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Old 25-06-2010, 07:55
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Default 24/06/10

[COLOR="Green"]RBS: euro will lose 20% versus the greenback[/COLOR]
Analysts at RBS Securities Japan Ltd. in Tokyo expect the single currency to lose 20% trading versus the greenback. The specialists claim that the attempts of European countries to cut sovereign debt will harm economic growth and trigger deflationary pressure.
According to RBS, as far as it’s possible to judge by interest rates and inflation differential euro is still expensive against US dollar and may remain so even after 20% depreciation.
European currency declined by 14% in 2010. The economists say that European economy may eventually benefit from euro’s decline. RBS forecasts that euro area’s economy will gain 1.2% in 2010 and 1.3% in 2011, while the US one is thought to grow by 3.4% and 4.3% respectively and Japan – by 3.2 % and 1.8%. In Europe Germany that accounts for one third of the currency union’s economy will be at the head of fighting the crisis.

[COLOR="green"]Commerzbank: GBP/USD – neutral/positive trend[/COLOR]
British currency hit its minimum at 1.4685 in the beginning of the week and then gained strength rising to Asian session’s maximum at 1.5000 on Wednesday.
Technical analysts at Commerzbank claim that the trend for the pair GBP/USD is now regarded as neutral/positive as long as pound stays above the 20-day MA at 1.4674. The specialists underline that sterling climbed above resistance at 55-day MA and ruined 6-month downtrend.
If the pair goes up, Commerzbank places key resistance zones at 1.5240/50 (double Fibonacci retracement) and 1.5445 (the top of the 7-month channel). If the rate approaches to the latter, pound is likely to reverse.

[COLOR="green"]USD/CAD: comments[/COLOR]
The greenback rose versus its Canadian counterpart from Monday’s minimum at 1.0135 to the new 2-week maximum at 1.0460. During Asian trade and at the beginning of the European one USD/CAD consolidated at 1.0400 reflecting the Fed’s decision to keep the main interest rate at the minimal level on the deterioration of financial environment.
The analysts claim that the uptrend is still intact. The situation, however, would be more certain if US dollar could climb above 1.0375 and 1. 0311. Support levels are found at 1.3075, 1.0315 and 10311. If the rate goes up, resistance levels will be found at 1.0418, 1.0455 and 10500.

[COLOR="green"]BNY Mellon: yen’s gaining after the Fed’s announcement[/COLOR]
Japanese currency advanced versus the greenback as investors’ demand for it as a safer asset went up.
According to yesterday’s report, US new homes sales contracted in May by 33%. Such slump can be explained by the expiration of tax credit that means the market is still vulnerable without government’s help. Currency strategists at Bank of New York Mellon Corp. in London commented on the discouraging US data saying that the country’s economy isn’t yet steady on the rebound’s path and yen is going to benefit from such outlook.
Explaining their decision to keep the key interest rate at the record minimum the Federal Reserve officials claimed that the country’s economic recovery would be slow and financial conditions worsened due to the external situation.

[COLOR="green"]China: yuan’s revaluation won’t help the US[/COLOR]
Chinese Foreign Ministry Spokesman Qin Gang claimed today that yuan’s revaluation won’t solve US economic problems such as unemployment, overconsumption and low savings rate. Chinese authorities keep being against turning this issue to the object of political tension.
Even now when China’s currency is no more tied to the greenback, US lawmakers try to make the President Barack Obama continue pressuring China. The Congressmen try to permit legislatively the tariffs on imports to let American companies compensate the advantages that weak yuan gives Chinese producers.

[COLOR="green"]Should Greece quit the euro area?[/COLOR]
Economists at Standard & Poor’s claim that it could be better for some European countries to leave the euro zone than suffer a lot of problems staying in the monetary union. According to them, there is the serious risk that other EU countries will get involved into the crisis.
The specialists at Germany’s Ifo economic institute believe that renouncing the single currency would be a better way out for Greece than the necessity to cut budget by 14% of GDP.
European Central Bank, on the other hand, regards the austerity measures as the sole opportunity for Greece to deal with the crisis.
The median forecast of 8 economists surveyed by Bloomberg showed that in 2010 Greece’s economy will decline by 3.9%, while the total euro area’s economy will expand by 1.1%.

[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]
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