InterIndeks Recommendations

TIS main intrigue of the foreign exchange market last week was focused around the positive attitude of bidders relative to the yen and the negative attitude towards the euro. We are currently considering the market situation as conducive to shopping for a breakthrough in the yen, and sales downward trend in the euro by year-end goal for the euro - 0.95 dollars for yen - 122 dollars. In the short term, we expect the euro to test the lower limit of the recent corridor, and the possible passage of a new kratkoskrochny minimum order of 1.19. The main risk for such a development would, for the euro, the European Central Bank did not change the rate of refinancing in the second half of the year, for the yen - the return of the Japanese central bank intervention to. On Friday, April 2 yen weakened slightly after the Japanese officials issued a "verbal intervention", saying that too rapid growth of the yen hurts Japan's economy recovery.

Euro - Yen

Dominant factors
1) Yen strengthened against the backdrop of recovering Japanese economy and reduce the central bank of Japan intervention
2) Sushestvenny downturn in the market yield evro-ieny/spred EU / JGB is on the five-year minimum
3) Rally in yen slowed in response to verbal intervention and strong macroeconomic data from the U.S..

Trade recommendations: Consider the possibility of selling the rally in the euro-yen to 130, and buying yen to break 106.

Outlook: Japanese Finance Minister Tanigaki said that the Japanese central bank will leave the foreign exchange market if the price will reflect the fundamental data. It is now up to the market - to determine what level would be fundamentally fair. On Thursday the UK Times published an article, in which case the assumption that Japanese officials saw the new target for the yen at 102.50. The strength of the yen stems from several factors, and most important of them - the refusal of the Japanese central bank to participate actively in foreign exchange auction. Speculators in the yen should be paid special attention to the analysis of statements and records of the Japanese central bank in order to pre-determine a change in its monetary policy. The next meeting of the Bank of Japan is scheduled for April 9.

Euro-dollar

Dominant factors
1) ECB decided not to change monetary policy
2) Ambiguity economic situation in the European Union
3) The difference in rates of economic growth the EU and the U.S.

Outlook: We expect the continuation of the basic pair of traffic in the corridor and an easing of the euro in cross-rates. In particular, we expect the euro weakened against the yen, against a background of increasing razbezhki in the growth rate vrozony and Japan. The euro-zone economy seems to be slowly recovering U.S. economy and Japan. Central Europe has left monetary policy unchanged, but does not exclude the possibility of an early review. The major determinant in the overall negative trends in the euro against the dollar next week will be waiting for the revision of rates, Federal Reserve dollars - upward, and the Central Europe - down. We look forward to reducing the rates of the Central Europe in the next few months in response to the slowdown in the European economy. Long-term rates in the U.S. are growing at good data on employment and the expectation that the Bank of Japan will reduce its presence in the market US Treasures, due to the weakening of market regulation yen-dollar. Currently, the Bank of Japan is a major buyer of American debt, which is connected with the necessity of placement of dollar-denominated reserves, formed after the foreign exchange interventions in the local market.
Fundamental data for the euro area to deteriorate against the backdrop of slowing growth and increase the risk of terrorist attacks, which in June is expected that the central bank will lower interest rates for the euro area. We expect that the dynamics on the currency pair will remain volatile and will be developed within a wide corridor.

Pound sterling-dollar

Dominant factors
1) The local macro-economic indicators are strong
2) the next meeting of the Bank of England is scheduled for April 8 /, it is expected that rates would be raised
3) Euro-pound decreases

Trade recommendation: consider the sale of 6720, the goal of 6550, stop 6820.

U.S. Dollar - Canadian Dollar

Dominant factors
1) is expected turnaround in monetary policy the Bank of Canada is a liberal policy of more stringent market regulation
2) Ambiguity of macroeconomic data (good retail sales weak GDP)
3) The market awaits Fed rate convergence and the Bank of Canada Trading Recommendations: We recommend selling the dollar against the Canadian to 134, with a view to 131, and a stop 135. Record profit on long positions in the Canadian dollar, working according to our recommendations last week.

Vista: two-month highs after the upgrade, the initiative of the Canadian dollar once again intercepted the Bears backed by the expectation of reducing the rates of the Bank of Canada and an increase in the rates the Federal Reserve. Last week, Canadian demonstrated positive dynamics on the background of better-than-expected data on retail sales, returning to the national economy of funds received from the sale of oil assets, and reduce the risk of revision of the Bank of Canada, the refinancing rate to decrease. By the end of last week, the Canadian dollar fell on news of a weaker-than-expected Canadian GDP and good data on unemployment in the United States. A weak Canadian GDP returns to the game such a factor, as a threat to the revision of rates of the Bank of Canada. Paradoxically, the good macroeconomic data from the U.S. also increases the threat to the revision of the Federal Reserve rates upward. The possibility of convergence rates of national banks will determine the dynamics of pairs of U.S. dollar - Canadian dollar next week.

Mexican peso - U.S. dollar

Dominant factors
1) The increase in inflation / CPI publication April 6
2) Ambiguity growth slowing reforms
3) Bank of Mexico is of a rigid policy on the currency market

Trade recommendations: we are inclined to consider current trends on the currency pair as a movement in the corridor.

Perspectives: Short-term dynamics of the peso will be determined by policy, the Mexican Central Bank and the prospects for growth in the Mexican economy. Positive data on unemployment in the United States can help ensure that Mexico's economic prospects will also be considered as well. For this currency pair, we expect traffic in the corridor 1093 1130.

Interindeks