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"BNP Paribas: EUR/USD may rise to 13-month high"(2011-03-04) Technical analysts at BNP Paribas believe that the single currency may rise to the 13-month maximum versus US dollar if it manages to overcome resistance at the $1.40 level representing 80% Fibonacci retracement of the decline from $1.4282 on November 4 to $1.2867 on January 10. The specialists claim that after getting above $1.40 the pair EUR/USD may go up until full retracement rising to $1.43 and to $1.4450. According to BNP Paribas, above $1.43 there is a downtrend line from the euro’s record maximum at $1.6038 in July 2008 and the 76.4% Fibonacci retracement of its decline from November 2009 to June 2010. Chart. Weekly EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6457

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"Morgan Stanley: yen will fall versus US dollar and euro"(2011-03-03) Analysts at Morgan Stanley claim that Japanese yen may fall as the Bank of Japan may loosen its monetary policy even more making investors more concerned about the country’s fiscal state. If it happens, yen will again be used as a funding currency for carry trades and investors will sell it for higher yielding assets, for example, the ones in Australia and New Zealand. According to Morgan Stanley, yen will fall to 93 per dollar and to 115 per euro by the end of 2011. The BOJ has pledged to hold its benchmark interest rate at 0-0.1% until it can expect stable price gains, which board members see at about 1%. Japanese consumer prices excluding fresh food fell for a 23rd straight month in January, falling 0.2% from 2010 level. On February 22 Moody’s Investors Service reduced Japan’s debt rating outlook noting that political gridlock will constrain the country’s efforts to tackle debt that is poised to exceed twice the size of GDP. On March 1 Japan’s lower house of parliament approved Prime Minister Naoto Kan’s record 92.4 trillion yen ($1.1 trillion) budget. Never the less, Kan didn’t manage to persuade opposition lawmakers to authorize 44.3 trillion yen in government bonds to help fund the budget. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6454

"Jyske Bank: GBP/USD will drop to 1.4700 in 3 months"(2011-03-03) Analysts at Jyske Bank, the third largest Danish bank in terms of market share, believe that the levels at which British pound is currently trading versus its US counterpart will be the highest in 2011. The specialists believe that the pair GBP/USD is going to cap its gains and survive a sharp decline during the next 3 months slumping to the year’s minimums at 1.4700. According to the bank, the decision to tighten monetary policy will be very hard to make for the Bank of England. The strategists claim that the central bank won’t announce a hike of 25 basis points until the end of 2011. If this assumption is right, then the markets will be very disappointed. So, Jyske Bank expects pound to remain around 1.4800 over the next 3 months. After the BoE increases rate to 0.75%, GBPUSD will climb to 1.6500. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6452

"BNY Mellon: US dollar needs global crisis to strengthen"(2011-03-03) Analysts at Scotiabank note that although the market’s risk aversion’s increasing and they turn to safer currencies such as yen and franc, the stage where investors are seeking the real safe havens hasn’t been reached yet. Without a serious crisis and with monetary policy in investors' sights they won’t turn to US currency. The strategists are bearish on the greenback. In their view, during the next few months US dollar will trade sideways, but by the end of the year it will go down. Strategists at BNY Mellon share the same views. The specialists note that though dollar's probably slightly oversold now, the geopolitical events in North Africa and the Middle East remain relatively contained. Though investors avoid assets in the Middle East and South Africa, they keep favoring higher-yielding overseas assets in Asia and Latin America. The bank reminds that investors’ demand for US dollar surged in 2008 after Lehman Brothers collapse, so in order to strengthen American currency needs a “good old-fashioned global crisis”. The VIX, a widely used measure of investor expectations of volatility, now stands at 21-23. That's up from 16 or 17 before the Middle East turmoil began, but still below the 45-50 level reached last summer, when investors were worried about a European sovereign debt crisis. График. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6450

"Commerzbank: EUR/USD forecast"(2011-03-03) Today’s outlook from Commerzbank is much like what the economists said yesterday. Yesterday the European currency jumped from 1.3740 and renewed 2011 maximums in the 1.3890 area. Technical analyst at Commerzbank note that the pair EUR/USD broke above resistance at 1.3860 and is going up to the 1.3960/1.4000 area where there’s the 78.6% Fibonacci retracement of the decline from November maximums and the 200-day MA. The specialists expect euro to fail at these levels. On the other hand, if euro breaks below support at 1.3675, it will be poised to fall to the 55-day MA at 1.3464/55. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6448

"UBS: euro will face new challenges in March"(2011-03-03) Strategists at UBS expect the ECB to raise its inflation forecast from 1.7% to 2% and give hawkish comments. According to the specialists, short-term investors will buy euro versus Swiss franc driving the pair EUR/CHF up towards 1.35. Such trade may last, however, no more than 2 weeks as later in March the ECB will have to make difficult decisions about how to deal with the indebted peripheral countries. As a result, the single currency will be hit by the reemerging event risks. Analysts at BNY Mellon believe that the ECB will lift up interest rates in July and will certainly support euro. Never the less, the specialists also note that before that the market will inevitably focus on Europe’s debt woes. In their view, it’s necessary to impose more strict fiscal criteria on the euro zone countries, though there’s high uncertainty about what will actually happen by the end of March. One should also take into account the fact that US dollar’s weakness also contributes to euro’s strength. So, if the greenback starts gaining at the time when investors are worried about the European debt, the outlook for the euro could quickly change. Chart. Daily EUR/CHF Comment here http://www.fbs.com/analytics/news_markets/view/6446

"Market’s waiting for ECB meeting"(2011-03-03) The ECB rate decision is the major event investors are waiting for today. It’s necessary to note that he European Central bank will be the first among the world’s five biggest central banks to announce a policy decision since crude oil surged overcame last week the $100 a barrel threshold. European Central Bank President Jean-Claude Trichet may tell how euro zone monetary authorities plan to deal with rising oil prices that strengthen inflationary pressure affecting at the same time the region’s economic growth. In February European inflation accelerated to 2.4% on the annual basis. The most common expectations are that the ECB will leave rate at 1%, though the tone of the central bank will be much more hawkish suggesting rate hike later this year. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6444

"Bank of America increased forecasts for EUR/USD"(2011-03-03) Analysts at Bank of America Corp. (BAC) increased their first-quarter and long-term forecasts for the single currency versus US dollar. The specialists explained changes in their projections by rising euro and concerns about America’s fiscal state. BAC raised the first-quarter euro forecast from $1.23 to $1.30 due to the higher European short-term interest rates and the current surge in oil prices. By the end of 2011 the pair EUR/USD is now expected to trade at $1.35 up from the previous estimate of from $1.30. Euro’s forecast was also lifted up from $1.35 to $1.40 by December 2012. The second-quarter estimate was left unchanged at $1.20 as the market’s attention will once again focus on the euro zone’s debt problems during this period. In the longer term dollar will be weakened by the fiscal crisis in the US. The pair EUR/USD renewed yesterday 2011 maximum reaching 1.3889. This year the European currency gained 3.6% on the expectations of ECB rate hike. The ECB rate’s decision will be announced today at 12:45pm. The European Central Bank holds the rate at 1% since May 2009. The BCA analysts believe that the Fed will keep its benchmark at 0-0.25% as it stays since December 2008, when it meets on March 15. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6442

"Commerzbank: comments on NZD/USD"(2011-03-02) During the Asian session today New Zealand’s dollar extended its previous decline from 0.7555 slumping below 0.7400. Technical analysts at Commerzbank believe that the pair NZD/USD will stabilize right above 0.7376/43. According to the specialists, kiwi will bottom in the area of December minimum at 0.7343 and then struggle next week to crawl up to 0.7555. If New Zealand’s currency falls below 0.7343, it may decline to June maximum at 0.7161 and to 61.8% Fibonacci retracement of the 2010 advance at 0.7102. Chart. H4 NZD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6437

"RBC: King won’t manage to prevent the rate hike"(2011-03-02) Analysts at RBC Capital Markets say that the fact that British pound reached yesterday 13-month maximum versus the greenback means that investors believe that the Bank of England Governor Mervyn King won’t be able to keep interest rates from rising. The head of the Britain’s central bank is cautious about raising interest rates as it may hamper already weak country’s economic growth – in the fourth quarter of 2010 UK GDP contracted by 0.6%. However, the number of BoE Monetary policy Committee members in favor of the rate hike increases. According to the minutes of the MPC meeting that took place on February 10, BoE Chief Economist Spencer Dale joined policy makers Andrew Sentance and Martin Weale in voting for an interest-rate hike from the current 0.5% level as British inflation pace accelerated in January to 4%, 2 times higher than the target level. RBC specialists underline that since 2003 King has been outvoted already twice. As sterling’s strengthening the market becomes more convinced that King will either be offside again or capitulate. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6435

"Mizuho: USD/CHF will fall to 0.8300"(2011-03-02) Analysts at Mizuho Corporate Bank claim that 8-month downtrend for the pair USD/CHF that has recently pushed the greenback to the record minimum at 0.9235 isn’t over yet. The specialists believe that US dollar will fall versus Swiss franc to 0.9100 next month, lowering to 0.8500 in 6 months and hitting the 0.8300 level in a year. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/6433

"Euro’s under pressure versus franc and yen"(2011-03-02) Analysts at Zuercher Kantonalbank note that after falling through the key support at 1.2890 the pair EUR/CHF is trapped between 1.27 and 1.30. The specialists warn that if euro falls below 1.2685, it will be poised down to 1.2550. Chart. H4 EUR/CHF Analysts at Societe Generale note that as the pair EUR/JPY didn’t manage to hold above resistance in the 113.40 area, it will go through the downward consolidation that began at 114.30. The bank believes that euro may drop to Monday's minimum at 111.95, and, possibly, to the support at 111.60. Chart. H4 EUR/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6431

"Traders expect RBNZ to cut benchmark rate"(2011-03-02) New Zealand’s dollar fell today to this year’s minimum versus its US counterpart as the country’s Prime Minister John Key claimed that the potential reduction of the 3% benchmark interest rate will help the economy recover after earthquake in Christchurch that occurred on February 22. According to Key, the two quakes from which New Zealand suffered during the past half of the year caused NZ$20 billion ($14.8 billion) of damage. Credit Suisse Group AG index based on swaps shows that traders are sure that the Reserve Bank of New Zealand will cut the rates by 25 basis points at its meeting on March 10. Some investors are even looking forward to 50-basis point reduction. Although the government is separate from the central bank, such statements made by the Prime Minister certainly affect the national currency. The market is currently trying to find out where the bottom is going to be. Support is found at 0.7400, while the resistance lies at 0.7439. Chart. H4 NZD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6429

"Commerzbank: short-term outlook for EUR/USD"(2011-03-02) The European currency didn’t manage to overcome resistance at 1.3860 and went down to 1.3740. Technical analysts at Commerzbank claim that as long as the pair EUR/USD is trading above support at 1.3650, it’s under the bullish pressure. The bank sets the target for euro’s growth at 1.3960/1.4000 where there is the 78.6% retracement of the decline from November maximum and the 200-week MA. On the other hand, if euro breaks below support at 1.3650, it will be poised to fall to the 55-day MA at 1.3450. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6427

"Mizuho: EUR/USD will rise in March at least to 1.4000"(2011-03-02) The single currency advanced from minimums in the 1.3425 area hit in the middle of February and met resistance at 2011 maximum at 1.3860. Technical analysts at Mizuho Corporate Bank believe that the pair EUR/USD will finally manage to break above this level. In their view, in March euro will climb at least to 1.4000 and possibly to November’s maximum at 1.4281. The specialists underline that momentum for the pair has become bullish. Bullish pressure will decline if EUR/USD falls below 1.3300. In such case this forecast will have to be revised. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6424

"Bof T-Mitsubishi: US dollar will strengthen versus euro by the year-end"(2011-03-02) Analysts at Bank of Tokyo-Mitsubishi UFJ claim that the greenback may rise to the levels at which it traded versus the European currency in September. Such forecast is based on the reviving of US economy and possibly waning expectations of the rate hikes by the developed nations’ central banks. The specialists expect US dollar to climb to $1.27 per euro and 92 yen in a year. The dollar estimates were reduced from the previous prediction of $1.20 per euro made before a surge in oil prices in February led US currency lose 0.8% versus its European counterpart. US economic growth is going to be strong surpassing economists’ expectations. The data so far seems to be quite encouraging – the country’s manufacturing grew in February at the fastest pace in almost 7 years. ISM factory index rose from 60.8 in January to the maximal level since May 2004 at 61.4. So, according to Bank of Tokyo-Mitsubishi, such solid performance of American economy is going to drive US dollar up. The bank also underlines that the markets are pricing in too much in terms of the ECB rate hikes in the next 12 months and most likely will get disappointed that will be a negative factor for the single currency. Bank of Tokyo-Mitsubishi projects that the pair EUR/USD will rise to $1.40 in 3 months due to the increase in oil prices. Japanese yen will decline to 85 per dollar during this period. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6421

"Bernanke: inflation risk in US remains low"(2011-03-02) Yesterday’s speech of Federal Reserve Chairman Ben Bernanke allows suggesting that the Fed won’t hurry to raise interest rates after the $600 billion quantitative easing program is completed by the end of June. In his view, inflation risk isn’t high, while the situation on the labor market is still difficult. Bernanke believes that the surge in commodity prices won’t generate a lasting rise in inflation. For the economic recovery to be sustained, the Fed’s benchmark rate will has to stay low for an “extended period”. Bernanke pledged to act if higher commodity prices persist, spurring inflation and increasing inflation expectations, though currently the head of US central bank sees no necessity for such actions. The Fed’s Chairman will continue his monetary policy testimony today. Bernanke will begin speaking in front of the House Financial Services Committee in Washington at 3 p.m. GMT. Comment here http://www.fbs.com/analytics/news_markets/view/6416

"Societe Generale: EBC may not hike until 2012"(2011-03-01) Economists at Societe Generale think that the more hawkish remarks we’ve been hearing from the central banks may actually be wrong-footed. The high inflation is being driven by the supply concerns in the oil market that means that it’s very negative for the global economy in terms of growth. The specialists believe that this is not something the central banks should be responding to by hiking interest rates. The concern is on the second round effects that would come but that will require a very long period of higher oil prices. And this is where the ECB expresses its second concern – the demand side that is driving commodities from the stronger growth in emerging markets. However, the core inflation in Europe shows that there’s really no indication of second-round effects coming through, so it’s too early to call for the ECB rate hikes from the current inflation picture. According to Societe Generale, the ECB could wait until 2012. There’s the second dimension about which the central banks don’t like to talk much but which is very important – this is the financial stability and the sovereign debt crisis. It could be much harder for the ECB to hike rates than the market’s currently pricing, as the central bank has to take into account not only the rising oil prices, but also the threats to the region’s financial stability. Comment here http://www.fbs.com/analytics/news_markets/view/6410

"CIBC: USD/JPY will rise to 89.00 by the year-end"(2011-03-01) Analysts at Canadian Imperial Bank of Commerce expect that US dollar will begin strengthening versus Japanese yen from the middle of the year. In their view, by then US economic outlook improves and the Federal Reserve will start regarding the possibility of tightening its monetary policy. According to CIBC, the pair USD/JPY will climb to 87.00 area in the second quarter, then rise to 88.00 in the third quarter and end 2011 at 89.00. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6409

"Commerzbank: comments on GBP/USD"(2011-03-01) British pound recovered from Friday’s minimum versus the greenback at 1.6070 getting above 1.6300 and reaching 1-year maximum at 1.6330. Technical analysts at Commerzbank claim that is the pair the pair GBP/USD manages to hold above 1.6300, it will head to the 1.6400/45 area limited by the double Fibonacci retracement and the downtrend from 2007 to 2011. The topside of this area will provide enough resistance to make sterling fail, says the bank. If 1.6300 keeps constraining GBP/USD advance, the rate may drop to 1.6100. According to Commerzbank, pound will remain under bullish pressure as long as it trades above support at 1.5963. Chart. H4 GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6407

"Barclays Capital: USD/CAD will fall to 0.9500"(2011-03-01) Analysts at Barclays Capital expect the pair USD/CAD to fall down to 0.9500 in the next few months as it broke below the trend line support from the Augusts maximum in the 1.0670 zone. According to the specialists, the greenback may bounce from the 0.9660/0.9710 area, but the recovery will be short-lived and the bulls will give up. Chart. Daily USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/6405

"UBS: AUD/USD forecast’s increased"(2011-03-01) Australian dollar dipped to 1.0148 versus its US counterpart after the Reserve Bank of Australia decided to leave the benchmark interest rate at 4.75%, so the players who were looking forward to more hawkish RBA statement got disappointed. However, the pair AUD/USD has already gone up to 1.0180 to compensate today’s losses. Analysts at UBS note that the demand for Aussie remains high. The specialists lifted up their month forecast for Australia’s currency from 0.9700 to 1.0000. The 3-month forecast was raised from 0.9300 to 0.9800. According to the strategists, the market will be now waiting for the rate’s hike next month. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6402

"Mizuho: EUR/USD may rise to 1.4000"(2011-03-01) Technical analysts at Mizuho Corporate Bank claim that the single currency has jumped from yesterday’s minimum at 1.3710 and reached resistance at 1.3860. In their view, the possibility of the day’s close above 1.3900 has so far increased. This, in its turn, will trigger short covering. The same effect will be from the weekly close above 1.3900. The next target of the pair EUR/USD is at 1.4000. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6400

"Analysts on Switzerland’s GDP"(2011-03-01) The greenback went down versus Japanese yen from maximum of the middle of February at 83.95 to the 3-week minimums in the 81.60 area. Technical analysts at Mizuho Corporate Bank claim that all technical indicators signal that the pair USD/JPY will keep declining. Such situation continues since July. In their view, US currency will inevitably go down to retest multi-year minimum at 80.21. The specialists note that US dollar is trading at the lower part of a triangle and is likely to breach the pattern. According to Mizuho, the next question is how the market will react at the all time low of 79.75 hit in 1995. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6384