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[LF.Anastasia]

NZD: New Zealand Dollar moves further away from local highs

At the Forex currency market the New Zealand rate continues to retreat in pairing with the USD on Tuesday under the pressure of investors’ increasing risk aversion.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is growing, maintaining a pair buy signal. Stochastic Oscillator gives a pair sell signal today, going down in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7810 the pair will go to 0.7790 and 0.7770. If a breakdown does not take place, the pair will consolidate close to the current levels.

It was statistics on CPI that caused pullback in the New Zealand Dollar yesterday: inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country was weaker than expected which indicates that recovery pace of the national economy is low.

Statistics released earlier was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

In addition it also became known that the level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates against the level of +8 points in QIV.

Activity in March has not been impressive either: business confidence index NBNZ fell to -8.7 in New Zealand against 34.5 in the previous period. It is difficult to judge which factor has caused such rollback and it is worth waiting for the new data to be able to speak about one or another trend.

 

[LF.Anastasia]

Euro/USD: Euro is successfully recovering

The pair EUR/USD is traded upward at the Forex currency market on Wednesday, due to good U.S. statistics and total markets recovery after sales.
By 9.05 Moscow time the Euro is at 1.4392 against closing level of 1.4334.

Positive U.S. statistics released yesterday and favourable financial statements of some American companies supported the major pair.

Important macro-statistics is not going to be published today; data on sales of houses in the secondary markets in the U.S. in March and also data on the oil and oil products reserves for a week will be released in the afternoon.

Therefore, market is still guided by the external background.

Most likely the pair EUR/USD will not go beyond the range of 1.4310-1.448 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 be traded upward on Wednesday morning amid general positive trend at the capital markets. The minutes of the last meeting of the Bank of England will be made public this afternoon which will outline balance of power in the Monetary Committee.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and started to grow, indicating resumption of purchases. Stochastic Oscillator goes up in the neutral zone today, giving a similar signal.

Forex recommendations: if buyers’ sentiments are preserved, and in case of breakdown at the level of 1.6350 the pair will go to 1.6360 and 1.6380.
Statistics released earlier showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. For over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres. Interest rate was kept at the level of 0.50% per annum, program of securities repurchase also remained in the previous volume.

As it became known earlier that index of house prices in Great Britain increased by 1.7% m/m (+0.1% y/y) in April, as per Rightmove estimates. This has not affected the trades yet.

It became known earlier that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.

According to the representative of the Bank of England Mr. Sentence, inflation in Great Britain can exceed the level of 5% soon. He believes that inflation will go up during the summer. “If we wait until all signals of inflation will turn from flashing yellow to red, it will be too late to raise interest rates from the accommodative level” he stressed in his interview to the foreign news agency.

 

[LF.Anastasia]

CHF: Swiss Franc began to grow, however there is no general trend so far

Swiss Franc rate is traded upward at the Forex currency market this morning; although the growth of the Franc has not been crowned with success in the last two sessions.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going down, giving a pair sell signal. Stochastic Oscillator continues to grow 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 0.8985 the pair will go to 0.9010 and 0.9030. If the level of 0.8960 is broken down, the level of 0.8940 will be the target of decline.

Representative of Swiss national Bank Mr. Dantin stressed earlier that the Bank is capable to ensure price stability even amid excess liquidity. In addition the politician said that the cost of intervention in the currency market will be determined by the informational pressure.

SNB has already highlighted the problems more than once: following the last meeting, the regulator said that strong currency is a burden for the economy and its overprice will trigger slowdown in economic growth – largely due to the deceleration in export volumes.

Three- month Libor rate remains unchanged, at the level of 0.25%.
It became known last week that index of investors’ economic expectations ZEW increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economy recovery even despite strong Franc. The data of this week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agreed with the forecasts.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

 

[LF.Anastasia]

JPY: Japanese Yen started to lose positions

At the Forex currency market the Japanese Yen rate started to lose positions in pairing with the USD on Wednesday after the growth due to the interest to it as protective currency

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY; however it is still going down, maintaining a pair sell signal. Stochastic Oscillator has come out of the oversold zone today and goes upward, giving a pair buy signal.

Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 83.00 the pair will go to 83.15 and 83.30. If a breakdown takes place at the level of 82.70, the level of 82.50 will become the target of decline.
The following Japanese news was released today:
– Surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier;
– Tertiary index increased by 0.8% m/m in February against the fall by 0.1% in January;
– Level of export decreased by 2.2% y/y in March;
– Level of import increased by 11.9% y/y.

Therefore, Japanese economy had really expanded but it was before the earthquake in March.
Statistics released earlier was positive (unemployment rate amounted to 4.6% in February, unrevised; balance of current account increased by 3.0% y/y in February against the fall by 47.6% in January; level of import increased by 3.3% y/y, export rose by 4.1% y/y).

Earlier statistics showed that the revised volume of industrial output in Japan rose by 1.8% m/m in February against the preliminary level of +0.9%. This is a mediate indicator for the Yen because it shows the situation prior to the earthquake in March. Statistics released this week showed that volume of orders for the basic production equipment in Japan reduced by 2.3% m/m in February for the first time in the last three months while a month earlier the index had increased by 4.2%. The indicator gives an idea about the amount of capital investments in production sector for the next 3-6 months. Thus, continuation of companies’ cost reduction threatens to the Japanese economy in addition to the fact that the situation in the business sector has already been very hard after the series of earthquakes and tsunamis.

 

[LF.Anastasia]

AUD: Australian Dollar breaks its own records

At the Forex currency market the Australian Dollar rate continues to grow on Wednesday, reaching local highs again –the peak is now at the level of 1.0605.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes up, giving a pair buy signal. Stochastic Oscillator is not giving a clear signal today, coming out of the overbought zone.

Forex recommendations: in case of breakdown at the level of 1.0610 the pair will go to 1.0625. if upward breakdown does not take place the pair will consolidate close to the current levels.

The following Australian data was released today:
– Leading indicators index increased by 4.7% y/y in March against the rise by 4.8% in February;
– Index of prices for import иrose by 0.9% on quarterly basis in QI.
Leading indicators index demonstrates good growth in the Australian economy: figures indicate that next year the growth is unlikely to be too high but there will be some growth.

As noted in the meeting of the meeting of 5 April, released by the Reserve Bank of Australia, current monetary politics is quite acceptable, however, at the same time, the regulator expects growth of inflation rate. GDP is expected to be strong in QI. The document clarifies that “main index of CPI can demonstrate growth in March, while GDP will decline more significantly in QI than previously expected. The Committee will carefully consider all these factors”.

Following the meeting of the Reserve Bank of Australia in April the decision was made to keep current level of the interest rate unchanged at the level of 4.75% per annum – it has been for the fourth time already that the RBA does not dare to continue monetary policy tightening. Judging by recent comments, we should not expect the rise in the interest rate at the next meeting either.

Unemployment rate reduced to 4.9% in March versus the preliminary level of 5.0% and employment rate rose by 37.8 thousand last month against the forecast of increase by 24 thousand. Therefore, strong performance in the employment sector pushed the AUD to go upward, instilling investors with the idea that the RBA can resume monetary tightening policy earlier. On the other hand deficit of trade balance was recorded in the country for the first time since spring 2010 (February -А$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

 

[LF.Anastasia]

NZD: New Zealand Dollar has resumed its growth after two days of correction

At the Forex currency market the New Zealand Dollar is growing today after two days of decline as part of technical correction.

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

Forex recommendations: in case of breakdown at the level of 0.7960 the pair will go to 0.7980 and 0.8000. If an upward breakdown does not take place, the pair will consolidate close to the current levels.

The situation in the economy of New Zealand remains almost unchanged this morning.

Statistics released earlier was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

In addition it also became known that the level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates against the level of +8 points in QIV.

Activity in March has not been impressive either: business confidence index NBNZ fell to -8.7 in New Zealand against 34.5 in the previous period. It is difficult to judge which factor has caused such rollback and it is worth waiting for the new data to be able to speak about one or another trend.

Earlier, it was statistics on CPI that caused pullback in the New Zealand Dollar yesterday: inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country was weaker than expected which indicates that recovery pace of the national economy is slow.

 

[LF.Anastasia]

GBP: British Pound Sterling still can grow

Buyers prevail over sellers for the British Pound Sterling at the Forex currency market.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and has begun to grow, indicating sales resumption. Stochastic Oscillator is growing in the neutral zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6410, level of 1.6430 will be the target for growth.

Minutes of the last meeting of the Bank of England were released yesterday – balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still has no intention to start monetary tightening policy.
It is unlikely that the rate will be raised before July-August this year.

The data released earlier showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.
According to the representative of the Bank of England Mr. Sentence, inflation in Great Britain can exceed the level of 5% soon. He believes that inflation will go up during the summer. “If we wait until all signals of inflation will turn from flashing yellow to red, it will be too late to raise interest rates from the accommodative level” he stressed in his interview to the foreign news agency.

Statistics released earlier showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. For over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres. Interest rate was kept at the level of 0.50% per annum, program of securities repurchase also remained in the previous volume.

As it became known earlier index of houses prices in the UK increased by 1.7% m/m (+0.1% y/y) in April, as per Rightmove estimates.

 

[LF.Anastasia]

CHF: Swiss Franc has reached new historic highs once again

At the Forex currency market Swiss Franc rate has reached new historic highs – in pairing with the USD this time, and it is at the level of 0.8889 at the moment.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and it goes down, giving a pair sell signal. Stochastic oscillator continues to grow 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 0.8900 and retesting of the level of 0.8889 the pair will go to 0.8850. If downward breakdown does not take place, the pair will consolidate close to the levels, achieved currently.

Three- month Libor rate remains unchanged, at the level of 0.25%.
It became known last week that index of investors’ economic expectations ZEW increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economy recovery even despite strong Franc. The data of this week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agreed with the forecasts.

Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Representative of Swiss national Bank Mr. Dantin stressed earlier that the Bank is capable to ensure price stability even amid excess liquidity. In addition the politician said that the cost of intervention in the currency market will be determined by the informational pressure.
SNB has already highlighted the problems more than once: following the last meeting, the regulator said that strong currency is a burden for the economy and overprice will trigger slowdown in economic growth – largely due to the deceleration in export volumes.

 

[LF.Anastasia]

JPY: Japanese Yen balked at decline

The Japanese Yen rate remains in the offset channel at the Forex currency market; however it does not decline any longer.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY although it is still declining, preserving a pair sell signal. Stochastic Oscillator has come back to the oversold zone today and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 82.40 the pair will go to 82.30 and 82.10.

The situation in Japanese economy remains mostly unchanged. On 18 April the Bank of Japan started to repurchase government bonds from the market for the amount of Y160 billion which should support national economy.

It became known yesterday that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier and tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded but it was before the earthquake in March.

At the same time level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical..

Earlier statistics showed that the revised volume of industrial output in Japan rose by 1.8% m/m in February against the preliminary level of +0.9%. This is a mediate indicator for the Yen because it shows the situation prior to the earthquake in March. Statistics released this week showed that volume of orders for the basic production equipment in Japan reduced by 2.3% m/m in February for the first time in the last three months while a month earlier the index had increased by 4.2%. The indicator gives an idea about the amount of capital investments in production sector for the next 3-6 months. Thus, continuation of companies’ cost reduction threatens to the Japanese economy in addition to the fact that the situation in the business sector has already been very hard after the series of earthquakes and tsunamis.

Consolidation of the Yen this week reflected investors’ interest in safe currencies, caused by the situation with the USD, which was not very good. However, it is too early to speak about positive trend of the price.