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[LF.Anastasia]

AUD: Australian Dollar tries to regain from local lows

At the Forex currency market the Australian Dollar rate is traded upward on Thursday, regaining from yesterday’s sales.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and descends, approaching the signal line and confirming a sell signal. Stochastic oscillator remains in the oversold zone today, maintaining a sell signal.

Forex recommendations: as part of correction the pair can reach the levels of 0.9900 and 0.9940, if the level of 0.9850 is definitely broken down. However it is worth remembering that aggressive traders can be back.

The indicators released yesterday showed that leading indicators Westpac declined by 0.1% m/m in January against preliminary forecast of +0.8% m/m. It is moderately negative signal for the Australian economy.

The major catalyst for sales of the AUD is investors’ risk aversion, caused by the events in Japan. The situation for the Australian Dollar remains negative. Statistics released last week showed that level of PPI in China increased by 0.8% m/m (+7.2% y/y) in February against the growth by 0.9% m/m a month earlier. Industrial output in China increased by 14.9% y/y in February; on the other hand, level of CPI in China rose by 1.2% m/m (+4.9% y/y) in February against the growth by 1.0% m/m in January. China is the major trading partner of Australia and slowdown in the economy of China will have a negative impact on the Green Continent.

As representatives of the Bank of Australia noted yesterday, economy of the country has been growing almost at the level of trend, and current moderately restrictive fiscal policy fits the external situation.

In addition, according to the RBA, shortage of cash in Australia now amounts to А$1.437 billion.

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.

 

[LF.Anastasia]

NZD: New Zealand Dollar begun to recover, however signals are pessimistic

At the Forex currency market the New Zealand Dollar rate rises on Thursday, smoothing over some yesterday’s losses.

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 descends on Thursday, giving a similar signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7230 the pair will go to 0.7250 and further to 0.7270. if the pair exceeded the level of 0.7155, targets for decline will be the levels of 0.7140 and 0.7110.

At the meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to 2.50% per annum. Investors, who had predicted possible reduction of the indicator, ignored its decrease by 25 basis points.

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.

Apparently, the RBNZ will start a new phase of monetary policy tightening soon.

The New Zealand Dollar still looks extremely weak after the falls both last week and this week, and developments in Japan as well as slow down of economy in China will prevent currency’s recovery even in part. The fact that investors continue to withdraw from risks is also disadvantageous for the NZD.

 

[LF.Anastasia]

GBP: British Pound Sterling grows up following the Euro

At the Forex currency market the British Pound Sterling rate grows up, correlating with the pair EUR/USD, which strengthens amid the decision of the “Big Seven” to conduct currency intervention by the Bank of Japan.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and continues to decline, however volumes are small. Stochastic Oscillator is growing in the neutral zone today, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 1.6160 buyers’ targets will be the levels of 1.6180 and 1.6210.

It became known today that level of consumer confidence in Great Britain declined to 38 points in February against the forecast of 47. Thus, the indicator has dropped to the record-breaking lows- for the British economy and for the Pound in particular, it is a not a good sign.

The UK Finance Minister Osborn said earlier that the country will continue to adhere to the selected financial policy; however last data on the labor market indicates weak economic growth. He thinks that current indicators in the labor sector demonstrate economic imbalance.

In order to relieve tension in economy it is necessary to resolve the issue of budget deficit as well.

The data released in the mid-week showed that unemployment rate ILO in the UK increased to 8.0% in November- January, while the forecast was 7.9%. At the same time level of unemployed ILO rose by 27 thousand on quarterly basis.

Following the meeting of the Bank of England last week it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Levels of inflation in the UK have been above the levels indicated by the regulator for over a year already, increasing pressure on the recovery of the British economy which is not too steady. The increase of VAT in the UK at the beginning of this year contributed to the growth of prices in British shops – the index rose to 24 month highs on annual basis in February.

 

[LF.Anastasia]

CHF: Swiss Franc moves away from historical highs

At the Forex currency market Swiss Franc rate is being corrected on Friday following the results of B7 and drop of investors’ interest in the safe harbor currencies.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, giving a pair sell signal. Stochastic Oscillator tends to come out of the oversold zone today and is starting to form a pair buy signal today.

Forex recommendations: in case of breakdown at the level of 0.9065 the pair will go to 0.9090 and 0.9110.

Swiss National Bank adopted measures of verbal intervention against the Franc yesterday: representatives of the SNB said following the meeting that strong currency is a hard burden for the economy and its inflated price will trigger a slowdown of economic growth – largely, due to the decrease of the export volumes.

The level of three-month LIBOR rate was left unchanged, at the 0.25%, as per the forecast.

According to the data released on Thursday volume of industrial output in Switzerland increased by 6.1% y/y in QIV.

It became known earlier that index of economic expectations ZEW in Switzerland increased to -13.5 points in March against the previous value of -17.2 points. It is a favourable indication for the national economy.

Statistics of the last week demonstrated that level of CPI in Switzerland increased by 0.4% m/m (+0.5% y/y) in February against the forecast of growth by 0.3% m/m. Thus, inflation in Switzerland has been increasing slightly so far, which on one hand, indicates economic recovery in the country and on the other hand does not give rise to discussions of the interest rate revision.

According to the data released earlier, unemployment rate in Switzerland reduced to 3.6% m/m in February against the previous rate of 3.8% m/m. In general it is a positive indicator for Swiss economy, which indicates that economic system of the country is being recovering steadily, despite high rate of the national currency.

 

[LF.Anastasia]

JPY: Japanese Yen fell under intervention

The Japanese Yen rate has weakened sharply at the Forex currency market on Friday due to the decision of the “Big Seven” about legality of the currency intervention by the Bank of Japan.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and volumes are increasing. Stochastic Oscillator has reversed in the neutral zone today and is going up, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 81.90 buyers’ targets will be the levels of 82.20 and 82.50.

So, countries of the “ Big Seven” agreed to start currency intervention together in order to ease pressure of the expensive Yen on the weak economy of Japan. Therefore, on 18 March authorities of the USA, Great Britain, Canada and ECB have joined the Bank of Japan- the intervention started at 9 am Tokyo time. Half an hour later the JPY collapsed by 3.1% in pairing the USD.

As representative of the Bank of Japan Noda said today, countries of B7 can conduct intervention, using the pair Euro/Yan. Currency intervention is not aimed at certain levels.

The situation remains tense in Japan: it became known yesterday that radiation background near the atomic power station in Fukishima is at extremely high level due to the accident at the power generating unit caused by the earthquake and tsunami. The situation has not changed much by the mid-day on Wednesday; the threat of high radiation background is still there.

It became known earlier that the Bank of Japan decided to pour Y3.5 trillion to the market to maintain liquidity level of one-day operations.

According to the information released on Tuesday, Central Bank of Japan is going to repurchase debt securities from the market in the amount of 2 trillion yen on 17-18 March. Closure of financial market due to stock market panic is not planned. In addition, starting from 22 March the Bank of Japan intends to offer bonds to the market in the amount of 300 billion yen – received funds will be spent for reconstruction.

Central Bank has already infused $87.5 billion to reassure stock markets where the panic started last week. Private Banks can count on this fund to issue short term loans.

In addition, the regulator will allocate $220 billion to rebuild national economy, which has not been strong before, and recent developments will become extremely hard burden for it.

 

[LF.Anastasia]

AUD: Australian Dollar regains with the help of market optimism

At the Forex currency market the Australian Dollar rate regains on Friday following the major currencies amid the decision of the B7 about currency intervention against the Yen.

Forex forecast: MACD indicator is at the intersection with the signal line for the pair AUD/USD and continues to descend, giving a pair sell signal. Stochastic Oscillator is going upward in the neutral zone today, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.9950 buyers’ targets will be the levels of 0.9975 and 1.0000.

The data released yesterday showed that leading indicators Westpac decreased by 0.1% m/m in January; while the forecast was +0.8% m/m. It is a moderately negative signal for the Australian economy.

The major catalyst for sales of the AUD is investors’ risk aversion, caused by the events in Japan. The situation for the Australian Dollar remains negative. Statistics released last week showed that level of PPI in China increased by 0.8% m/m (+7.2% y/y) in February against the growth by 0.9% m/m a month earlier. Industrial output in China increased by 14.9% y/y in February; on the other hand, level of CPI in China rose by 1.2% m/m (+4.9% y/y) in February against the growth by 1.0% m/m in January. China is the major trading partner of Australia and slowdown in the economy of China will have a negative impact on the Green Continent.

As representatives of the Bank of Australia noted earlier, economy of the country has been growing almost at the level of trend, and current moderately restrictive fiscal policy fits the external situation.

In addition, according to the RBA, shortage of cash in Australia now amounts to А$1.437 billion.

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.

Current rise in the AUD today is caused purely by the emotional component because fundamentally, the Australian economy has been experiencing not the best times.

 

[LF.Anastasia]

NZD: New Zealand Dollar goes up following investors’ optimism

At the Forex currency market the New Zealand Dollar rate goes up today, following general optimism in the market.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to decline, giving a pair sell signal. Meanwhile, Stochastic Oscillator has come out of the oversold zone and is giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.7290 buyers’ targets will be the levels of 0.7310 and 0.7340/50 today.

In general the situation in the New Zealand economy remains unchanged.

At the meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to 2.50% per annum. Investors, who had predicted possible reduction of the indicator, ignored its decrease by 25 basis points.

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%; %. Investors interpreted his opinion as a call to action and pressed the pair down to the local lows. The politician does not rule out that effect of the earthquake in the South of New Zealand in February can cause the rollback of the national economy into the state of recession.

Apparently, the RBNZ will start a new phase of monetary policy tightening soon.

The New Zealand Dollar still looks extremely weak after the fall both last week and this week, and developments in Japan as well as slow down of economy in China will prevent currency’s recovery even in part. The fact that investors continue to withdraw from risks is also disadvantageous for the NZD.

Growth of the NZD is founded only on the emotional reactions of the market today.

 

[LF.Anastasia]

Euro/USD: Rapid growth of Euro is supported by news on B7

The pair EUR/USD grows rapidly at the Forex currency market on Friday, supported by the decision of the “Big Seven” to conduct joint currency intervention at Forex against strengthening Yen. The pair Euro/Yan has been selected as a major pair and it dragged up the pair Euro/Dollar.

By 8.30 Moscow time the Euro is at 1.4071 against closing session level of 1.4018 yesterday.

Thus, the Euro has successfully exceeded the level of 1.40 yesterday and is traded steadily above significant target.

The day is not going to be eventful in terms of the U.S. and Eurozone macro-statistics today; therefore, apparently, traders will rely on the external background.

Most likely the pair EUR/USD will not go beyond the range of 1.3980-1.4120 at the trading session on Friday.

 

[LF.Anastasia]

Euro/USD: Euro remains at the peak value

The pair EUR/USD is traded slightly downward at the Forex currency market on Monday amid renewed political conflicts in Libya where France, the USA and Great Britain launched bomb and missile strikes on the air bases of government forces.

By 9.00 Moscow time the Euro is at 1.4172 against closing session level of 1.4178 on Friday.

G7 has taken effective measures on combating the rise of the Japanese Yen which triggered the growth of the pair EUR/JPY and dragged up the pair EUR/USD as well.

The day is going to be quiet in terms of macro-statistics,; market will pick up external signals; although developments in Japan and Libya have already been incorporated in the current prices in large extent.

Most likely the pair EUR/USD will not go beyond the range of 1.4090-1.4220 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound determines movement direction

At the Forex currency market the British Pound Sterling rate goes down slightly on Monday after two days of growth amid positive external background.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go down, giving a pair sell signal. Stochastic oscillator has come into oversold zone today and maintains a buy signal, however reversal is possible.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6230 the pair will go to 1.6250 and 1.6280. If the level of 1.6200 is exceeded, traders’ target will be the levels of 1.6170 and 1.6150.

As it became known today, house prices in Great Britain increased by 0.8% m/m (+0.9% y/y) in March. Observation shows that different agencies have different methods of price estimating, which results in the essentially different data.

The data released last week showed that unemployment rate ILO in the UK increased to 8.0% in November- January, while the forecast was 7.9%. At the same time level of unemployed ILO rose by 27 thousand on quarterly basis.
Following the meeting of the Bank of England it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Levels of inflation in the UK have been above the levels indicated by the regulator for over a year already, increasing pressure on the recovery of the British economy which is not too steady. The increase of VAT in the UK at the beginning of this year contributed to the growth of prices in British shops – the index rose to 24 month highs on annual basis in February.

Statistics released last Friday showed that level of consumer confidence in Great Britain declined to 38 points in February against the forecast of 47. Thus, the indicator has dropped to the record-breaking lows- for the British economy and for the Pound in particular, it is a not a good sign.

The UK Finance Minister Osborn said earlier that the country will continue to adhere to the selected financial policy; however last data on the labor market indicates weak economic growth. He thinks that current indicators in the labor sector demonstrate economic imbalance.
In order to relieve tension in economy it is necessary to resolve the issue of budget deficit as well.