[FBS_Official]

BNP Paribas, Commerzbank expect EUR/CHF to rise

Technical analysts at BNP Paribas believe that the European currency will consolidate versus Swiss franc above its 200-day MA found in the 1.3140 area.

The specialists point at the general weakness of US currency. In their view, the pair EUR/CHF will rise at least to 1.34 in the next 1-2 months.

Strategists at Commerzbank are as well bullish on euro even though the fact that it didn’t manage to close above February maximum at 1.3205 may lead to some near-term profit taking. The bank advises to buy euro in case it dips to 1.3000 and 1.2965.

[FBS_Official]

Analysts expect weak US dollar

The most accurate currency strategists believe that US dollar won’t be able to recover from 16-month minimum versus the European currency as the Federal Reserve is unlikely to lift up the interest rates after its $600 billion asset-purchase program expires in June.

Analysts at Wells Fargo and St. George Bank expect that the greenback’s rate won’t change much until the end of June as the Fed falls behind other major central banks in monetary tightening. Then dollar may begin gradually regaining its positions versus euro and yen.

Specialists at Schneider Foreign Exchange, Societe Generale and Bank of Nova Scotia think that US currency will continue weakening after the worst start of the year since 2008.

Strategists think that US dollar won’t repeat the advance it made after the end of the first round of quantitative easing in March 2010 when the Dollar Index added 10% during the 2 months.

Here are the forecasts for the pair EUR/USD:

Bank of Nova Scotia in Toronto: $1.45 (year-end)

Schneider: $1.42 (year-end)

Wells Fargo: $1.40 (end of June), $1.34 (year-end)

St. George: $1.38 (year-end)

Societe Generale: $1.50 (year-end)

Bloomberg survey: $1.36

[FBS_Official]

Sentance keeps calling for BoE rate hike

The member of the Bank of England’s Monetary Policy Committee Andrew Sentance signaled that last week he for the third time voted for the half-point interest-rate increase. However, hawkish Sentence remained in the minority as on April 7 the central bank left the benchmark interest rate unchanged at 0.5%.

According to Sentance, UK central bank has to avoid losing control of consumer prices. The VAT increase conducted at the beginning of the year will hold the prices only temporarily, thinks the specialist.

British Office for National Statistics will release March CPI data tomorrow. It’s widely thought that the annual inflation stayed at the highest level in almost 2 1/2 years of 4.4%.

The policymaker said that the market expects that the next year the BoE borrowing costs will reach 2%.

Last week the pair GBP/USD climbed to the maximal level since January 2010 at 1.6427. Sentance says that the rate hike won’t make pound surge to maximums seen 3-4 years ago – on the contrary, gradual appreciation of sterling will help to reduce the imported inflation that comes from rising oil and commodity prices.

[FBS_Official]

Barclays Capital: bearish outlook for USD/CHF

Technical analysts at Barclays Capital note that the greenback keeps trading within the medium-term downtrend against Swiss franc.

The specialists expect that the pair USD/CHF will drop to 0.8980 in the near term. If US currency doesn’t manage to hold above this level, it will be poised to fall to 0.8760.

According to the bank, the bearish pressure will decrease only if the greenback closes above 0.9205.

[FBS_Official]

JPMorgan: EUR/USD may correct downwards

Billionaire investor George Soros thinks that the ECB’s move to lift up the key interest rate last week to 1.25% was “quite inappropriate” as the one-size-fits-all monetary policy of the ECB and strengthening currency affect the peripheral euro zone nations.

Strategists at Bankhaus Metzler claim that the period of euro’s strength will soon be over. In their view, the pair EUR/USD has a chance to reach resistance at $1.4580 in the near-term and then correct downwards to the $1.38/35 during the next 3 months.

Analysts at JPMorgan say that if euro doesn’t manage to get above $1.45 it will decline in the short-term. The specialists advised to buy the European currency on dips.

[FBS_Official]

BMO Capital advised to sell New Zealand’s dollar

New Zealand’s dollar was rising versus the greenback during 3 weeks reaching yesterday the 0.7846 level. The strategists at BMO Capital think, however, that kiwi’s advance has come to an end.

Among the factors negative for the NZD there are the discouraging consequences of the earthquake, interest rates that were lowered in early March and rather modest fundamentals of the country. So, if stock markets tumble, investors lose risk appetite and the US currency begins rising, it will be gaining at fastest pace versus New Zealand’s dollar, say the specialists.

According to BMO, it’s necessary to sell kiwi at the current levels placing stops above 0.7905 and taking profits at 0.7630.

[FBS_Official]

BNP Paribas: Aussie may keep growing

Australia’s dollar fell the most in 4 weeks against yen and eased from its maximum versus the greenback after Japan raised the severity rating of Fukushima Dai-Ichi power plant, damping demand for higher-yielding assets. According to Tokyo Electric Power Co., the total amount of radiation leaks from the affected power plant may exceed that of the 1986 Chernobyl disaster.

Despite the deteriorated risk sentiment analysts at BNP Paribas claim that the overall outlook for the pair AUD/USD remains positive and Australian currency still has all chances to resume its way up.

The specialists base such assumptions on strong China’s trade data that means the steady demand for Australia’s goods.

In addition the bank draws investors’ attention to the dovish comments of some Federal Reserve members Yellen, Dudley and Evans hinting that the US central bank won’t hurry to raise the rates after the $600-bilion bond purchase program ends in June.

Finally, BNP Paribas thinks that during the meetings of G20 and the IMF the nations will fail to find the solution of the world’s economic imbalances, so the currency reserves diversification is likely to continue encouraging the demand for Aussie.

[FBS_Official]

Stiglitz: new global reserve currency needed

Nobel-prize laureate Joseph Stiglitz believes that in order to prevent trade imbalances that are well reflected in the US national debt, the greenback should be replaced by the new global reserve currency.

Last week US dollar fell to the 15-month minimum versus euro at $1.4480, while the US trade deficit widened in January to the 7-month maximum of $46.3 billion.

The famous economist says that the position of the United States could be much worse if the situation in Europe wasn’t so severe.

Stiglitz notes that the existing monetary system creates high risk that the period of low growth, inflationary bias and instability will last long. Such system is fundamentally unfair, says the specialist, as it means that poor countries are lending to the US at close to zero interest rates. To finance its budget deficits, the USA sells bonds to overseas investors and governments, boosting the dollar reserves of those nations. According to International Monetary Fund, overseas holdings of dollar reserves rose to $3.14 trillion in the fourth quarter of last year.