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[LF.Anastasia]

AUD: Australian Dollar remains close to high levels

At the Forex currency market the Australian Dollar rate is traded slightly downward on Thursday –correction that started this morning did not develop transforming into sluggish growth in the afternoon.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD, however it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator stays in the overbought zone, maintaining a pair buy signal and creating prerequisites for the trend reversal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0130 the pair will go to 1.0145/50 and1.0170. If the level of 1.0100 is exceeded, traders’ targets will be the levels of 1.0090 and 1.0050.

The Australian data released this morning was weak – leading indicator CB increased by 0.1% in January against the growth by 0.7% in December. It is not too good for the medium term outlook of Australian economy.

The data released earlier showed that leading indicators Westpac fell by 0.1% m/m in January while the forecast had been +0.8% m/m. It is a moderately negative sign for the Australian economy.

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

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.

Note, as it became known earlier, the Reserve Bank of Australia sold А$414 billion in the market in February – the action was aimed at weakening the position of the AUD, says the RBA monthly bulletin. In addition the RBA bought А$464 billion from foreign banks in February. No important Australian macro-economic statistics is going to be published this week; therefore movement direction will be determined by external background and domestic news for the pair AUD/USD. There are conditions now for the technical rollback in the pair.

 

[LF.Anastasia]

CAD: Canadian Dollar remains in the offset channel

At the Forex currency market the Canadian Dollar rate has been in the offset for the last three days.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD and is growing, giving a pair buy signal, however volumes are decreasing which can indicate a potential reversal. Stochastic Oscillator is rising today in the neutral zone, giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9830 the pair will go to 0.9850 and 0.9880. If the level of 0.9800 is exceeded, traders’ targets will become the levels of 0.9780 and 0.9750.

Canadian Prime Minister Mr. Harper said yesterday that it is not clear yet what will be the dynamics of the further recovery of the Canadian economy. In addition the politician stressed that the adoption of the new budget will be of great importance for the labor market and economy as a whole.

In accordance with the experts of the International Monetary Fund, Canadian economy will increase by 2.3% y/y this year, which became a step down against the October forecast of (+2.7% y/y).

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, meanwhile IMF supposes that the indicator will be at the level of 2.9% (earlier – 3%).

As for the rate of the Canadian Dollar this year, IMF assumes that if the average oil price will remain at about &90/barrel (in October- &79/barrel), CAD will consolidate, enjoying the fundamental support of the commodity economy of the country.

Earlier, Imperial Bank of Commerce reported about revision of the GDP forecast for QIV 2010 from the previous 2.3% to 2.6%; the Bank expects economic growth by 2.6% this year (2.4 % previously).

 

[LF.Anastasia]

Euro/USD: Euro evaluates news background

The pair EUR/USD is traded, not moving much at the Forex currency market on Friday, following downgrade of the rating of Portugal by the agency S&P and adoption of the “Pact euro Plus” by the EU.

By 9.30 Moscow time the Euro is at 1.4172 against closing session level of 1.4172 yesterday.

Thus, yesterday the EU Summit adopted a ‘Euro Plus Pact” which determines the mechanism of the European stability and other measures to improve economic governance of the region.

In addition, six countries – Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania have expressed their intention to join the “Pact” to contribute to the higher level of the competitiveness of the Eurozone.

According to the chairman of the European Council Van Rompuy, adopted Pact- is a collective guarantee of financial stability of the Euro.

Downgrade of the rating of Portugal to BBB with the forecast “negative” by S&P agency is a deterrent factor for the Euro today.

Therefore the pair EUR/USD has a lot of information to help determine movement direction.

Most likely the pair EUR/USD will not go beyond the range of 1.4080-1.4190 at the trading session on Friday.

 

[LF.Anastasia]

CHF: Swiss Franc continues to give way to USD

At the Forex currency market Swiss Franc rate continues to move away from the historic highs. Volume of purchase for the pair USD/CHF is still not large; there are no heavy buyers of the pair; however such dynamics is logical amid stable external background.

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 has come into overbought zone today, maintaining a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9100 the pair will go to 0.9120 and 0.9150. If the level of 0.9050 is exceeded, the target of decline will be the levels of 0.9030 and 0.9010/00.

Swiss National Bank started to indicate that intervention of possible: representative of the regulator Mr. Dantin said yesterday that the Bank is able to ensure price stability even amid excess liquidity. In addition the politician noted that the cost of the intervention at the currency market will be determined by the information pressure.

Bulls took the hint very well, which has been demonstrated by the current dynamics of the pair

Swiss National Bank adopted measures of verbal intervention against the Franc last week: 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.

Level of three-month LIBOR rate was left unchanged, at the 0.25%, as expected.

Statistics previously 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.

Note that levels of exports in Switzerland are growing even when the Franc is strong, maintaining support for the entire economy.

 

[LF.Anastasia]

JPY: Japanese Yen maintains its offset positions; movement in the pair USD/JPY is minor

The Japanese Yen rate remains unchanged at the Forex currency market on Friday – it is still in the extremely narrow offset channel, not moving in either directions.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to go down, confirming a pair sell signal. Stochastic oscillator remains in the overbought zone, descending gradually.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.00 the pair will go to 81.20 and 81.50. If the level of 80.60 is exceeded, traders’ targets will become the levels of 80.40 and 80.30/15.

As statistics released today showed net CPI in Japan declined by 0.3% y/y in February against the level of -0.2% y/y in January. Therefore, Japan is still in the state of inflation.

Representative of the Bank of Japan Mr. Miyao said the day before yesterday that the regulator shall carefully trace all risk factors for the process of Japanese economic recovery. In addition, time frame and volumes of reconstruction is not known yet which makes obscure further economic outlooks of the Country of the Rising Sun.

However, it is obvious that aftermath of the earthquake in March will impact on the economy – according to the estimates of the World Bank disasters in Japan in March will reduce GDP of the country in the middle of this year by 0.25%-0.5% ; however it is possible that rapid economic growth will follow after that.

We would remind that earlier Japan with the help of Central Banks of B7 countries conducted currency intervention, which discarded the Yen from local highs. As noted by the representative of the Bank of Japan Noda, countries of B7 conducted intervention, using the pair Euro/Yan. Currency intervention was not aimed at certain levels.

Market believes that regulator will have to carry out cash infusion not once to maintain the effect of the intervention- a one-time intervention is unlikely to be effective for the JPY. And offset of the pair USD/JPY in the last few days is a striking proof of that.

Note that offset movement in the pair USD/JPY can be maintained in the nearest future.

 

[LF.Anastasia]

AUD: Australian Dollar continues to consolidate at the end of the week

At the Forex currency market the Australian Dollar rate continues to be traded upward today.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator remains in the overbought zone, maintaining a pair buy signal.

Forex recommendations: if buyers’ sentiment for the pair AUD/USD preserves the levels of 1.0230 and new local highs of 1.0250 will be the target for the pair today.

The AUD ignores weak statistics released yesterday: leading indicator CB increased by 0.1% in January against the growth by 0.7% in December. It is the best indication for the medium term outlook of Australian economy; although it seems that external background overbalances this information. The data released earlier showed that leading indicators Westpac fell by 0.1% m/m in January while the forecast had been +0.8% m/m. It is a moderately negative sign for the Australian economy.

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

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.

Note, as it became known earlier, the Reserve Bank of Australia sold А$414 billion in the market in February – the action was aimed at weakening the position of the AUD, says the RBA monthly bulletin. In addition the RBA bought А$464 billion from foreign banks in February.

There are conditions now for the technical rollback in the pair.

 

[LF.Anastasia]

NZD: New Zealand Dollar continues to regain from the previous fall

At the Forex currency market the New Zealand Dollar rate continues to grow on Friday.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continued to rise, indicating a reversal trend. Stochastic Oscillator remains in the overbought zone today.

Forex recommendations: if current sentiments maintain in the market and in case of breakdown at the level of 0.7525 the pair will go to 0.7550 and 0.7570.

Statistics released yesterday showed that GDP in New Zealand rose by 0.2% m/m (+0.8% y/y) in QIV against the forecast of growth by 0.1% m/m, which support positive dynamics in NZD

Statistics of this week showed that balance of current account in New Zealand decreased to -NZ$3.5 billion against the value of -NZ$1.77 billion in QIII. The balance is most likely decreased due to the seasonal factors and we surely can see improvement in the situation.

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

It became the reason of the dramatic fall of the NZD, and what is more, Prime Minister John Key said earlier in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate.

This week the New Zealand Dollar has regained almost completely from the reduction which followed the decision of the RBNZ

Further dynamics of the pair NZD/USD will depend on the external background.

 

[LF.Anastasia]

GBP: British Pound remains under the selling pressure

At the Forex currency market the British Pound Sterling continues falling on Friday – the currency remains under selling pressure for the third consecutive session.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is falling in the neutral zone today, giving a pair sell signal.

Forex recommendations: in case of bearish scenario and the breakdown at the level of 1.6100 buyers’ targets will be the levels of 1.6080 and 1.6050.

Weak statistics released the day before shook the positions of Pound: retail sales excluding fuel in Great Britain fell by 1.0% m/m (+1.2% y/y) in February, level of retail sales fell by 0.8% m/m (+1.3%) y/y against the forecast of reduction by 0.6% m/m.

The day before Spencer Dale of Bank of England said he would be ready to reverse his decision on the key interest rate in case the inflationary pressure in the country continued to ease. He voted to raise the key rate this month guided by the inflation indicators.

Thus Dale is not confident in the stability and strength of the economic recovery in Britain.
Thus, according to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds.

Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. 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.

 

[LF.Anastasia]

Forex: Euro remains under pressure

The pair EUR/USD is traded upward on Monday morning, though haven started the day at considerably lower levels against those seen on Friday.

By 9.30 Moscow time the Euro is at 1.4056 against Friday closing session level of 1.4172.

The main reason for the Friday selloff were Philadelphia Fed President Charles Plosser’s hawkish comments. Plosser thinks the US economy is stable, state of labour market – positive and consumer expenditures – supporting for the economy, rising at positive levels.

The day is going to be quiet in terms of macro-statistics: the main data containing personal consumption and income data and Core PCE price index in February will be released in the afternoon.

Most likely the pair EUR/USD will not go beyond the range of 1.4010-1.4130 at the trading session on Monday.

 

[LF.Anastasia]

GBP: British Pound makes an attempt of correction after a selloff

At the Forex currency market the British Pound Sterling makes languid attempts of correction still remaining under pressure.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to decline, volumes are slowly going out, but a sell signal remains in force. Stochastic Oscillator is in the oversold zone, giving a similar signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.6030 the pair will go to 1.6050 and 1.6070. If the level of 1.6000 is exceeded, the pair will have a chance to test 1.5980 and 1.5975/60.

No important data will be released in Britain today, and the pair will move in accordance with the general external background.
Last week gave two causes for the British Pound sharp selloff. Firstly, released statistics were weak and disappointed investors: retail sales excluding fuel in Great Britain fell by 1.0% m/m (+1.2% y/y) in February, level of retail sales fell by 0.8% m/m (+1.3%) y/y against the forecast of reduction by 0.6% m/m.

Secondly, according to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds.

Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. 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.

The day before Spencer Dale of Bank of England said he would be ready to reverse his decision on the key interest rate in case the inflationary pressure in the country continued to ease. He voted to raise the key rate this month guided by the inflation indicators.
Thereby both fundamentals and the general external background continue to put pressure on the British Pound.