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[LF.Anastasia]

GBP: British Pound continues to recover

At the Forex currency market the British Pound Sterling rate continues to grow, exceeding the level of 1.6082.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator is giving a pair buy signal today, being in the neutral zone.

Forex recommendations: if current sentiment is maintained, buyers’ targets will be the levels of 1.6140 and 1.6160. However, it is worth noting that at 12.30 Moscow time, consumer prices index in the UK will become known, which can affect forces alignment in the pair.

As the study, made by CEBR, the Center of Economic and Business Research, said, the clouds continue to thicken over the British real estate market, which was especially notable last month. Thus, according to the Center’s estimates prices for houses will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.

Analytics of the Center believe that the rise in prices can start in 1012 gradually, with the easing of credit conditions in the country.

As the newspaper “The Telegraph” said yesterday, British inflation feels under 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.

 

[LF.Anastasia]

CHF: Swiss Franc is on the way to consolidation

At the Forex currency market Swiss Franc rate continues to grow on Tuesday, keeping up the trend, which started earlier this week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF; it has come close to the signal line and is ready to cross it upward, confirming a previous buy signal for the pair. Stochastic oscillator has come out of the overbought zone and is giving a pair sell signal.

Forex recommendations: considering external background we can expect that bullish sentiments will intensify and in this case traders’ targets will be the levels of 0.9625 and 0.9580.

In general the situation in Swiss economy remained unchanged.

It became known earlier that 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.

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.

Economic situation in Switzerland looks ambiguous. 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.

On Thursday this week, the data on economic expectations index ZEW in February will be released, (forecast -10.0, previous value-18.4).

 

[LF.Anastasia]

JPY: Japanese Yen reverted to decline

At the Forex currency market the Japanese Yen rate started to decline again.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, continuing to go up and giving a pair buy signal. Stochastic oscillator remains in the overbought zone, moving in parallel to the time axis and confirming a pair buy signal.

Forex recommendations: in case of breakdown at the local highs, buyers’ targets will be the levels of 84.00 and 84.30.

As it became known on Tuesday, at the last meeting the Bank of Japan decided to keep interest rate unchanged, in the range of 0-0.1% as expected. Nevertheless the regulator reported that he increased economic assessment, which became the first such factor over 9 months.

According to the regulator Japanese economy is overcoming a recession stage amid increased rates of exports and other constituents. The head of the Bank Mr. Shirakawa said today that GDP in the country can show acceleration in the current quarter due to the increased demand from abroad.

Macro-economic data released yesterday showed that actual GDP reduced by 0.3% q/q, in QIV, 2010,1.1% y/y (forecast -2.0% y/y); index of capital expenditures rose by 0.9% q/q in QIV against +1.5% in QIII. Thus, the most important publication early this week - 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.

 

[LF.Anastasia]

AUD: Australian Dollar determines movement direction

At the Forex currency market the Australian Dollar rate goes round in a circle, plunging down from time to time, trying to determine movement direction.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it started to decline, giving ground for a pair sell signal. Stochastic oscillator has come out of the oversold zone and is giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0050 the pair will go to 1.0075 and 1.0200. In case of breakdown at the level of 1.0000, traders’ targets will be the levels of 0.9960 and 0.9910.

In general, morning news about Chinese inflation level which was below expectation became a factor of support for the AUD today. Therefore, a stress associated with new measures to cool the economy of Celestial Empire was relieved partly. As we know, Australian economy is closely connected with Chinese economy, due to strong commercial ties.

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, and started to increase 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, the speech of the head of the RBA 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.

 

[LF.Anastasia]

CAD: Canadian Dollar continues to consolidate

The Canadian Dollar rate continues to demonstrate steady growth for the third consecutive session at the Forex currency market, approaching local highs once again.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and started to go down again, giving a pair sell signal. Stochastic Oscillator has gone to the oversold zone today, confirming a pair sell signal.

Forex recommendations: taking into account external background and sentiments at the market sales for the pair can be continued with traders’ potential targets at the levels of 0.9800 and 0.9760.

Representatives of the Ministry of Finance announced at the end of January that creation of new jobs should be continued in the country; however after the recession period Canada looks more powerful than any other country of Big Seven.

It became known earlier levels of export in the country increased by 9.7% and imports- by 0.7% in December. In addition, trade surplus in Canada amounted to 3.0 billion CAD in December.

The meeting of Bank of Canada was held in January where the regulator decided to keep interest rate unchanged, at the level of 1%. Given the non-uniform statistical data on the nearest neighboring country, the USA, a step is perfectly logical.

According to the experts from the International Monetary Fund, Canadian economy will grow by 2.3% y/y in the current year; this was a downgrade compared with the forecast of October (+2.7% y/y).

At the same time IMF expects that in 2012 Canadian economy will increase by 2.7%. The exact figures of the GDP growth in the country will be published on 28 February but meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

As for the exchange rate of the Canadian Dollar in the current year, IMF believes that if average prices for the oil will be maintained at about 90 dollars for the barrel (in October- $79 per barrel), the CAD will consolidate with the help of fundamental support provided by the raw material economy of the country.

 

[LF.Anastasia]

EUR/USD: Euro started to recover amid external positive factor

The pair EUR/USD is traded upward at the Forex currency market after three days of significant decline and yesterday’s stabilization.
By 10.10 Moscow time the Euro is at 1.3554 against closing session level of 1.3487 yesterday.

Apparently interest to risk is coming back at the market, which is supported by positive factors in the Asian trading floors that are growing in the mid-week amid improving forecasts of economic recovery in Japan.

The day is going to be interesting in terms of economic publications: at 17.15 Moscow time the data on the rates of changes in the U.S. industrial production in January will become known (forecast +0.5% m/m). Most probably the market will regain yesterday’s ambiguous data on the U.S. economy today.

External background will remain the main driver for the market.

Most likely the pair EUR/USD will not go beyond the range of 1.3450-1.3620 at the trading session on Wednesday.

 

[LF.Anastasia]

GBP: British Pound continues to grow in the middle of the week

At the Forex currency market the British Pound Sterling rate continues to grow on Wednesday with the help of the support from fundamental factors received yesterday. This afternoon, the UK statistics is the scheduled for release, which can change forces alignment in the pair GBP/USD.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator continues to give a pair buy signal today.

Forex recommendations: if current market sentiments maintain buyers’ targets can become the levels of 1.6230 and 1.6260/70.

Investors are waiting for the inflation report from the Bank of England at 12.30 today, which will demonstrate economic situation. In addition data on a number of unemployed in January will be known at 13.30 and the Head of the Bank of England, Mervyn King will deliver a speech.

We would remind that statistics released yesterday showed that CPI level in the UK increased by 0.1% m/m (+4.0% y/y) in January against the growth by 3.3% y/y in December.

As the study, made by CEBR, the Center of Economic and Business Research, indicates, the clouds continue to thicken over the British real estate market, which was especially evident last month. Thus, according to the estimates of the Center, houses prices will drop by 1.7% in the UK this year versus estimates of growth by 2.2%, made in November. It is worth noting that the forecast was lowered up to 2014, to 9.1% against 16% previously.

Analytics of the Center believe that the rise in prices can start in 1012 gradually, with the easing of credit conditions in the country.

As the newspaper “The Telegraph” said earlier, British inflation feels under 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).

 

[LF.Anastasia]

CHF: Swiss Franc is still of interest to buyers

Swiss Franc rate continues to grow at the Forex currency market in the middle of the week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is ready to cross signal line from bottom upward, thus, maintaining a pair buy signal. Stochastic oscillator continues to give a pair sell signal, being in the neutral zone.

Forex recommendations: if current investors’ sentiment is maintained, traders’ targets will be the levels of 0.9575 and 0.9520 on Wednesday.

In general the situation in Swiss economy remains unchanged. Macro-economic background this week is as follows: the data on the index of investor economic expectations in February - ZEW will be released on Thursday, (forecast -10.0, the previous value-18.4).
It became known earlier that 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.

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.

Meanwhile, economic situation in Switzerland looks ambiguous. 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 sells well again

The rate of Japanese Yen goes up again in the mid-week, despite the fact that traders’ interest in safe assets is getting lower. An improved forecast of Nomura for Japanese economy has inspired traders.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is ready to cross signal line from bottom upward, maintaining a pair buy signal. Stochastic Oscillator tends to come out of the overbought zone today and is going to create a sell signal.

Forex recommendations: considering market sentiments we can assume that downward movement for the pair will intensify and in case of breakdown at the level of 83.50 the pair will go to 83.10 and 82.70.

Thus, experts of the Bank Nomura said today that the economy of the Country of the Rising Sun is out of the wood; the worst stage has been struggled through and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession.

As it became known on Tuesday, at the last meeting the Bank of Japan decided to keep interest rate unchanged, in the range of 0-0.1% as expected. Nevertheless the regulator reported that he increased economic assessment, which became the first such factor over 9 months.
According to the regulator, Japanese economy is overcoming a recession stage amid increased rates of exports and other constituents. The head of the Bank Mr. Shirakawa said today that GDP in the country can show acceleration in the current quarter due to the increased demand from abroad.

Macro-economic data released earlier showed that actual GDP reduced by 0.3% q/q, in QIV, 2010,1.1% y/y (forecast -2.0% y/y); index of capital expenditures rose by 0.9% q/q in QIV against +1.5% in QIII. Thus, the most important publication early this week - 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.

 

[LF.Anastasia]

AUD: Australian Dollar regains after sales

At the Forex currency market, the Australian Dollar rate goes upward on Wednesday partly smoothing over yesterday’s fall, amid general upswing at the currency market and traders’ interest to risk.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD however it goes down, giving a pair sell signal. Stochastic Oscillator remains in the oversold zone today, however tending to give a pair buy signal.

Forex recommendations: in case of investors interest to the purchase of the pair AUD/USD, buyers’ targets can be the levels of 1.0075 and 1.0200, if the level of 1.0050 is broken down.

As it became known today, leading indicator Westpac in Australia was at the level of 0.8% in December against invariable level in November.

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, and started increasing correction.

The head of the Reserve Bank of Australia Glenn Stevens noted earlier 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, the speech of the head of the RBA 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.

In general, the AUD is afloat due to the overall optimism; however medium term trend for the currency seems downward.