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Old 20-01-2011, 07:43
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Default 19/01/11

[COLOR="Green"]Saxo bank: analysis euro of dynamics[/COLOR]
Analysts at Saxo bank note that even though the European policymakers didn’t decide on any increase in the European crisis fund, discussions to give the rescue fund more flexibility were enough support the single currency and make it gain a little more.
Yesterday stronger European data had given euro an early boost, letting the single currency return above 1.34 versus the greenback and reach the levels just above last Friday’s maximum. Loose chatter that Portugal may skip next week’s auction due to the fact they currently have enough cash helped the final push higher, while Russia intimating that they may also support the EFSF lent further support.
However, not everything went so well, with the Dutch finance minister rejecting the idea of expanding the emergency fund while the European Central Bank claimed it expects more banks to fail stress tests this year than in 2010. In addition, pound was more attractive for investors as UK inflation remained persistently high (CPI rose 1.0% m/m and 3.7% y/y), well above the BOE’s target level and fueled talk of imminent rate hikes.
As for today’s data, in Europe the market’s attention will concentrate on euro zone’s current account and construction output along with Britain’s unemployment. For the US session, focus switches to Canada’s manufacturing sales and the BOC’s monetary policy report while the US sees building permits and housing starts.


[COLOR="green"]Westpac: RBA won’t raise rates until the second half of the year[/COLOR]

Australian consumer confidence fell in January to a 7-month minimum of 104.6 from 111 in December due to the concerns that flood damage will weaken the nation’s economy.
According to the estimates of Australia & New Zealand Banking Group Ltd. economists, the reconstruction of affected region may cost A$20 billion ($19.9 billion) or about 1.5% of GDP.
Reserve Bank of Australia left the overnight cash rate target at 4.75% last month, after 7 increases since October 2009 naming its policy “mildly restrictive.”
Analysts at Westpac claim that even before the advent of the floods they didn’t expect another rate increase until the second quarter of 2011. Now the next rate increase may be put off to the second half of the year. The specialists are sure that the rates will remain unchanged on the February 1 meeting.


[COLOR="green"]Credit Agricole: euro will fall to $1.3100 in 6 months[/COLOR]
Analysts at Credit Agricole expect that the European currency will remain under pressure during the major part of 2011. In their view, any rebound of the pair EUR/USD won’t last long.
The specialists claim that the absence of resolution to peripheral debt concerns will remain the main negative factor for euro in the coming months.
According to Credit Agricole, the actions of the European policymakers aren’t likely to become more convincing and uncertainty won’t leave the markets, while the growth differential in the euro region’s going to further widen.
The strategists forecast that in 3 months the pair EUR/USD will trade at 1.3700 and in 6 months it may fall to 1.3100.


[COLOR="green"]Commerzbank: 1.3500 – resistance for EUR/USD[/COLOR]
The single currency that began rising last week continued strengthening this week approaching resistance area at 1.3500.
Technical analysts at Commerzbank believe that the bears will remain stronger until euro’s rate is below this level with the possibility if decline to the 1.2795 level representing 61.8% retracement of the move seen in the second half of 2010.
If EUR/USD manages to overcome 1.3500, it will be able to climb to 1.3739/86 and then 1.3978/1.4000.


[COLOR="green"]Bank of Canada left the rate at 1%[/COLOR]
Canadian dollar dropped versus the greenback from yesterday’s maximum at 0.9836, the highest level since May 2008, as the Bank of Canada decided yesterday to keep its benchmark interest rate unchanged at 1%.
Economists at National Bank of Canada note that Canada’s central bank was more negative about the possible challenges to the country’s economic growth than expected and has made it clear that rates won’t be raised in the coming months.
Specialists at TD Securities believe that the Bank will have time to assess the impact that the crosscurrent of global forces has on the Canadian economy because of spare capacity and core inflation well below 2%. In their view, the Bank of Canada is under no pressure of emergency to follow the path of monetary tightening. The analysts don’t expect the rate hike until July.
Strategists at HSBC say that Canadian central bank looks satisfied with its policy framework and won’t move forward that will, of course, weight on loonie.


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