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[LF.Anastasia]

CHF: Swiss Franc stands still in uncertainty

At the Forex currency market Swiss Franc rate stands still on Monday, the direction of its movement will be determined by market sentiment. The external background is still neutral.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is rising, maintaining a former buy signal. However volumes are unremarkable indicating weakness of the signal. Stochastic Oscillator is decreasing in the neutral zone today, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.9230 the pair will go to 0.9210 and 0.9190. If the breakdown doesn’t occur, the pair will continue consolidation near the current levels.

As it became known last Friday, the level of real retail sales in Switzerland increased by 1.5% m/m in February against the decrease by 2.4% m/m in January. At the same time SVME-PMI index decreased to the level of 59.3 points in March against the level of 63.5 points seen previously. Thereby the data was mixed, but CHF didn’t respond to it remarkably, being pressured by USD amid strong U.S. macroeconomic data.

Earlier 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.

Note that verbal interventions are ordinary for SNB. Previously Swiss National Bank started to indicate that intervention of possible: representative of the regulator Mr. Dantin said 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.

Level of three-month LIBOR is currently at the level of 0.25%.
Expensive CHF is negative for exporters, prevents rates from stabilization and influences monetary policy tightening. Therefore CHF rollback from historical highs partly eases tension here.

 

[LF.Anastasia]

AUD: Australian Dollar tested a new high at the beginning of the week

At the Forex currency market the Australian Dollar rate tested a new 28-year high on Monday – 1.0418 – and began a correction movement on RBA meeting started today.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues rising, maintaining a previous buy signal. Stochastic Oscillator today stays in the overbought zone.

Forex recommendations: if bullish sentiment for the pair AUD/USD remains intact the level of 1.0418 may be exceeded today. Still there is high possibility of consolidation at current levels and slight correction after 12 consecutive days of growth.

The calm sentiment of monetary officials in Australia is amazing – no one of them held a speech for the last two weeks in spite of weak macro-statistics.

Still markets will take interest in comments of RBA officials about future rate and economic perspectives during the 2-days meeting. Interest rate decision will become known tomorrow morning (forecast – unchanged at the current level of 4.75% per annum).

As it became known today, ANZ Job Advertisements in Australia increased by 1.3% in March – more than growth by 1.1% seen in February. March data on labour market will be of interest assisting to distinguish whether it is a trend in the sector. This will give strong support to aussie.

Still January data remains topical: the 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.

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.
Still regulator’s respond to the current economic situation is at the centre of markets’ attention.

 

[LF.Anastasia]

JPY: Japanese Yen stays near half-year lows on Monday

The Japanese Yen rate trades near 6-months lows at the Forex currency market on Monday, remaining under pressure of rising USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is going upward, confirming a former buy signal. Stochastic Oscillator stays in the overbought zone today, maintaining a similar signal.

Forex recommendations: in case of breakup of the level 84.30 buyers’ targets will become 84.60 and 84.80.

Revised data on Tankan survey was released this morning – as it became known, business confidence of all major companies in Japan after the earthquake on March, 11, increased by 6 points against the increase by 5 points in December. Besides the forecast for June turned out to be at the level of -2 points after the earthquake and tsunami. Before the acts of God the forecast was at +3 points.

As it became known the day before, Manufacturing PMI in Japan according to Nomura decreased to the level of 46.4 points in March against the level of 52.9 points seen in February. The data is of no surprise taking into consideration the ravages after earthquake in March and the following tsunami.
Statistics for March came out weak as expected: the level of Small Business Confidence decreased to 49.5 points in March against the level of 56.6 points seen in February.

Currently 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.

It is likely that in the medium term the Japanese Yen rate in the pair USD/JPY may weaken to 85.0.

Meanwhile Bank of Japan continues working on reduction of negative consequences influence for financial sector: presumably, the Ministry of Finance will sell 310 bln yen of government debt and 250 bln of 10-year bonds on April, 7.

 

[LF.Anastasia]

NZD: New Zealand Dollar is ready for correction

At the Forex currency market the New Zealand Dollar rate is traded slightly downward on Monday after having reached local highs last week. However the neutral external background may assist the delay of correction.

Forex forecast: MACD indicator is crossing the signal line for the pair NZD/USD and continues to rise steadily, preserving a buy signal. Stochastic Oscillator stays in the overbought zone, giving the same signal.


Forex recommendations: in case of breakup at the level of 0.7690 the pair will go to 0.7700 and 0.7720. If the level is not exceeded, the pair will start consolidation near current levels.


Data released on trade balance last week turned out to be positive for the first time in 8 months. The main catalysts for this were high commodity prices and an increase in export levels of wood and dried milk.


Export levels increased by 17% y/y, import – by 23% y/y to the level of NZ$3.86 bln.
Export accounts for about 30% of NZ GDP and an increase in it will have a positive effect on the national economy.
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.

March data is not impressive: the level of NBNZ business outlook in New Zealand declined to -8.7 points in March against the level of 34.5 points in February. It is difficult to judge on the reasons of such a rollback, and one should wait for the next data to judge on the trend.
In the current situation possibility of forthcoming correction in the NZD/USD is high.

 

[LF.Anastasia]

Euro/USD: USD strengthens on Bernanke’s comments

The pair EUR/USD is traded slightly downward on Tuesday morning – after Federal Reserve Chairman Ben S. Bernanke’s speech the day before.
By 9.00 Moscow time the Euro is at 1.4200 against Monday closing session level of 1.4219.

Ben Bernanke said in his speech that the increase in inflation seen now was based on commodity-price factor and was therefore transitory. According to him, this would not be long and Fed had to monitor inflation extremely closely to be ready to respond in case the situation worsened.
In response to Bernanke’s words USD strengthened a bit.

Important data will be released today including Services PMI – in Spain, France, Germany, Great Britain, at 18.00 Moscow time – in USA. Besides, Retail sales in eurozone published midday will be of interest.

By now Euro resists selloff.
Most likely the pair EUR/USD will not go beyond the range of 1.4170-1.4280 at the trading session on Tuesday.

 

[LF.Anastasia]

GBP: British Pound correction didn’t keep waiting

At the Forex currency market the British Pound Sterling rate is traded downward on Tuesday morning after two consecutive sessions of growth. So far the currency has no reasons for strengthening.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD as it crossed the signal line top-down the day before, sell signal remains intact. Stochastic Oscillator has touched the overbought zone, giving a pair buy signal.


Forex recommendations: off the market.


Feasible event scenario at Forex: in case of breakup at the level of 1.6240 the pair will move to 1.6250 and 1.6270. If the level of 1.6200 is broken down sellers’ targets will be 1.6180 and 1.6160.

According to the released BCC survey, 1q GDP in Great Britain is expected to come out at the level of 0.6-0.7%. Besides 1q sales among manufacturers may reach the level of +8 points against 4q level of +24 points, orders may decline to +22 points against +19 points seen previously.
1q sales among service providers are expected to come out at the level of +6 points against 4q level of +5 points, orders may grow to +5 points from -7 points seen previously.

Important macro-statistics will be released midday showing the data on Markit Services PMI in Great Britain in February.
The Bank of England will hold a meeting on Thursday this week, but is likely to leave the benchmark interest rate unchanged. Currently the key rate remains at 0.50% per annum.

According to the Minutes of previous 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.

 

[LF.Anastasia]

CHF: Swiss Franc rises barely perceptible

At the Forex currency market Swiss Franc rate continues a barely perceptible increase on Tuesday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is rising, maintaining a former buy signal. Stochastic Oscillator is decreasing in the neutral zone today, confirming a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakup at the level of 0.9240 buyers’ targets will be 0.9250 and 0.9265. If the level of 0.9200 is broken down, the pair will go to 0.9170.
March CPI data will be released in Switzerland on Wednesday. The indicator is expected to increase by 0.6% y/y against the level of 0.5% seen previously and amount to 0.2% m/m (0.4% m/m before).

Earlier 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.

Note that verbal interventions are ordinary for SNB. Previously Swiss National Bank started to indicate that intervention of possible: representative of the regulator Mr. Dantin said 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.

Level of three-month LIBOR is currently at the level of 0.25%.
As it became known last Friday, the level of real retail sales in Switzerland increased by 1.5% m/m in February against the decrease by 2.4% m/m in January. At the same time SVME-PMI index decreased to the level of 59.3 points in March against the level of 63.5 points seen previously. Thereby the data was mixed, but CHF didn’t respond to it remarkably, being pressured by USD amid strong U.S. macroeconomic data.

 

[LF.Anastasia]

JPY: Japanese Yen returned to weakening

The Japanese Yen rate returned to weakening at the Forex currency market on Tuesday, as expected, after a slight technical correction.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is going upward aiming at crossing the signal line bottom-up, confirming a former buy signal. Stochastic Oscillator stays in the overbought zone today.

Forex recommendations: in case of maintenance of current external background and breakup of the level 84.50 buyers’ targets will become 84.65 and 84.80.

By Tuesday morning the situation in the national economy remains unchanged.
Revised data on Tankan survey was released the day before – as it became known, business confidence of all major companies in Japan after the earthquake on March, 11, increased by 6 points against the increase by 5 points in December. Besides the forecast for June turned out to be at the level of -2 points after the earthquake and tsunami. Before the acts of God the forecast was at +3 points.

Currently 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.

It is likely that in the medium term the Japanese Yen rate in the pair USD/JPY may weaken to 85.0.
Meanwhile Bank of Japan continues working on reduction of negative consequences influence for financial sector: presumably, the Ministry of Finance will sell 310 bln yen of government debt and 250 bln of 10-year bonds on April, 7.

Manufacturing PMI in Japan according to Nomura decreased to the level of 46.4 points in March against the level of 52.9 points seen in February. The data is of no surprise taking into consideration the ravages after earthquake in March and the following tsunami.
Statistics for March came out weak as expected: the level of Small Business Confidence decreased to 49.5 points in March against the level of 56.6 points seen in February.

 

[LF.Anastasia]

AUD: Australian Dollar experiences technical correction

At the Forex currency market the Australian Dollar rate continues a correction movement started the day before.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues rising, maintaining a previous buy signal. Stochastic Oscillator today aims at leaving the overbought zone starting to form a sell signal.

Forex recommendations: in case of breakdown at the level of 1.0300 the pair will go to 1.0280 and 1.0275. If the level is not broken down, the pair will consolidate near current levels.

Today’s correction is of no surprise: the pair AUD/USD showed a sound increase during twelve consecutive trading sessions.

As a result of RBA meeting the interest rate was left unchanged at the level of 4.75% per annum today – the officials didn’t resolve to tighten monetary policy for the fourth time. The decision was in line with expectations and didn’t evoke markets’ response.

Morning data from Australia confirmed previous publications and turned out to be weak: firstly, trade balance deficit was recorded for the first time since spring 2010 (-А$205 mln in February against +А$1,4 bln in January). Besides, AiG Performance of Service Index decreased to the level of 46.5 points in March against the level of 48.7 points in February.

Thereby macroeconomic background is still of no strong support to aussie.
As it became known today, ANZ Job Advertisements in Australia increased by 1.3% in March – more than growth by 1.1% seen in February. March data on labour market will be of interest assisting to distinguish whether it is a trend in the sector. But still any conclusions are premature.

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 continues to rise well

At the Forex currency market the New Zealand Dollar rate continues to rise on Tuesday in spite of the premises of technical correction.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and continues to rise, giving a pair buy signal. Stochastic Oscillator stays in the overbought zone, giving the same signal.

Forex recommendations: in case of bullish sentiments’ strengthening buyers’ target for today will be the level of 0.7720. If the level is not exceeded, the pair will start consolidation near the current levels.

As it became known today, the 1q level of NBNZ Business Confidence in New Zealand, according to NIESR, decreased by 27% against the 4q level of +8 points.

Thereby the first 1q data is being published, yet rather weak. Still kiwi ignores the statistics. March data is not impressive: the level of NBNZ business outlook in New Zealand declined to -8.7 points in March against the level of 34.5 points in February. It is difficult to judge on the reasons of such a rollback, and one should wait for the next data to judge on the trend.

Data released on trade balance last week turned out to be positive for the first time in 8 months. The main catalysts for this were high commodity prices and an increase in export levels of wood and dried milk.

Export levels increased by 17% y/y, import – by 23% y/y to the level of NZ$3.86 bln.

Export accounts for about 30% of NZ GDP and an increase in it will have a positive effect on the national economy.
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.