Wednesday, February 28, 2007

Forex News: 28.02.2007 UK Feb consumer confidence index down 1 point to -8

Consumer confidence fell slightly in February as Britons became more pessimistic about the UK's general economic situation.

In its monthly survey, GfK said its headline consumer confidence index fell one point to -8 from -7 in January. Analysts were not expecting any change in the index.

Although three out of the five subindixes within the indicator fell, UK consumers found some comfort in the fact that the Bank of England did not raise rates in February.

The major purchases measure increased by 6 points to +4, while the “now is a good time to save” index rose one point to +35.

Views on the general economic situation of the country during the last 12 months have seen a drop of two points, down to -33. There was also a small drop in expectations for the general economic situation during the next 12 months, with the index falling by one point to -21.

Forex News: 28.02.2007 Annual inflation in the euro area down to 1.8%

Eurostat, the Statistical Office of the European Communities, reported today that the harmonized consumer price index fell in the euro area by 0.5% in January, compared with 0.4% increase in December.

Annual inflation was 1.8%, compared with 1.9% in the preceding month. The analysts expected that annual inflation would remain unchanged 1.9% for the period under report. It is important to note that, in 2006 the level of annual inflation was 2.4%.

Core inflation (consumer price index excluding food and energy) fell in January by 0.8% in a month and rose by 1.8% in a year.

Forex News: 28.02.2007 The number of unemployed in Germany down by 79K in February

According to the data published by the Federal Statistical Office of Germany, seasonally adjusted number of unemployed was down by 79K in February, reflecting positive changes at the labour market.

In the preceding month the number of unemployed decreased by 160K and 35K decrease was expected in January.

Nevertheless, the unemployment rate was still high in Germany. Seasonally unadjusted unemployment rate was 10.1% in February, compared with 10.2% in January. Seasonally unadjusted number of unemployed was 4.222bln in February.

Seasonally adjusted number of unemployed was 3.897bln, while the unemployment rate was down to 9.3%, compared with 9.5% in the preceding month.

Forex News: 28.02.2007 Forex is nervous about fluctuations at stock exchange

“At the moment there is some nervousness at Forex, resulted from yesterday fluctuations at stock exchange. Nevertheless, the drop of major stock indexes, both at developed and developing markets, did not largely influence the currency’s segment, but brought some volatility”, Artem Enshin, NorthFinance analyst comments.

This influenced yen more than other currencies, because the instigator of this situation was China. The decrease of Shanghai index was 8.8%, which resulted from the government’s announcement of limitation of investment into shares and other stock instruments, as well as from the stimulation of capital outflow in danger of the overheating at Chinese stock exchange.

In the course of yesterday American session, yen rose by more than 100 points, to 117.50, but this increase was successfully regained. At the moment yen is traded at 118.50.

British pound sterling also consolidated yesterday. The range was from 1.9675 to 1.9575. With the beginning of European session today, there was slight correction; the British currency is traded at 1.9600.

Euro again rewrote its month maximum and got closer to the level of early January. The maximum was fixed at 1.3260.

Tuesday, February 27, 2007

Forex News: 27.02.2007 U.S. consumer confidence hits five year high in February

U.S. consumer confidence defied expectations and continued to climb in February as Americans said it was easier to find work.

The consumer confidence index rose to 112.5 in February from a revised 110.3 in January. This is the highest level since August 2001.

Economists didn't think confidence could stay so high and had been expecting the index to dip to 107.0.

Consumers were more optimistic about the future in February, with the expectations index rising to 94.8 from 94.4 in January.

Consumers' overall assessment of current conditions improved in February, rising to 139.0 from 133.9 in the previous month.

Forex News: 27.02.2007 U.S. Jan. existing-home sales rise 3%

Sales of existing U.S. homes rose 3% to a seasonally adjusted annual rate of 6.46 million in January, the highest in seven months, the National Association of Realtors reported.

Sales were down 4.3% year-on-year. Resales of single-family homes rose 3.5% to 5.69 million annualized, while condo resales fell 0.1% to 767,000 annualized.

Inventories of unsold homes on the market rose 2.9% to 3.55 million. The median sales price fell 3.1% year-over-year to $210,600.

Forex News: 27.02.2007 Durable goods orders dropped by 7.8% in the USA

In January durable goods orders dropped in the USA by 7.8%, reflecting sudden decrease of consumer confidence in current economic situation. The analysts expected the index would fall by 2.5%.

The preceding reading was also revised. Durable goods orders rose in December by 2.8% (3.1% reported earlier).

Durable goods orders excluding transportation dropped in January by 3.1%, after 2.6% increase in December.

Durable goods orders excluding defense fell in January by 7.8%, compared with 4.0% rise in December.

Monday, February 26, 2007

Forex News: 26.02.2007 EUR/USD keeps ascending tendency this week

“The preceding week was not surprise. EUR/USD is traded in rather limited range of 1.31-1.32”, Artem Enshin, NorthFinance financial analyst says.

“From the beginning of the year EUR/USD has been traded below 1.3000. But euro has tended to rise against dollar for two weeks, while last week we observed the highest level 1.3200.

The ascending tendency is to dominate this week too. The upper border of trade will be 1.3250 and the pair won’t go below 1.3100, which indicates that last week’s tendencies keep steady. No substantial change of currencies’ rates is expected.

This week is rich in both US and European data.

On Tuesday durable goods and consumer confidence for the US are published.

The remarkable news of Wednesday is European and German data. Retail sales are expected to change from positive to negative, which may influence EUR/USD, but insignificantly. The Unemployment rate in the euro area is also released on Wednesday.

The traditional Thursday indicators are jobless claims and ISM index in the USA, while on Friday there is Michigan sentiment index, which is expected to slightly rise.

Nevertheless, macroeconomic indicators are not to greatly influence EUR/USD, the pair will be in the determined corridor ”, NorthFinance analyst considers.

Thursday, February 22, 2007

Forex News: 22.02.2007 The week is to close at 1.3110

The most important news of today is the preliminary GDP in Germany in the forth quarter of 2006, which rose to 0.9% from 0.8% in the preceding quarter. Industrial orders for the euro area in December will be also quite interesting. The index is expected to noticeably fall, from 1.4% to 0.3%.

Today ECB meeting on interest rate takes place. Sergey Popov, NorthFinance financial analyst expects the unchanged kea rate.

The week is to close at 1.3110 with further tendency of lateral trend for the next week, the analyst considers.

Forex News: 22.02.2007 All FOMC meeting participants are concerned about the outlook for inflation

On Wednesday February 21 FRS published FOMC meeting minutes of January 31, when the participants unanimously voted to keep interest rate unchanged at 5.25%.

The Committee says that the economic growth expanded in the forth quarter of 2006, but was uneven in economic sectors. This reflected the rise or personal income and spending as well as labor market improvement. The construction market is frozen but there are signs of stabilization with the rise of demand for residential construction.

Though oil prices influenced the consumer price inflation in December, core inflation slowed down in recent months. Employment largely improved, nonfarm payrolls rose considerably. Nevertheless, employment declined in manufacturing and construction sectors. The unemployment rate was at the same level, 4.5%.

It is noted in the report that all Committee participants expressed concern about inflation outlook, but considered that positive data on core inflation suggest further slowing down in the nearest future. Nevertheless, the Committee participants do not think that inflation downtrend is confirmed.

Having discussed economic development and the outlook for inflation, the Committee voted to keep the interest rate unchanged, defining, however, that “inflation risks remain”.”The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information”, the Committee says.

Wednesday, February 21, 2007

Forex News: 21.02.2007 U.S. CPI rose by 0.2% in January

U.S. consumer prices increased 0.2% in January, led by large increases in food, medical care and tobacco prices.

Core inflation, which ignores movements in food and energy prices, rose 0.3% in January.

The greater-than-expected consumer price index could lessen the odds that the Federal Reserve would cut interest rates. The CPI is up 2.1% in the past 12 months.

Economists were looking for a 0.1% gain on the CPI and for a 0.2% gain on the core CPI.

Forex News: 21.02.2007 Euro-Zone current account EUR2.3 bln in surplus in December

The euro zone's current account became proficit in December, as surpluses in goods and services offset a deficit in current transfers.

According to figures released by the European Central Bank, the seasonally-adjusted current account was EUR 2.3 billion in surplus, compared with a revised EUR0.9 billion surplus in November.

For 2006 as a whole, the euro zone's current account was EUR16.2 billion in deficit, compared with a deficit of EUR6.8 billion in 2005.

Forex News: 21.02.2007 Interest rate in Japan is going to support major currency pairs against yen

“Japan increased its interest rate by 0.5%, which created intensive yen volatility, in particular, in yen crosses. GBP/JPY rose in the initial minutes by 235.70 and fell later by 233.85, while at the moment it is traded at 235.95”, Sergey Popov, NorthFinance financial analyst comments.

“The decision to rise interest rate in Japan is most likely to support major currencies against yen. The most interesting event will be the achievement of GBP/GPY, which may rise by 240yen per pound by the end of the week. This movement will be also supported by the consolidation of British currency toward American dollar.

As for macroeconomic indicators, today current account in the euro area as well as the consumer price index in the USA is interesting.

The market participants will pay attention to FOMC meeting decision, which takes place at 10p.m. (Moscow time). The analysts expect that the members of the committee will speak of US economy, paces and directions of its development. Probably, Bernanke won’t be successful in persuading the market participants of stable economic development in the US. This may heavily influence American currency. ”

Today EUR/USD aims at 1.32, under the circumstances and closing at 1.3220, the pair will form new level 1.3150-1.3170, which may remain for several months.

Gold prices changed to $660/oz, which is an expected correction from the level of $670 and, perhaps, the top of the figure “head - shoulders”, which is formed during day diagrams”, NorthFinance analyst admits.

Tuesday, February 20, 2007

Forex News: 20.02.2007 Jan. U.K. budget deficit increased to 21.4 GBP

The U.K. government budget current budget deficit rose in January to GBP 21.4 billion, up from GBP 13.4 billion proficit in the previous month.

The current budget deficit is important as it is the measure used to see whether the treasury is complying with its own fiscal rule, that current spending and borrowing should be in balance over the economic cycle.

For the fiscal year to date the current budget deficit stands at GBP 8.1 billion, compared with a full-year target of GBP 7.9 billion.

Forex News: 20.02.2007 The Forex market is going to be speculative today

Sergey Popov, NorthFinance financial analyst: “The significant news of today was PPI for Germany, which was up to analysts’ expectations. Budget deficit for Britain (PSNCR) is also interesting today. In the preceding month, the index was 13.4bln stg, this month it is expected to drop significantly, to -21.9.

But the market’s attention will be dwelled to the gossips whether FOMC increases its interest rate or keeps it unchanged.

The market is going to be strictly speculative today, the volatility is expected. EUR/USD is traded in the corridor 1.315, GBP/USD - 1.95, USD/JPI - 120”.

Forex News: 20.02.2007 Producer prices in Germany on two-year minimum in January

Producer prices did not change in January, which was up to expectations, the Federal Statistical Office reported today. In December monthly change of producer prices was also 0.0%.

The annual change of producer prices was +3.2%, minimum since December 2004 (+2.9%). The analysts expected that annual growth of producer prices would be +3.3%.

In December annual change of producer prices was +4.4%, in November +4.7%.

The producer-price inflation slowed down in Germany to its two-year minimum after energy costs declined. Crude oil prices were 14% lower in January than in the corresponding month of the preceding year. Prices for oil-related products fell by 5.1% in a year.

Producer prices excluding energy costs rose in Germany by 2.9% in a year.

Friday, February 16, 2007

Forex News: 16.02.2007 Trade balance surplus in the euro area was up to expectations

The surplus of trade balance in the euro area was EUR2.5bln in December, compared with 5.1bln in November, Eurostat reported today. November reading was revised from EUR3.1bln. The published data was up to analysts’ expectations.

Seasonally adjusted exports rose in the euro area by 3.3% in December, imports by 6.7%.

Over the year 2006, the deficit of trade balance was EUR8.2bln, compared with the surplus of 16.2bln in 2005.

Thursday, February 15, 2007

Forex News: 15.02.2007 Great possibility continuation of dollar downtrend

Georgiy Fedotov, NorthFinance financial analyst: “As it was expected yesterday, dollar rate decreased toward euro and achieved 1.3156. Confident breakout of 1.3160 will indicate further movement to 1.3270.

Besides, Ben Bernanke admitted in his statement that inflation’s pace slowed down. This indicates the possibility of interest rate’s decrease this year, and this conclusion also influenced American currency. The general negative of US economic data confirms the possibility of continuing dollar downtrend.

Today there is plenty of news for the USA, and if below expectations, they negatively influence dollar rate. Traditionally, jobless claims are published on Thursday, the index is expected to fall by 2K, from 311K to 309. NY Fed Empire State manufacturing index will also draw attention, which is expected to rise from 9.1 to 10.5.

TICS will also fall, from $68.4bln to 59bln. The index of industrial production was 0.4% in the preceding month, it is expected to fall by 0.0%. Philadelphia Fed index is expected to decrease from 8.3 to 4.0”.

Wednesday, February 14, 2007

Forex News: 14.02.2007 U.S. business inventories flat in December

U.S. businesses worked down their inventories in December after a sharp buildup in previous months.

Inventory tlevels were unchanged, as expected, while sales increased 1.3%. It's the slowest growth in inventories since July 2005.

The inventory-to-sales ratio fell back to 1.28 in December from 1.30 in November. It's the lowest level of inventories in relation to sales since August.

In the past year, business sales are up 4.4%, while inventories are up 6%.

Forex News: 14.02.2007 U.S. retail sales flat to begin the year

U.S. retail sales fizzled at the beginning of the year, with big declines in auto and gasoline sales offsetting healthy sales at the mall.

Sales were up 2.3% compared with January of 2006. Sales excluding autos rose 0.3%.

The results were far below expectations. The forecast of economists predicted headline sales would rise 0.6% and ex-auto sales would rise 0.5%.

Sales in December were revised higher by a total of 0.1 percentage points. In December, total sales increased 1.2%, and 1.3% excluding autos.

Forex News: 14.02.2007 BoE: Inflation will be volatile

At the meeting of BoE Monetary Policy Committee in January the kea rate was left at the same level 5.25%, because the inflation is expected to slow down at the medium term, though at the near term inflation is likely to be rather volatile. BoE says it in its quarterly inflation report, released today.

As a whole, inflation risks are appreciated as balanced, but there are uncertainties. Some of them are connected with behavior of wages and prices in conditions of robust demand growth and abrupt fall of companies’ costs (excluding wages).

The report says that the perspective of inflation is uncertain as in November, when the last inflation projection was made. In the nearest future, inflation pressure may reflect retail prices for gas and electricity. In December inflation was 3% (above the target) and reflected high gas, electricity and food prices.

Thus, the inflation pressures may be strong in the near term, but fall abruptly in the medium term reflecting the drop in gas and electricity prices.

UK GDP increased by 0.8% for the forth quarter, as a result of strong growth in services sector and slowing down in manufacturing and energy sectors. The surveys show that in the first quarter of the year GDP will reveal robust growth.

Forex News: 14.02.2007 Claimant count fell in Great Britain in January

Claimant count fell in Great Britain in January by 13500, compared with minus 9300 in the preceding month (revised from 5500).

Claimant count rate was in January 2.9%, down 0.1% from the previous month. The index was expected to keep 3% rate.

Average earnings were in three months to December 4.0%, down 0.1% from the preceding period.

ILO jobless rate for three months to December was 5.5%, compared with 5.6% in the preceding period (revised from 5.5%). The number of unemployed for October -December was down by 23K, to 1.687bln.

Forex News: 14.02.2007 EUR/USD fixed at month maximum

“After release of international trade in the USA yesterday, which was far below expectations, EUR/USD rate rushed upwards and fixed at its month maximum”, Georgiy Fedotov, NorthFinance financial analyst says.

“Let us remind that the deficit of international trade achieved its record maximum for a year and was $61.2bln.

In case of confident breakout of 1.3070, the nearest aims are 1.3118, 1.3160, and further 1.3270”, NorthFinance analyst considers.

American currency is pressed by high oil prices and strong macroeconomic data for the euro area, as well as by EUR/GBP and national currencies of Canada, New Zealand and Australia.

Today Ben Bernanke speaks at the Congress. It is also important to note the release of quarterly report of BoE, claimant count rate in Great Britain, as well as the index of retail sales and business inventories in the USA.

Tuesday, February 13, 2007

Forex News: 13.02.2007 U.S. trade gap widens to $61.2 bln in December

The U.S. trade deficit widened in December and swelled to a new annual record, a government report showed. The nation's trade gap widened by 5.3% in December to $61.2 billion. Analysts had expected the deficit to increase to $59.5 billion.

Despite the improvement in September through November, for all of 2006, the U.S. posted a record trade deficit of $763.6 billion. This compared with a deficit of $716.7 billion. But in a sign that the trade gap could be stabilizing, the deficit was 5.8% of gross domestic product in 2006, the same percentage as in 2005.

In December, imports rose faster than exports. As economists had forecast, imports of petroleum products rose sharply and exports of civilian aircraft declined. Imports increased 2.1% to $186.7 billion. December exports rose 0.6% to $125.5 billion.

Forex News: 13.02.2007 German ZEW index rises to +2.9 pts in February

The ZEW research institute said its economic expectations index for Germany rose 6.5 points from a month earlier to +2.9 points in February, signaling the German economy will pick up speed later this year.

However, the result came in below the consensus forecast of economists, who had predicted a stronger increase to +9.0 points.

The ZEW index measures the confidence of analysts and institutional investors about Germany's economic activity in the coming six months.

Analysts seem to assume that domestic investment spending will develop dynamically and that consumer spending will stabilise.

Forex News: 13.02.2007 Preliminary GDP was above expectations in the euro area

Preliminary GDP in the forth quarter was 0.9%, compared with 0.5% in the preceding quarter, Eurostat, the Statistical Office of the European Communities reported today. The index was expected to rise by 0.6%.

Seasonally adjusted annual GDP was 3.3% in the forth quarter, in the preceding quarter the index was 2.7%.

Over the whole year 2006, GDP was 2.7% in the euro area, compared with 1.4% in 2005. The Eurostat admitted that annual indexes for the forth quarter and over the year 2006 in the euro area were below the US data. At the annual rate US GDP rose by 3.4% in the forth quarter. Over the year 2006, US GDP growth was 3.4%, compared with 3.2% in 2005.

Forex News: 13.02.2007 HIPC inflation in UK slowed down

According to the report of the National Office of Statistics, in January the harmonized consumer price index (HIPC) for Great Britain was -0.8%, compared with +0.6% in December. Annual HIPC inflation was 2.7%, compared with 3.0% in the preceding month.

As the National Office of Statistics noted, transport costs, air travel fares, as well as prices for food and non-alcoholic beverages reduced considerably.

The index of retail prices was in January -0.5% in a month, compared with +0.8% in December. Annual retail prices dropped from 4.4% in December to 4.2% in January.

Annual RPIX inflation (retail prices excluding mortgage interest payments) was 3.5% in January, down from 3.8% in December.

Forex News: 13.02.2007 Confident breakout of EUR/USD will indicate the tendency of developments

“Today the attention is dwelled on two indicators: ”ZEW economic expectations index in Germany and International trade in the USA”, Georgiy Fedotov, NorthFinance financial analyst says.

“ZEW economic expectations index in Germany unexpectedly increased in the preceding month and was -3.6. In February it is expected to rise substantially again, by 9. The economists consider that the index rise is largely connected with the improving conditions at the labor market and positive expectations regarding the growth of personal income.

The index of international trade in the USA is expected to be -59.6 in December. November reading was -$58.2bln.

Hopefully the data is to influence dollar rate toward euro, as the pair has been traded in narrow range of minimum 1.2864 and maximum 1.3065 for a month.

Confident breakout to either side will indicate the tendency of developments. We expect the pair leaves the corridor,” the analyst admits.

Forex News: 13.02.2007 Federal budget surplus widens to $38.2 billion in January

The U.S. federal budget surplus widened by 82% in January to $38.2 billion from $21 billion a year earlier.

The surplus is slightly below the Congressional Budget Office estimate of about $40 billion.

January usually as a surplus month because many individuals must make estimated tax payments.

Receipts rose 13% year-over-year to a record $260.6 billion, while outlays increased 6% to $222.4 billion.

For the first four months of the 2007 fiscal year, the deficit was $42.2 billion, about 57.2% lower than the $98.4 billion deficit in the same period in the previous fiscal year.

For all of 2007, the CBO estimates a shortfall of about $200 billion, narrower than the $248 billion deficit in fiscal 2006.

Monday, February 12, 2007

Forex News: FX Steadies Ahead of Data Filled Week

The greenback kicks off the week in mixed fashion, firmer against the yen and sterling but softer versus the euro. The US economic calendar resumes following last week’s drought. Markets will digest the December trade deficit, January retail sales, December TICS data, January industrial production, February Empire State manufacturing survey, February Philadelphia Fed index, January PPI, housing starts, building permits and the University of Michigan consumer sentiment survey. Another key point of focus for the currency market will be Fed Chairman Bernanke’s testimony before the House and Senate on monetary policy. In light of recent improvements in the US economic outlook, the likelihood of a Fed rate cut in the first half of 2007 have largely dissipated. However, we continue to anticipate a 25-bp rate cut in either the October or December policy meeting this year.

According to the CFTC IMM futures data, speculators for the week ending January 30th reduced their net dollar short positions against the euro, sterling, and Aussie. Speculative net longs for euro contracts fell by almost 25% to 45,930 contracts compared with 61,010 contracts from a week earlier. Net long contracts in GBP fell slightly to 92,728 compared with 94,728 contracts from the prior week. Speculators also reduced their holdings of AUD long contracts, with a net 61,245 long contracts, down nearly 21% from a week earlier at 77,248 contracts. Meanwhile, carry trades remain favored as evident in the CFTC futures data, with net short yen contracts edging up to 173,005 contracts up slightly from the prior week at 164,860 contracts.

Forex News: 12.02.2007 Producer prices rose above expectations in Great Britain

In January output producer prices rose in Great Britain by 0.3%, compared with the preceding 0.2%, the National Office of Statistics reported today. It was expected that monthly output producer prices would not rise above 0.2%. Nevertheless, annual producer price inflation slowed down to 2.1% in January from 2.2% in December.

Output producer prices excluding food, tobacco, drink and petroleum rose in January by 0.2%, compared with 0.1% in December. Annual output producer prices excluding food, tobacco, drink and petroleum fell to 2.2% from 2.3% in the preceding month.

Input producer prices, which do not include labor costs, fell in January by 2.0% in a month and 1.7% in a year, with expectations of 1.1% decrease in a month and the preceding reading of 0.1% rise in a month and 1.9% in a year.

Saturday, February 10, 2007

Forex News: Yen Remains Weak

The yen remains weak against other major currencies on Friday as no specific talks about foreign exchange have been made at G7 meeting up till now.

As US treasury secretary Henry Paulson clarified his view on the Japanese yen, market expectations for a G7 consensus on yen weakness are dampened. Japan and US indicated that the yen will not be the focus of the G7 meeting. Only European countries keep calling for a stronger yen. We do not expect G7 statement will mention yen weakness. However, any surprise from the meeting will cause a movement in the market, therefore investors keep cautious over the weekend.

USDJPY encounters interim resistance at 121.80, backed by 122 and 122.30. Subsequent ceilings will emerge at 122.50, followed by 122.70. On the downside, support begins at 121.50 and 121.30, followed by 121. Additional floors are eyed at 120.50, backed by and 120.

Friday, February 09, 2007

Forex News: 09.02.2007 UK trade deficit widens to 7.1 bln pounds

British goods trade deficit has widened in December to 7.1 billion pounds from 6.9 billion pounds in November.

The balance with the EU countries has also increased to -GBP 2.8 billion from -GBP 2.5 billion the month before to offset the slight improvement on the deficit with the non-EU countries which decreased to - GBP 4.3 billion from -GBP 4.4 billion in November.

The overall trade deficit for the entire 2006 year grew to -GBP 55.8 billion from - GBP 44.6 billion the previous year.

Forex News: 09.02.2007 No chance for dollar consolidation

“Rising oil prices left no chance for dollar consolidation”, Artem Enshin, NorthFinance financial analyst.

“Oil rose by $2/a barrel to the level of 60.32 during American session yesterday. In connection with this, oil prices have no tendency to decrease in the nearest future. The attempts of OPEC not to allow prices’ decrease and increased demand of major countries, the consumers of energy resources, produced their effect.

Gold again aims at its price maximums. In six months gold prices were fixed at $660/oz, during the last weeks the prices rose by $10.

The continuing balance of interest rates in the USA and Europe keeps the pair eur/usd in the corridor 1.2900-1.3100. The increase of interest rates in the USA is not expected in the nearest future, which is the reason for dollar weakening and euro rise toward the upper border of the corridor with further aim 1.33.

For two weeks we see the correction of British pound sterling, which dropped by 400 points since January 23, I do not forecast its breakdown. I consider that the sentiment toward pound rise dominates the market.

Yen is at its maximums, fixed at the end of 2005, and earlier in 2002. The current level of resistance 1.22, where it is traded at the moment, is rather solid. The determined aim of usd/jpi 118.

It is important to note that the index of wholesale prices in Germany was at the same level 0.0% in January. The significant news of today is trade in goods in December. The analysts expect its rise from -6.9bln from -7.2bln in the preceding month”.

Tuesday, February 06, 2007

Forex News: 06.02.2007 German manufacturing orders fall 0.2% in December

German manufacturing orders unexpectedly fell on the month in December as foreign orders declined, the German Economics Ministry reported. The volume of new orders slipped 0.2% on the month - below economists' forecasts of a 0.5% monthly gain.

Ministry also revised down industrial orders data for November. Orders rose 0.8% from October, compared with a 1.5% gain previously reported.

Domestic orders rose 0.2% on the month in December, while foreign orders decreased for 0.4%.

Forex News: 06.02.2007 Retail sales in the euro area below expectations in December

The index of retail sales in the euro area was below expectations in December, amounting to 0.3% in a month and 2.1% in a year, Eurostat, the Statistical Office of the European Communities reported today.

In the preceding month, the index of retail sales was in the euro area 0.5% in a month and 1.3% in a year. The index was expected to rise by 0.9% in a month and 2.1% in a year in December.

The index of retail sales of food, drink and tobacco rose by 0.3% in a month and 0.1% in a year. The index of retail sales in non-food sector increased by 0.3% in a month and 3.3% in a year.

Though the index was below expectations, retail sales grew substantially toward the preceding month, which indicates the balance of personal spending and consumer demand in the euro area.

Monday, February 05, 2007

05.02.2007 Activity in services sector achieved six-month maximum in the euro area

PMI services, based on the survey of RBS and NTC Research Eurozone Services, was in the euro area 57.9 points in January, compared with 57.2 points in the preceding month.

The analysts expected the decrease of index, reflecting business activity in services sector, to 56.9 points, but it achieved its six-month maximum in January. Let us remind that the reading above 50 points reflects activity rise, below 50 indicates slowing down.

The index of enmpoyment in the euro area was 54.3 points in January, compared with 53.7 points in the preceding month. The price index rose to 54.0 points from 52.7 points in December. The index of expectations increased to 67.8 points from 65.3 points in the preceding month.

05.02.2007 The ascending trend of eur/usd will dominate this week

“From the beginning of the year, eur/usd has continued to be in the range of 1.2850-1.3050”, Artem Enshin, NorthFinance financial analyst comments. “In the nearest future it is not worth expecting the breakout of boundary levels toward either side. The corridor is designated very precisely. The consolidation of dollar against euro is characteristic of Friday from the level of resistance 1.3050 to 1.2950.

We expect the domination of the ascending trend of eur/usd to the upper border of the corridor during the week.

It is important to note that last week oil prices left the point, which was critical for producer, and came again to $59/a barrel, which is up to minimum prices for six months. The inconsistency of OPEC member-countries’ actions does not allow us to expect further rise of oil prices. At the moment the potential rise of oil prices is limited by $64/a barrel.

Gold still keeps high prices of $650/oz. This indicates that investors are not inclined to rely on dollar and preserve their assets in precious metals.

The week is saturated with news. One of the major events is trade balance in Germany on Thursday, the index is expected to drop from 18.5bln to 16.5bln. The Forex market also awaits the results of BoE and ECB meetings. We expect unchanged interest rates.

Today it is important to pay attention to the ISM services index in the USA”, the analyst says.

Sunday, February 04, 2007

Forex News: 02.02.2007 Nonfarm payrolls in the USA in January below expectations

The number of new jobs excluding agricultural sector (nonfarm payrolls), rose in the USA by 111K in January, compared with 206K in the preceding month (revised from 167K), the Ministry of Trade reported.

On the ground of the preliminary December data (167K), the analysts expected the rise of indicator by 150K in January. The increase of average hourly wages was in January 0.2% ($17.09), compared with the growth by 0.4% (17.06) in the preceding month.

The unemployment rate was in January 4.6%, compared with 4.5% the month before. The substantial decrease of indicator indicates employment decline, which can contribute to major currencies growth toward dollar.