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CHF: Swiss Franc continues to rebound from historical peaks

At the Forex currency market Swiss Franc rate is traded downward on Friday, continuing to move away from the historical highs, reached earlier this week

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, giving a pair sell signal. Stochastic oscillator continues to give a pair buy signal, being in the neutral zone and approaching overbought area.

Forex recommendations: if current sentiment in the market prevails and in case of breakdown at the level of 0.9330, buyers’ targets will be the levels of 0.9360 and 0.9430. If upward breakdown does not take place, the pair will consolidate near the current levels.

Macro-economic background is quiet for the Franc today

Level of retail sales in Switzerland declined by 2.6% y/y in January against the fall by 0.8% in December; however external background still remains the main driver of the Franc’s movement, as well as possible withdrawal of the players from risks. It is the factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.

Yesterday’s statistics showed that the level of retail sales in Switzerland declined by 2.6% y/y in January against the fall by 0.8% in December. Probably, cold winter had its impact on the indicator. If the reason for the decline n sales is seasonality, then we will be able to witness recovery in the indicator in spring.

Indicators of last week showed that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

The Franc, which had been pushed upward by traders’ fears, just ignored the data of this week: real GDP in QIV: +0.9% q/q (+3.1% y/y) against the forecast of growth by 0.5% q/q (+2.8% y/y); PMI SVME rose to 63.5 points in February against the forecast of 60.5 points. Therefore, Swiss economy is strong and continues to progress along the recovery path.

 

[LF.Anastasia]

GBP: British Pound Sterling continues to hold on to local highs

At the Forex currency market the British Pound Sterling rate remains near the maximum price peak.

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 stays in the overbought zone today, maintaining a pair buy signal and at the same time giving grounds for an indicator’s reversal.

Forex recommendations: if investors’ positive sentiment is preserved and in case of breakdown at the level of 1.6340 the pair will go to 1.6390 and further to 1.6420. If a breakdown does not take place the pair will continue to consolidate close to the current levels.

The data on the house price index Halifax Bank of Scotland – will be made public this afternoon; traditionally the Pound responds perceptibly to this statistics, therefore forces alignment in the pair can change.

It is worth noting that representative of the Bank of England, Bin stressed yesterday that current rise in oil prices is a serious risk to the recovery of the British economy.

The UK data released this morning showed that houses prices reduced by 0.2% m/m (-2.7% y/y), in February, as per Hometrack estimates. The Pound did not respond to the statistics, continuing to keep eye on the external background. The UK statistics released on Tuesday demonstrated that houses prices continued to increase in February – by 0.3% m/m, according to Natianwide estimates. At the same time the index reduced by 0.1% on annual basis. According to the experts of the agency, recovery remains weak and real estate sector is in no hurry to grow up.

The fact that different agencies demonstrate different data indicates lack of unified approaches in estimation of the real estate market. Let’s wait for today’s statistics.

Last week was eventful in terms of the UK statistics: it became known on Friday that level of consumer confidence in Great Britain rose to -28 points in February, as per GfK/NOP estimates, against the previous level of -29 points. The news was moderately optimistic for the Pound; however it did not save the Pound from sales.

 

[LF.Anastasia]

EUR/USD: Euro concluded the week in high spirits

The pair EUR/USD is traded slightly downward at the Forex currency market on Friday after the rise yesterday.

By 9.45 Moscow time the Euro is at 1.3959 against closing session level of 1.3967 on Thursday.

Yesterday, the head of the European Central Bank Trichet said that he did not rule out that the rate can be increased in April amid growing inflationary pressure. However it should not be taken as the actual beginning of the monetary policy tightening. In fact, monetary politician has confirmed markets’ belief that the rate will be raised shortly. This became the main catalyst for the rise of the Euro above 1.39.

The rate of the European Central Bank was kept at the level of 1% this time.

The main macro-statistics block will be released in the afternoon on Friday and will be related with the U.S.: the U.S. unemployment rate in February (expected growth is to 9.1% against the previous 9%) will be released tonight, as well as the data on a number of jobs for past month (growth by 196 thousand against the rise by 36 thousand in January.

In general, positions of the Euro are quite strong at the moment.

Most likely the pair EUR/USD will not go beyond the range of 1.3850-1.3990 at the trading session on Friday

 

[LF.Anastasia]

NZD: New Zealand Dollar regains losses

At the Forex currency market the New Zealand Dollar rate regains on Tuesday after the fall to lows of ten- week. However, current growth of the pair NZD/USD shall be considered as a technical correction.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and is going down, confirming a previous sell signal for the pair. Stochastic Oscillator is coming out of the oversold zone today, starting to create a pair buy signal.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 0.7420, buyers’ targets will be the levels of 0.7445 and 07480.

In general, the situation in the economy of New Zealand remains unchanged.
The meeting of the Reserve bank of New Zealand is scheduled for 10 March, Thursday, therefore the rise in volatility is not excluded for the pair NZD/USD. Investors will be interested in the reaction of the NZRB on macro-statistics and comments.

Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.

Statistics released in february was mixed: index of industrial activity rose to the level of 53.7 in January against 53.2 in the previous period; producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively; consumer confidence index ANZ increased to 108.2 in February against 117.1 in January. In addition, Finance Minister of New Zealand said a week earlier that strong domestic currency did not support national economy, and consequently economy looks not quite competitive.

Thus, there are strong speculations at the market regarding the rate of the NZRB, which puts pressure on the NZD.

 

[LF.Anastasia]

AUD: Australian Dollar makes attempts to recover

At the Forex currency market the Australian Dollar rate tries to recover today after three days of decline. The pair AUD/USD still stays in the range of 1.0074-1.0186.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to fall, giving a pair buy signal. Stochastic Oscillator goes down in the neutral zone, giving a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0145 the pair will go to 1.0170 and 1.0190. If the level of 1.0100 is exceeded, traders’ targets will become the levels of 1.0090 and 1.0050.

Statistics, released on Tuesday morning, showed that index of business confidence increased to 14 points in February, as per NAB estimates, against the previous 4 points. Thus, after the flood in the state of Queensland earlier this year, the level of business confidence begun to recover.

However, it should be taken into consideration that retail sector, manufacturing industry and construction sector are in the difficult situation, while sectors of recreation and mining industry have been successfully recovering.

Interest rate is at the level of 4.75% per annum in Australia now. The meetings of RBA in 2011 will be held on 4 April, 2 May, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady. In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.
GDP in Australia rose by 0.7% q/q (+2.7% y/y) in QIV against the forecast of +0.6% q/q (+2.8% y/y). The economy had been able to strengthen before the flooding that struck the Green Continent, which was followed by tropical cyclone.

 

[LF.Anastasia]

JPY: Japanese Yen goes up, remaining in the range

At the Forex currency market the Japanese Yen rate goes upward slightly on Tuesday, staying, nevertheless in the five-day range of 81.94-83.04.

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

Forex recommendations: in case of breakdown at the level of 82.25 traders’ targets will be the levels of 82.00 and 81.75 today.

The following Japanese data was released today:
– Bank lending decreased by 2.0% y/y in February against -1.9% y/y in January;
– Money supply M2 in February increased by 2.4$ y/y against +2.3% y/y in January;
– Current account balance in January: -47.6% y/y (Y461.9 billion) against +30.5% in December:
– Index of economic observers in February: 48.2 against 44.3 in January.

According to the Japanese observers the worsening political situation is a long term negative factor for the Japanese Yen; it especially concerns Prime-Minister of Japan, Naoto Khan. Khan’s positions had shattered after the resignation of the Minister of Foreign Affairs, Maekhara. First of all, in case of Khan’s resignation there will be difficulties in adopting the law of repayment of the considerable public debts of the Country of the Rising Sun. Khan brings forward a draft bill on the issue of government bonds.

Chairman of the Bank of Japan Mr. Yagamuchi said yesterday that country’ economy shows signs of recovery: amid the growth of the developing markets, Japan also receives a catalyst to get out of hibernation

Yagamuchi also noted that current rise in commodity prices prevents from giving adequate forecasts

Interest rate of the Bank of Japan is at its lowest level of 0.1% per annum. The next meeting of the Bank of Japan is scheduled for 26 January. Other meetings of the regulator will be held on 16 March, 8 April, 23 May, 15 June, 16 July, 15 September, 14 October, 14 November, 13 December.

 

[LF.Anastasia]

GBP: Sales of British Pound will probably continue

At the Forex currency market the British Pound Sterling continues to be under pressure from traders on Tuesday, although the volume of sale is not high.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it going down, giving a pair sell signal. Stochastic Oscillator is going down in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6180, traders’ targets will be the levels of 1.6150 and 1.6110. If a downward breakdown does not take place, the pair will continue to consolidate close to the current levels.

As it became known today, real estate market in Great Britain is getting stable, as per the data from Royal Institute of Chartered Surveyors; balance of prices increased to -26 % in February against the previous value of -31%. At the same time price balance is still in the negative area, as long as house prices remain at the highs since summer last year.

The UK data released yesterday showed that balance of production volume in the manufacturing sector declined to 25 points in QI, as per EEF estimates, against the level of 33 points in QIV.

At the same time, balance of new orders in the manufacturing sector of the UK decreased to 20 points in QI against the previous level of 32 points.

The data released on Friday showed that house prices in the UK fell lower that lower than it had been expected in February: -0.9%, according to Halifax, against the growth by 0.8% in January. The prospect for the real estate market remains not the most positive: low employment along with the expectations of the interest rate increase does not contribute to consumer interest.
The UK data released earlier showed that houses prices reduced by 0.2% m/m (-2.7% y/y), in February, as per Hometrack estimates. The Pound did not respond to the statistics, continuing to keep eye on the external background. The UK statistics released on Tuesday demonstrated that houses prices continued to increase in February – by 0.3% m/m, according to Natianwide estimates. At the same time the index reduced by 0.1% on annual basis. According to the experts of the agency, recovery remains weak and real estate sector is in no hurry to grow up.

The fact that different agencies demonstrate different data indicates lack of unified approaches in estimation of the real estate market.
On Thursday, 10 March next meeting of the Bank of England will be held, where interest rate decision will be made - investors will be interested in the follow-up comments of the regulator. Meanwhile interest rate is kept at the level of 0.5% per annum.

 

[LF.Anastasia]

EUR/USD: Euro failed to reach level of 1.40

The pair EUR/USD is traded slightly upward at the Forex currency market on Tuesday morning after yesterday’s fall.

By 9.40 Moscow time the Euro is at 1.3977 against closing session level of 1.3967 yesterday.

The Euro failed to reach the level of 1.40 once again, although the major pair confidently has been going above the significant level during the day; it failed to consolidate there.

No important macro-statistics is scheduled to release today; therefore the main movement driver will be players’ expectation of the interest rate increase by ECB in April, as has it had been mentioned earlier by the head of the regulator, Trichet.

Most likely the pair EUR/USD will not go beyond the range of 1.3920-1.4030 at the trading session today.

 

[LF.Anastasia]

NZD: New Zealand Dollar awaits decision on interest rate

At the Forex currency market the New Zealand rate continues to grow slightly as part of the rebound after the previous fall into the area of local lows.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to go down, giving a pair sell signal. Stochastic oscillator continues to go up in the neutral zone and is giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.7425 the pair will go to 0.7460 and 0.7500. However vigilant shall be preserved, as the meeting of the Reserve Bank of New Zealand will start at 23:00 Moscow time.

Investors will be very interested in the reaction of the RBNZ on macro-economic data and comments.
Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.

Statistics released in February was mixed: index of industrial activity rose to the level of 53.7 in January against 53.2 in the previous period; producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively; consumer confidence index ANZ increased to 108.2 in February against 117.1 in January. In addition, Finance Minister of New Zealand said a week earlier that strong domestic currency did not support national economy, and consequently economy looks not quite competitive.

Thus, there are strong speculations at the market regarding the rate of the NZRB, which puts pressure on the currency.

 

[LF.Anastasia]

AUD: Australian Dollar is in the free fall

The Australian Dollar rate continues to decline at the Forex currency market on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go up, giving a pair buy signal. Stochastic Oscillator goes down today, continuing to give a pair sell signal and approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 1.0050 traders’ targets will be the levels of 1.0010 and 0.9960.

Today’s statistics showed that consumer confidence index in Australia declined to 104.1 points (-24%) in March, as per Westpac estimates, against the previous level of 106.6 points (growth by 1.9% in February).

Statistics released on Tuesday morning showed that index of business confidence increased to 14 points in February, according to NAB estimates, against the previous 4 points. Thus, after the flood in the state of Queensland earlier this year the level of business confidence begun to recover.

However, it should be taken into consideration that retail sector, manufacturing industry and construction sector are in the difficult situation, while sectors of recreation and mining industry have been successfully recovering.

Actually, all Australian economy has slowed down – which has been confirmed by statistics and this factor is negative for the AUD.
Finance Minister of Australia Mr. Swan described the rate decision as “good news”, clarifying that echoes of disaster can affect the result of QI, while fundamentals in Australia remains steady. In accordance with the RBA, inflation forecast for this year is in the range of 2-3%.
We would remind that GDP in Australia rose by 0.7% q/q (+2.7% y/y) in QIV against the forecast of +0.6% q/q (+2.8% y/y). The economy had been able to strengthen before the flooding that struck the Green Continent, which was followed by tropical cyclone.

Interest rate is at the level of 4.75% per annum in Australia now. The meetings of RBA in 2011 will be held on 4 April, 2 May, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.