to HSBC observers, speech of the RBA head did not break new ground to the market: Central Bank is satisfied with the pace of economy and mining sector seems to be a driver for the recovery. It is not excluded that discussions about the rate increase will start as soon as the regulator gets familiarized with the CPI index for the QI.

Statistics released earlier showed that employment rate in Australia increased by 24 thousand, to the level of 11.44 million in January, which was above the forecast of the economists, who expected the rise by 15 thousand. In addition, unemployment rate remained at the previous level of 5.0%.

 

[LF.Anastasia]

EUR/USD: Euro has slowed its fall

The pair EUR/USD is traded in the negative area at the Forex currency market on Tuesday morning, however the fall of the Euro has been temporary suspended due to the publication of strong Chinese statistics.

By 10.00 Moscow time the Euro is at 1.3487 against closing session level of 1.3488 yesterday.

Immediately after the publication of the Chinese inflation data, which turned out to be better than the forecast, the Euro went above 1.35 and reached the local highs at 1.3527, however investors’ enthusiasm has dried out later and the currency returned to the opening level of the session.

Morning data on GDP in France did not provide support the Euro bulls either- the indicator increased only by 0.3% on quarterly basis in QIV against the forecast of growth by 0.6%.

In general, the main driver in determining direction in the pair EUR/USD is still external background, which remains ambiguous.

Most likely the pair EUR/USD will not go beyond the range of 1.3400-1.3550 at the trading session on Tuesday.