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[LF.Anastasia]

JPY: Japanese Yen is getting stronger day by day

At the Forex currency market the Japanese Yen rate continues to gain strength on Thursday after yesterday’s pullback. Investors’ risk aversion contributes to the strengthening of the Yen to a large extent.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes down, being ready to cross signal line from top to bottom and giving a pair sell signal. Stochastic Oscillator has come out of the oversold zone today and started to rise; indicating that purchases in the pair is possible.

Forex recommendations: in case of breakdown at the level of 81.50 the pair will go to 81.40. If breakdown does not take place, the pair will consolidate close to the current levels.

It became known today that the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. In addition the following Japanese data was also released:
– Preliminary level of industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February;
– Unemployment rate remained at the previous level of 4.6% in March;
– Household spending fell by 8.5% y/y in March against the previous decrease by 0.2%;
– Net CPI declined by 0.1% y/y in March which became the 25th fact of reduction in a row.

In addition the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.
It became known at the beginning of the week, that the head of the Bank of Japan Mr. Shirakawa said that following the results in quarters I and II, it can be expected that level of GDP will decline, due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Japan also considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

 

[LF.Anastasia]

AUD: Australian Dollar is not tired to continue reaching highs

The Australian Dollar rate continues to reach thirty- year highs at the Forex currency market on Thursday amid weak USD and high commodity prices at the global trading floors.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go up, due to the large trading volumes, and giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.0930 the pair will retest the new highs at 1.0949 and after that it will go further to 1.1000.

On Friday investors will await the data on the level of lending in the private sector (growth by 0.4% in March) and also the data on the general volume of crediting; meanwhile the situation in the Australian economy has not changed much.

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.

It became known in the middle of last week that index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.

Kevin Rood, Minister of Foreign Affairs of Australia said yesterday that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.

It became known on Wednesday that CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.

 

[LF.Anastasia]

NZD: New Zealand Dollar is being corrected after reaching new highs

Forex currency market the New Zealand Dollar rate is being corrected on Thursday, following the decision of the Reserve Bank of New Zealand on the interest rate.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and goes upward due to high volumes, giving a pair buy signals. Stochastic Oscillator tends to come out of the overbought zone today, starting a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8030 the pair will go to 0.8010 and 0.7980. If the level of 0.8080 is exceeded, the pair will move to the previous highs of 0.8108.

It became known today that Reserve Bank of New Zealand has made a decision to leave interest rate at the low level of 2.5%, clarifying that the rate is not going to be raised.

Regulator stressed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.
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 level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.

Statistics released earlier showed that 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 turned out to be weaker than expected, which indicates that pace of economic recovery is slow.
The reaction of the NZD on the decision of the RBNZ is quite logical.

 

[kevinalex]

Australian dollar foreign exchange currency market on Wednesday ahead of the trend is still awaiting the signal for the formation of standing. The main and official version of easing inflation - the current level would take stringent measures to tighten monetary policy will prevent.

 

[LF.Anastasia]

Euro/USD: Euro remains positive

The pair EUR/USD is traded slightly upward at the Forex currency market on Friday morning, maintaining nevertheless a growth trend.
By 7.40 Moscow time the Euro is at 1.4826 against closing level of 1.4821 yesterday.

Anti-Dollar sentiment still prevails on the market assisting avoiding such positions. It can’t be ruled put that investors will fix part of profit in view of weekend.

A set of important statistics from Eurozone will be released midday, data from the U.S. will come out later.

Most likely the pair EUR/USD will not go beyond the range of 1.4780-1.4890 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound decided to continue growing

At the Forex currency market the British Pound Sterling rate returned to the positive area – yesterday’s correction didn’t take place and the currency continued growing again.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and goes up, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone, giving a similar signal.

Forex recommendations: in case of breakup at the level of 1.6680 the pair will move further to 1.6710 and 1.6750.

Today Great Britain celebrates the Royal wedding of Prince William and Kate Middleton, so most companies are closed for the weekend.

The statistics released the day before showed that the UK GDP increased by 0.5% on quarterly basis (+1.8% y/y) in QI, which agreed with the forecasts and was taken favourably by investors at Forex.

Minutes of the last meeting of the Bank of England released earlier showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still have no intention to start monetary tightening policy.

It is hardly probable that the rate will be raised before July-August this year.

Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released last week 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.

The rise of Pound Sterling in the last two days is explained by the general upswing in the market – as long as the U.S. Federal Reserve keeps the rate in the previous low range, maintaining the opinion that the rate will be kept low for a long time, the market will use the news to its advantage.

 

[LF.Anastasia]

CHF: Swiss Franc remains in the tight range near historic highs

At the Forex currency market Swiss Franc stays in the tight range near this week’s historic highs on Friday.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, giving a pair sell signal. Stochastic Oscillator has left the oversold zone today and began growing in the neutral zone giving a pair buy signal.

Forex recommendations: out of the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8700 the pair will retest a historical low of 0.8671 and then move to 0.8650. If the breakdown doesn’t occur, the pair will continue consolidation in the current range.

It became known earlier that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.
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.

Three-month Libor rate remains unchanged, at the level of 0.25%.

Trade balance in Switzerland decreased to 1.09 billion francs in March against the revised value of 2.38 billion in February; although economists had expected the reduction to 2.1 billion francs, supporters of the Swiss Franc were not deeply vexed.

The data of last week showed that economic sentiment index - 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 economic recovery even regardless of strong Franc. The data of last week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agrees with the forecasts.

KOF leading indicators will be released today.

 

[LF.Anastasia]

JPY: Japanese Yen stays near local highs

At the Forex currency market the Japanese Yen rate remains practically unchanged on Friday: on the one hand, the reason for this is upcoming weekend, on the other hand, markets in Japan are closed today for the Shova day.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes down, being ready to cross signal line from top to bottom and giving a pair sell signal. Stochastic Oscillator has come out of the oversold zone today and started to rise; indicating that purchases in the pair is possible.
Forex recommendations: in case of breakdown at the level of 81.50 the pair will go to 81.40. If breakdown does not take place, the pair will consolidate close to the current levels.
It became known today that the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. In addition the following Japanese data was mixed: Unemployment rate remained at the previous level of 4.6% in March; Preliminary level of industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; Net CPI declined by 0.1% y/y in March which became the 25th fact of reduction in a row; Household spending fell by 8.5% y/y in March against the previous decrease by 0.2%.
It became known at the beginning of the week, that the head of the Bank of Japan Mr. Shirakawa said that following the results in quarters I and II, it can be expected that level of GDP will decline, due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.
Japan also considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.
In addition the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

 

[LF.Anastasia]

AUD: Australian Dollar decided to start a correction

The Australian Dollar rate, probably, decided to start a correction at the Forex currency market on Friday.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and continues to go up, due to the large trading volumes, and giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today, giving a similar signal.
Forex recommendations: in case of breakdown at the level of 1.0930 the pair will retest the new highs at 1.0949 and after that it will go further to 1.1000. In case the breakup doesn’t occur, the pair will consolidate near the current levels.
According to the data released today, Private sector credit in Australia increased by 0.6% m/m (+3.6% y/y) in March against the forecast of growth by 3.3% y/y.
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.
It became known on Wednesday that CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.
It became known in the middle of last week that index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.
Kevin Rood, Minister of Foreign Affairs of Australia said yesterday that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.
Currently it is obvious that AUD/USD is overbought and needs a rollback.

 

[LF.Anastasia]

NZD: New Zealand Dollar may continue sliding

Forex currency market the New Zealand Dollar rate continues attract sellers’ attention, but the selling volumes are not rising indicating kiwi’s strength.
Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and goes upward due to high volumes, giving a pair buy signal. Stochastic Oscillator is sliding in the neutral zone today, starting a pair sell signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 0.8030 the pair will go to 0.8010 and 0.7980. If the level of 0.8080 is exceeded, the pair will move to the previous highs of 0.8108.
As the data released today indicated, trade balance surplus in New Zealand increased to NZD464 mln in March against the level of NZD194 seen in February.
The surplus came out much better than the forecast of NZD 200 mln, which is a positive signal for the national economy. Exports amounted to NZD4,53 bln last month against the forecast of NZD4,20 bln, imports – to NZD4,07 bln against the forecast of NZD3,90 bln.
According to the Reserve Bank of New Zealand decision interest rate was left at the low level of 2.5%, clarifying that the rate is not going to be raised. Regulator stressed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.
Statistics released earlier showed that 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 turned out to be weaker than expected, which indicates that pace of economic recovery is slow.
Earlier data 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 level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.