internationallove

FBS 999 demo contest is about to over in couple of days, in which we have seen plenty of committed traders of different nationalities. A Ukrainian & Malaysian occupying the second and third positions, respectively but like previous contest the Russian contestant still at the top. We are expecting for more excitement and healthy competition amongst our enthusiastic competitors. Account#156514 Position: 1st Country: Russian Federation Balance: 229138.49 USD Account#156892 Position: 2nd Country: Ukraine Balance: 180666.46 USD Check other contestants ranking Go to the scoreboard: http://www.fbs.com/contest/999/participants?type=cur

"Societe Generale: buy euro at 1.34/38"(2011-02-21) Analysts at Societe Generale advise to buy the pair EUR/USD at 1.34 and a sell at 1.38 in the short term. The specialists note that the single currency keeps rebounding from 1.34 helped by the central bank demand. As the Fed’s chairman Bernanke doesn’t regard inflation as the problem for the United States, the country’s monetary authorities are free to promote weak dollar. This, in its turn, will encourage Asian central banks for further euro purchases in order to diversify their currency reserves. Chart. H1 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6269

"Canadian CPI data, USD/CAD range bound"(2011-02-18) Canadian CPI data released today turned out to be in line with the expectations: in January the indicator added 0.3% gaining 2.3% from last year’s level. The core CPI watched by the Bank of Canada to assess inflation trends was below the expected levels: it remained unchanged on the monthly basis showing an annual increase of 1.4%. The market didn’t react much to the release and pair USD/CAD remained at low levels in the narrow range between 0.9820 and 0.9845. Chart. H4 USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/6264

"China increased banks' required reserves"(2011-02-18) The People's Bank of China raised today banks' required reserves by 50 basis points for the fifth time since October staying keen to its intention to fight high inflation. As a result, the country's biggest lenders will have to store the record 19.5% of their deposits at the central bank removing liquidity from the economy that otherwise would make upward pressure on prices. China’s inflation rate rose from 4.6% in December to 4.9% in January. Currency strategists at RBC Capital Markets expect that Chinese monetary authorities will keep conducting tightening measures such as rates hike, increases of the reserve requirements and more rapid yuan’s appreciation. From the global perspective such policy of the world’s fastest growing economy has a negative impact on commodity prices and the currencies of commodity exporters such as Australia. Comment here http://www.fbs.com/analytics/news_markets/view/6262

"UBS: SNB won’t lift up rates"(2011-02-18) Currency strategists at UBS note that the Swiss National Bank is emphasizing its concerns about franc’s strengthening versus the European currency, so its priority is keeping the national currency from excessive appreciation. The specialists think that it’s very unlikely that the Switzerland’s central bank raises interest rates despite the fact that the country’s economy was outperforming the euro zone’s one during and after the financial crisis. The SNB won’t tighten its policy even in case of an upward revision of its economic growth outlook. Swiss franc rose this week from Monday’s low at 1.3203 to 1.2900 today. Chart. H4 EUR/CHF Comment here http://www.fbs.com/analytics/news_markets/view/6260

"Barclays: buy USD versus AUD and NZD"(2011-02-18) Analysts at Barclays advise investors to buy US dollar versus Australian and New Zealand’s currencies saying that there’s the greatest potential in such trading strategy. The specialists believe that the economic growth of the United States may outpace global growth this year. In their view, the greenback that was lagging for a long time begins catching up with the other currencies. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6258

"Morgan Stanley: USD/JPY will climb to 93.00 by the year-end"(2011-02-18) Currency strategists at Morgan Stanley believe that although the greenback didn’t manage to break above 84.00 on Wednesday and retreated lower versus Japanese yen, the pair USD/JPY can rise by the end of the first quarter to 86.00 and finish the year at 93.00. Such forecast is based on the expectations that the yield spreads between US and Japan’s bonds will widen helped by the American economic recovery. As a result, Japanese investors will turn to abroad looking for higher yield than those available at the domestic market and the demand for yen will weaken. In the short term, however, USD/JPY will be trapped in its range as US money supply is growing too rapidly and US interest rates are too low, while the real yen’s rate is not as strong. According to Morgan Stanley, yen will be driven in the coming weeks mainly by the global risk environment and investors’ sentiment about the US currency. Chart. Daily USD/CHF Comment here http://www.fbs.com/analytics/news_markets/view/6256

"Gaitame.com: USD/JPY may fall to 81.00"(2011-02-18) The greenback fell sharply this week dropping from 0.9774 to the October minimum at 0.9477. Technical analysts at Commerzbank believe that the pair USD/CHF is going to bottom in this area and reverse upwards compensating the recent loss over the next few days. The specialists believe that US dollar will be able to return to the resistance in the 0.9774/84 zone limited by the January maximum and the 61.8% of the decline from December. In the longer term, USD/CHF will advance to the December maximum at 1.0067 and the 200-day MA at 1.0170. Chart. H4 USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6254

"Gaitame.com: USD/JPY may fall to 81.00"(2011-02-18) Technical analysts at Gaitame.com Research Institute Ltd. claim that the greenback may fall to the 6-week minimum versus Japanese yen as the pair USD/JPY is still trading within the “triangular” consolidation formation. The pattern is made up by 2 trend lines – the upper connecting the maximums of September 16 at 85.93 and February 16 at 83.98 and the lower joining the minimums of November 1 at 80.22 and February 4 at 81.13. While the pair USD/JPY is staying in the triangle, it may fall to the levels between 83.5 and 81 getting close to the lower border of this range. As a result, the specialists note that US currency is likely to erase 2.7% gain it made this year. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6252

According to the data released today, emergency overnight borrowing from the European Central Bank surged to the 20-month maximum rising above 15 billion euro. The last time it got higher than 10 billion was on June 24, 2009, when it reached 28.7 billion euro. Usually overnight borrowing from the ECB is far below 1 billion euro. It has exceeded this mark twice this year and both times it happened this week. The markets got agitated as the dealers tried to determine whether a bank had made an error in reserves maintenance and tomorrow return to normal levels or if this was an indication of serious problems.

"Societe Generale: comments on USD/CAD"(2011-02-17) Analysts at Societe Generale claim that as long as the pair USD/CAD is trading above support in the 0.9835/0.9820 area, it has all chances to return up to 0.9990/0.9995, especially if it breaks above 0.9915. Currently the pair is close to the 2-week minimum at 0.9831. Chart. H4 USD/CAD Comment here http://www.fbs.com/analytics/news_markets/view/6241

Few days left & Russian traders still leading position (Updates of FBS 999 Contest) Contestants from Russia competing with limited number of participants to enhance their chances to lead. The trader (Account#156514) leading with over 201K USD capital while (Account#156942) at No.2 spot. We wish all of FBS 999 contestants good luck in the contest.. Account#156514 Position: 1st Country: Russian Federation Balance: 201215.15 USD Account#156942 Position: 2nd Country: Russian Federation Balance: 185103.29 USD Check other contestants ranking Go to the scoreboard: http://www.fbs.com/contest/999/participants?type=cur

Commerzbank: pound under pressure below $1.6185 Technical analysts at Commerzbank believe that the pair GBP/USD will stay under bearish pressure as long as it trades below 1.6185. The specialists say that the British pound risks falling to 1.58. If sterling rises above 1.6185, it will get chance to rise to 1.63 where the resistance will intensify. Chart. H4 GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6239

Marc Faber: global stock markets will correct down in 2011 Marc Faber, publisher of the Gloom, Boom & Doom report, who is known for forecasting correctly many significant moves of the market seen in the recent years, believes that in 2011 the global stock markets will survive downward correction. In his view, during the last 18 months we saw huge capital flow in Asia. As a result, the markets became overbought and inflationary pressure has dramatically strengthened. The more such events as those in Egypt occur, the more people start doubting about investing in the emerging economies. According to Farber, money inflows will come back to the developed markets and the US may outperform the emerging economies’ stock markets in the next 3 months. The economist forecasts that MSCI Emerging Markets Index will lose 30% in 2011. As for the US, the S&P 500 index will decline this year by 10%, says Farber. US stocks will be affected by the rising commodity prices, especially oil. The index won’t decrease much as the stocks of oil companies will show strong growth Comment here http://www.fbs.com/analytics/news_markets/view/6237

Investors adjust estimates of the BoE rates hike time The inflation forecast that the Bank of England released yesterday made the economists adjust their forecasts about the terms of the potential rate hike. Generally investors’ expectations of the coming rate hike wave weakened. According to British central bank, inflation will peak at 4.4% this year and before easing to the 2% target level by the middle of 2012 and then even lower. The outlook is based on BoE benchmark interest rate rising from a record low of 0.5% to 1% this year and 2% by the end of 2012. However, the market was still fully pricing in a rate hike by June 9 with at least two 25 basis point rate hikes seen by the end of the year and a 96% chance of rates being 75 basis points higher by January 5, 2012. Some economists also believe that the rate hike will occur sooner than they were thinking earlier. Strategists at Barclays, for example, changed the prediction for the first rate increase from November to May, while the Daiwa Capital Markets change forecast from November to August. It’s not likely that the BoE will raise rates by more than 50 basis points taking into account the country’s weak economic growth, say the specialists. Comment here http://www.fbs.com/analytics/news_markets/view/6236

Pound's up on hawkish comments by Sentence Andrew Sentence, the member of the BoE Monetary Policy Committee, claimed today that the central bank’s inflation forecast released yesterday understate upside risks to inflation. Sentence called BoE inflation outlook “too optimistic”. According to him, in order to meet CPI targets there should be more rate hikes than expected. According to British central bank, inflation will peak at 4.4% this year and before easing to the 2% target level by the middle of 2012 and then even lower. The outlook is based on BoE benchmark interest rate rising from a record low of 0.5% to 1% this year and 2% by the end of 2012. Sentence’s hawkish comments made sterling rise to the day’s maximum in the 1.6130 area. If the pair GBP/USD consolidates above 1.6120, next resistance levels may be founded at 1.6185 (February 7 and 16 maximum) and 1.6230 (February 2 maximum). Support levels are situated at 1.6075/85 (session minimums), 1.5985 (February 16 minimum) and 1.5960 (February 11 minimum). Chart. H4 GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6235

Credit Agricole: outlook for AUD and CHF Currency strategists at Credit Agricole believe that Australian dollar will rise to 1.05 versus its US counterpart by the end of June. In the near term, however, Aussie will find itself under pressure as Reserve Bank of Australia is likely to wait before adjusting its rate policy. The specialists also see the Swiss franc going down as investors are looking forward to the agreement on a permanent European bailout fund at the end of May. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6231

Commerzbank: EUR/USD will fall to 1.3378/61 The single currency went up from Monday’s minimums versus US dollar in the 1.3430 area rising to the levels near 1.3600. However, technical analysts at Commerzbank claim that as long as the pair EUR/USD is trading below the 20-day MA at 1.3645, its move will be regarded as a correction. The specialists believe that euro will fail somewhere between the mentioned MA and last week’s maximum at 1.3745. According to them, the European currency is likely to fall down to the 1.3378/61 region limited by the 55-day MA and the 50% Fibonacci retracement of the 2011 move. Below this level EUR/USD will slump to the 200-day MA at 1.3122. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6229

Fundamental factors for some major currencies EUR/USD The greenback weakened as the minutes of the Federal Reserve’s January meeting released yesterday showed that although US monetary authorities sounded more optimistic about the prospects of US economy, they regard situation at the labor market as still very difficult and underline the necessity of quantitative easing. Chart. H1 EUR/USD USD/JPY The decline of Japanese currency was limited as investors seem to be concerned about the unrest in the Middle East increasing their demand for safer assets such as yen and Swiss franc. This week there were demonstrations in Bahrain, Yemen and Libya after the autocratic ruler in Egypt and Tunisia were overthrown by popular movements. The pair USD/JPY climbed from the minimum at 83.12 hit on February 4 but got stopped by the 83.96 level. Chart. H4 USD/JPY AUD/JPY Australian dollar approached the 9-month maximum trading versus Japanese yen as Reserve Bank of Australia Assistant Governor Philip Lowe claimed that global commodity prices will likely remain at the maximal levels for a long time, so the RBA will have to raise rates acting counter inflation. In addition, yen’s being under pressure because of the widening rate differentials with the rest of the world: the Bank of Japan’s likely to keep the rate at 0.1%, while the RBA’s rate is currently at 4.75%. Chart. Daily AUD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6227

Commerzbank: comments on EUR/CHF The single currency advanced from the minimum at 1.2400 hit at the end of December before last week it faced resistance in the 1.3200 zone. Technical analysts at Commerzbank claim that the pair EUR/CHF is losing its upward momentum. However, as long as euro trades above 1.3000, it has many chances to gain more rising to the 200-day MA at 1.3323. Below 1.3000 euro will be poised to fall to the 1.2780/35 zone. Chart. Daily EUR/CHF Comment here http://www.fbs.com/analytics/news_markets/view/6223

BNP Paribas: sell euro on its advance to $1.3580 Analysts at BNP Paribas advise to sell euro when the pair EUR/USD rises to 1.3580. The specialists note that the European monetary authorities made little progress to reach an agreement on a credible stability mechanism and little sign that the March EU summit will produce results. As a result, the single currency will remain under pressure of the sovereign-debt concerns, so the bank believes that there will be some time before the European Central Bank starts normalizing its monetary policy. Chart. H4 EUR/USD Comment here http://www.fbs.com/analytics/news_markets/view/6221

HSBC: the period of yen’s strength isn’t over The greenback reached yesterday 8-week maximum trading versus Japanese yen at 83.91. Analysts at HSBC note that investors get very excited as the pair USD/JPY managed to break out of the range in which it was trapped since December. The specialists say that US currency’s likely to gain momentum taking into account encouraging US data and rising yields. However, HSBC thinks that this year the pair will keep trading in the 80/85 yen area as the Federal Reserve won’t raise the interest rates in 2011. The period of yen’s strength isn’t over yet, the analysts claim. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/news_markets/view/6219

Societe Generale: pound may weaken on economic data Analysts at Societe Generale claim that the possibility of Bank of England’s turning hawkish is already priced in, so if BOE's quarterly inflation report fails to strengthen the expectations of BoE rates hike, pound will be vulnerable to any weak economic data. It’s necessary to note the number of unemployment claims increased in January by 2,400, while the economists were looking forward to a 3,200 decline. График. H4 GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6217

Mizuho: pound will keep climbing Technical analysts at Mizuho Corporate Bank claim that British pound broke above the “flag formation” approaching 1.6200. The specialists note that all technical indicators show that sterling’s going to keep strengthening. The 26-day MA will continue supporting the rate. According to Mizuho, it’s necessary to buy at 1.6180 looking forward to GBP/USD advance to 1.6250/1.6300 and stopping below 1.5950. Chart. H4 GBP/USD Comment here http://www.fbs.com/analytics/news_markets/view/6216

Moody's put ratings of Australian and New Zealand’s banks under revision Australian and New Zealand’s dollars fell versus their US counterpart as the Moody's Investors Service put the major banks of these countries under review for possible downgrade on concern that wholesale funding will be constrained. Australian banks in question are Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Corp. The mentioned banks currently have Aa1 long-term, senior unsecured debt rating. New Zealand’s banks in question are ANZ National Bank Ltd., ASB Bank Ltd., Bank of New Zealand, and Westpac New Zealand Ltd. The mentioned banks currently have Aa2 long-term senior unsecured debt and deposit ratings. The ratings outlooks for ANZ, Commonwealth Bank and Westpac had been negative since March 2009, and NAB since August 2008, said Moody’s. Analysts at Sumitomo Mitsui Banking expect Aussie’s and kiwi’s declines may be limited. The pair AUD/USD has returned above parity with the greenback, while the pair NZD/USD erased losses approaching the daily maximum. Chart. H4 AUD/USD Chart. H1 NZD/USD Comment here http://www.fbs.com/analytics/news_markets/view/6214