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September/14/2011- Comments and forex-analytics from FBS

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September/14/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Sep 14, 2011 1:51 pm

Commerzbank: comments on USD/CAD

Technical analysts at Commerzbank note that the greenback’s decline versus its Canadian counterpart from the parity levels was contained by the 55- and 200-day MAs in the 0.9783/21 region.

The specialists believe that the fact that US dollar managed to find support at those levels means that the minimums in the 0.9400 zone hit at the end of July will remain the long-term lows.

According to the bank, resistance levels for USD/CAD are situated at 1.0042 and 1.0058 (January 31 maximum). If the pair overcomes the latter level and closes above it fir 2 times in New York, it will be poised up to 1.0109/1.0139.

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Credit Suisse, BarCap: the SNB's peg will spur inflation

Analysts at Credit Suisse and Barclays Capital warn that Swiss National Bank’s decision to peg franc to euro threats to flood the nation’s financial system with cash spurring inflation. As a result, the central bank won’t fulfill its goal of price stability.

The SNB has also resorted to such policy in the 1978 when it set the ceiling for franc versus Deutsche mark. That led to a decade of surging inflation – annual price growth jumped from 1% that year to 7.5% by the middle of 1981. In addition, there was a real-estate bubble in the 1980s – in 4 years after the peg was announced the costs of rental apartments bounced by 52%.

Economists at the University of Zurich expect inflation to break above the SNB’s 2% limit during the next 3 years even if Swiss economic growth stumbles.

In August Switzerland’s CPI added 0.2% from the levels of the previous year. By the end of August SNB’s foreign-currency holdings reached the record maximum of 253.4 billion francs ($305.1 billion) that’s about a half of the nation’s GDP.

The SNB is now focusing on the exchange rate than on inflation. As the central bank’s head Philipp Hildebrand said, Swiss policy makers have started “a challenging journey” with possible “very high” costs.

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Re: September/14/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Wed Sep 14, 2011 2:08 pm

UBS: AUD/USD will fall to $1.0111

Technical analysts at UBS note that Australian dollar fell versus the greenback from the recent maximums in the $1.0700 area and breached 61.8% Fibonacci retracement of the advance from August 8 to September 1 at $1.0250. The specialists believe that the pair AUD/USD is on its way down to $1.0111.

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