USDCHF, USDCAD last week results and recommendations

On Monday the main event at the auctions in Asia became a military incident, when the Republic of Korea Navy conducted a study of fire near the island Yonkhendo whose status is still undefined, and therefore considered to be controversial.

These exercises have caused negative not only its northern neighbor, but also military observers in Japan, China and Russia.

Recall that at an emergency meeting convened on Sunday the UN Security Council, in order to reduce tensions and avoid further conflict, the parties failed to reach agreement on the application.

It should be noted that the absence of any immediate retaliation by North Korea in response to military exercises in South Korea, does not mean that such actions will be taken by the DPRK some time later.

The outcome of these events was the fall of Asian stock markets, as well as the outcome of investors from risky assets. Recall that ienovye cross universally experienced selling pressure. In addition, strong publication from the Land of the Rising Sun have also increased the growth rate of Japanese currency.

Thus, according to these publications, the final value of the composite index of leading indicators in Japan in October, when the preliminary value of 97.2, was 97.7. Whereas the final value of the composite index of coincident indicators in Japan in October, when the preliminary value of 100.7, was 100.8. 

In early European trading statistics from Germany, which had previously supported the bullish mood of the players at this time was not as impressive. So, as published Monday, the index of industrial prices in Germany in November amounted to +0.2% for the month, +4.4% per year, while waiting experts were +0.3% for the month, +4.5% for the year and the previous value was equal to +0.4% MoM, +4.3% per year.

Recall that the last occasion to bullish activity was the news that the EU leaders, in order to prevent the spread of the problem that was born more than a year ago in Greece, in Brussels last week agreed to amend the contract unit to create a permanent mechanism for crisis in 2013 year.

It is noteworthy that the yields on government bonds in the region rose even after it had established a fund worth 750 billion euros, while Greece and Ireland were saved.

Strengthening the global bear sentiment quite objectively reflect the price of "yellow metal", which continues to gradually rise in price of commodity exchanges as there are new sources of geopolitical instability, as well as on news of failed efforts of European countries to control the manifestations of the debt crisis.

So, gold for February jumped in price on Monday directly at 6.90 dollar to a level of 1386.10 dollars per ounce. Most other precious and industrial metals also traded slightly higher.

In this regard, market participants are sufficiently closely followed the release of new report on Monday that the European Central Bank has sharply reduced their purchases of bonds weaker countries, including Greece, Ireland and Portugal.

At the same time, "the flames of" fears of investors re-add the rating agency Moody’s, which this time said that may lower the debt ratings of Spanish banks, which require financial support from the government.

As a result, investors continue to fear that countries such as Greece, Ireland, Portugal and Spain, and then perhaps Belgium and Italy, would have a serious problem of repayment of their debts.

The main event in the Asian session Tuesday was a regular meeting of the Governing Board of the Bank of Japan. Recall that in the end the target range for the basic interest rate on overnight loans was left unchanged at 0.00% -0.10%, with a statement of the Bank of Japan stated that the country’s economic recovery is "at a moderate pace."

It should be noted that the Governor of the Bank of Japan said at a news conference that the recent rise in the dollar / yen, "reflects a more optimistic outlook for investors in the prospects for the U.S. economy."

Recall that the generalized index of industrial production in Japan in October amounted to -0.2%, while the forecast was -0.2% and -0.8% the previous value.

Another factor in the growth of major currencies against the dollar and the yen have become a statement Vice-Premier of China, whereby China is ready to provide concrete assistance to the EU in settling the debt crisis.   

These statements, however, maintained a bullish mood for long. So, this afternoon in Eurocurrency again began to dominate sales. In addition to the euro, under the pressure of sales and was the British sterling.

Recall that the rate of the pound / dollar fell on the European session with the level of 1.5565 to 1.5450, its lowest level since September of this year, while the rate of the pound / Swiss franc fell by 160 points to a new record low of 1.4821.

Note that the pressure on the pound have primarily published in the UK data showing a record increase in the budget deficit.

Recall that the budget deficit in the UK in November amounted to +23.3 billion pounds, while the previous value was only +10.3 billion pounds.

The index of consumer confidence in the UK in December amounted to -21, while experts predicted -22 and the previous value was equal to -21.

It should be said that pressure on the single currency has also had a message that the rating agency Moody’s was considering lowering the credit rating of Portugal. Agency experts have declared that the country’s rating may be lowered by one or two points.

Recall that the rating agency Fitch has said previously that it may downgrade the credit rating of Greece.

In addition, Moody’s has previously stated that it may reduce the rating of the Spanish banks.

In general, it should be noted that on the eve of Christmas and New Year sales activity in the forex market are low, which in turn contributes to a sharp exchange rate fluctuations.

Bidding on Thursday held against the backdrop of an abundance of statistical data. Because of the shortened week, the U.S. and some European countries the publication of macroeconomic indicators have been moved from Friday to Thursday.

On the background of the fact that Japan had a day off, and the financial markets in the country closed for other Asian markets there was a decrease of quotes. Thus, the index of the Hong Kong stock exchange’s Hang Seng (-0.74%) fell 171.20 points, to 22873.99.

At the same time during Asian trading in major currencies, there has been growth, sponsored by the statement made by the Ministry of Foreign Affairs of China that the PRC government intends to support countries in the euro area on their way to overcome the debt crisis.

As a result, the background of rather low activity in the market, the dollar was under pressure against other currencies. Recall that the dollar / yen during trading in Asia, down from the level of 83.56 to 82.84, and the rate of the pound / dollar rose to 1.5388 marks from 1.5433.

The first publication of the eurozone have been statistical data from France, which proved to be quite mixed. Recall that the index of consumer spending in France in November amounted to +2.8% MoM, +1.5% per year, whereas the forecast was +1.0% MoM, -0.4% for the year and the previous value of -0.7% for the month, -0.3 % per year.

Producer Price Index in France in November amounted to +0.4% MoM, +4.5% per year, whereas the forecast was +0.5% MoM, +4.6% for the year and the previous value of +0.8% for the month, +4.3% per year .

Sentiment in favor of selling began to change after it became known that the net UK mortgage lending by banks in November was at its lowest level in 10 years.

The reason for this, experts see a decline in demand for new homes has slowed, which is typical for this time of year, according to the British Bankers’ Association.

In addition, the seasonally adjusted net mortgage lending rose 1.5 billion in October – the smallest increase from 1.3 billion pounds in August 1999, against 1.7 billion in October and 2.8 billion pounds a year earlier.

In general, according to economists, the strict lending criteria and concerns about the increase on such a large debt to the uncertain outlook for the 2011 year, also put pressure on investors.

As a result, the prospects for the housing market continues to remain low, and the number of approved loan applications fell again in November to 29,991, its lowest level since March 2009 and lower than 30,689 in October and 43,893 in November last year.

However, the markets came under the control of bears after Fitch Ratings downgraded the credit rating of Portugal, referring to the debt problems still facing the EU. Recall that this problem in the fiscal area of Portugal were identified as major, when Fitch downgraded the country’s credit rating to A + with a negative outlook.

Publications from the U.S. were quite mixed, which, however, did not prevent the dollar strengthened to a regular two-week high against the single currency, and re-test the two-month highs against the pound.

Recall that the number of sales of new homes in the U.S. in November amounted to 290 thousand, while the forecast was 300 thousand, and the previous value of 283 thousand

The final consumer sentiment index value of the University of Michigan in the U.S. for December 74.5, while economists forecast a 74.5, the previous value of 74.2.

Also recall that the number of applications for unemployment benefits in the U.S. for the week to 18.12, was 420 thousand, while the expected 420 thousand In this previous value was revised from 420 thousand to 423 thousand

Unpleasant surprise the index gave orders for durable goods in the U.S. for November, which, with the forecast -0.6% was -1.3%. In this case, the previous value was revised from -3.3% to -3.1%.

Celebrating Catholic Christmas on Friday resulted in low activity and very small volumes of trades in the currency markets.

Due to the holiday on Friday did not work the U.S. markets, and some European countries, particularly Germany.

At the auctions in Asia, despite the decline in Asian stock exchanges, eurobulls tried to restore the upward trend in the Eurocurrency. Recall that the index on the Tokyo Stock Exchange Nikkei fell 67.29 points (-0.65%) and closed at 10279.19, and the yield on 10-year Japanese government bonds is increased by 1.150 from the previous closing on 0.010.

Recall that the euro / dollar is set at the Asian session near the 1.3130 mark, while the dollar / yen is in the range 82.89-83.13.

At the same time, growth in world oil prices provided some support for courses commodity currencies. Recall that the price of oil in New York reached the mark of 91.50 dollars per barrel, the maximum over the past two years, while the Australian dollar / US dollar has stabilized above $ 1.0000 in the range 1.0019-1.0044.

The focus of attention in the course of trading in the European session proved to be Ireland. Recall that the Supreme Court of Ireland said on Friday that the bank Allied Irish Banks Plc can be taken under government control the country without the approval of its shareholders, thus becoming the fourth bank in the country got under state control since 2008.

Recall that the Irish finance minister Brian Lenihan has been approved by the court to inject into the bank 3.7 billion euros in the period until 31 December and to increase the government stake in the bank from 19% to 92%.

Note that the bank Allied Irish Banks Plc is the largest Irish company by market capitalization in 2007. However, over the 22 months it fell dramatically. So, if in 2007 it cost 21 billion euros, to date, its market value is estimated at 347 million euros.

Negative news from France, offset by the efforts of the bulls, and reinforced the position of the bears. Recall that the number of people in France have been left without work and those who can not find it rose by 0.8% over the month. in November to 2,698,100.

In this case, only in November at 21,300 more people have acquired the status of unemployed and actively seeking work in November, which was the largest monthly increase since the peak of 0,8% growth in May.

These findings debunked the statement of the government of President Nicolas Sarkozy, who last month stated on the improvement of unemployment and continued stabilization of the country’s labor market.

Experts point out that in general the unpopular Sarkozy and his Conservative Party in dire need of improving the situation of unemployment in the near future, as France prepares for new presidential and parliamentary elections in mid-2012.

Continues to recommend buying a couple of dollar / canada dips to the level of parity, opening cautious "Long" is from current levels. We recommend that you hold the position long term in order to 1.0560.

In a couple of dollar / franc buy signal will definitively formed only after overcoming a course mark of 0.9720, after which should be considered a long-term "Long."

Again recall that the long-term growth targets Dollar / Canadian and U.S. dollar / franc mentioned in previous reviews, respectively, 1.0300 and 1.1120, still remain in force