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September/02/2011- Comments and forex-analytics from FBS

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September/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 02, 2011 5:23 pm

RBC: comments on USD/CAD

Analysts at Royal Bank of Canada say that if Canadian dollar rises too steeply and gets too high versus its US counterpart, it will start affecting the nation’s economy. The negative economic impact, in its turn, will pull loonie lower, so the self-correction will happen.

The specialists don’t rule of the possibility of USD/CAD slipping to 2007 minimum, but they think that the pair won’t stay low for long.

This year Canadian currency had a series of ups and downs. Although in the second quarter Canadian economy contracted by 0.4% on the annual basis, the majority of economists expect this decline to be a short-lived correction.

Comparing 2 nations, Canada has healthier fiscal system and greater weighting to commodities. If commodity sector is strong, loonie will perform quite well. According to RBC, from the point of Canada's economic fundamentals 1.0000/0.9520 range is normal for USD/CAD.

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Mizuho: forecasts for EUR/USD

Currency strategists at Mizuho updated forecasts for EUR/USD. According to the specialists, the single currency will be steadily rising versus the greenback to reach $1.5000 in a year from now. The analysts see euro strengthening to $1.4300 in September and to $1.4650 in 3 months.

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It’s also necessary to note that RBC is concerned about the impact of the euro-zone debt crisis on the global economy. The specialists note that investors have to be prepared for an extended period of slow growth both in the United States and Europe.
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Re: September/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 02, 2011 5:26 pm

UBS, Commerzbank: comments on EUR/CHF

Currency strategists at UBS note that Swiss franc keeps appreciating versus the single currency and US dollar due to the encouraging economic data from Switzerland and the lack of comments from the Swiss national bank. Commerzbank notes that the data indicate that Swiss economy is fundamentally sound increasing demand for franc as a safe haven.

Switzerland's economy expanded 2.3% in the second quarter on the annual basis after gaining 2.5% in the first 3 months of the year. Swiss retail sales grew only 1.9% in July after adding 7.9% in June as Swiss prefer to go shopping abroad.

According to UBS, the pair EUR/CHF may hit the 1.1000 level or get even lower. Analysts at Commerzbank say that if euro drops below 1.1023 it will eased down to stabilize in the 1.0800 area.

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Goldman Sachs changed RBNZ rates forecast

Analysts at Goldman Sachs believe that the Reserve bank of New Zealand will keep official cash rate unchanged at 2.5% until March, while earlier the specialists thought that the central bank will raise the borrowing costs. The RBNZ meeting is scheduled on September 15.

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Re: September/02/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 02, 2011 5:27 pm

NFP disappoints: unchanged in August

The market has certainly looking forward to better Non-Farm Payrolls figures, but the indicator remained unchanged in August, while the economists surveyed by Bloomberg expected 65,000 increase. The unemployment rate remained at 9.1%.

It’s necessary to note that the poor situation at the labor market is one of the reasons why the Fed’s Chairman Ben Bernanke said the central bank still has tools available to stimulate growth. As the result, the possibility that the Federal Reserve launches QE3 has increased.
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