[COLOR="Green"]Citigroup: EUR/USD may fall to $1.22[/COLOR]
Technical analysts at Citigroup Inc. believe that if the single currency breaks down through support level at 1.2588 last touched on August 24 it may lose 4% versus the greenback falling to hit last time on July 1.
The specialists claim that euro’s rate is affected by rising concerns about financial condition of European banks and growing sovereign spreads. Resistance for the pair EUR/USD is situated, according to them, at $1.2923.
[COLOR="green"]Barclays Capital: Japan has to intervene urgently [/COLOR]
Analysts at Barclays Capital believe that Japanese monetary authorities have to intervene to the currency market in the “immediate future” as excessive yen’s strengthening threatens the country’s economic recovery founded on exports’ advance.
The specialists warn that if Japan’s currency driven by global risk aversion keeps trading at current levels, production, as well as investment and hiring activity will escape abroad. In February exporters informed the government that they can’t make a profit if the national currency’s rate is higher than 92.90.
All in all, Japan will have to count on its own strength conducting intervention as the United States and Europe won’t raise their domestic currencies in the current economic situation and unilateral intervention will be more effective if it is unsterilized in which the central bank refrains from absorbing extra funding in the market.
Barclays strategists also note that it would be easier for Japan to weaken yen if China allowed its currency to gain more as yen tended to move in the opposite direction to the yuan during the global financial crisis started in September 2008.
[COLOR="green"]CIBC markets: euro will fall to $1.19 in the first quarter of 2011[/COLOR]
Analysts at CIBC markets claim that the single currency will keep falling getting down from 1.3335 at the beginning of August to 1.1900 in the first quarter of 2011. Then, according to the specialists, euro’s rate will reverse and rise to 1.3000 by the end of next year.
[COLOR="green"]BNP Paribas: Aussie rose to 4-month maximum[/COLOR]
Australian rose to 4-month maximum versus the greenback stimulated by strong jobs data. The currency managed to overcome resistance at $0.92 climbing to $0.9237.
The number of employed people increased in August by 30,900, while the economists surveyed by Bloomberg News were looking forward to 25,000 gain. The jobless rate decreased from 5.3% in July to 5.1% last month.
Analysts at BNP Paribas note that the direction of monetary policy in the United States and countries like Australia and Canada is completely the opposite. In their view, demand for Aussie and loonie will be higher.
The rise in the Aussie did not give its usual fillip to the U.S. dollar against the yen, via trade in the crosses, reinforcing bearish views on dollar/yen.
[COLOR="green"]Morgan Stanley: EUR/JPY will reverse [/COLOR]
Strategists at Morgan Stanley in London believe that the pair EUR/JPY will reverse and euro will start rising versus Japanese yen. In their view, the concerns of euro zone’s sovereign debt will be erased as weak euro stimulates German export.
The specialists advise to buy the single currency looking forward to its advance to 115 yen with stop-loss at 104.50.
[COLOR="green"]Mizuho recommends selling USD/JPY[/COLOR]
Technical analysts at Mizuho Corporate Bank claim that the pair USD/JPY continues trading inside the narrow channel noting that investors still didn’t get used to see the rate below 85.00 level.
According to Mizuho strategists, all elements of the chart indicate steady bearish momentum and US currency still isn’t oversold versus its Japanese counterpart.
The specialists expect that the greenback may fall to 81.95/81.50 and advise to sell dollars at 83.65/84.00 stopping above 84.95.
[COLOR="green"]Commerzbank: pound’s advance was a correction[/COLOR]
Technical analysts at Commerzbank believe that pound’s advance from 1.5300 versus the greenback didn’t change the general downtrend in GBP/USD but was simply a correction.
According to the specialists, sterling will be declining towards 1.5145 and 1.4905 levels representing 50% and 61.8% retracement of the advance from May to August.
If the British currency rises, resistance levels will be found at 1.5570 and 1.5650/1.5714 (50% retracement of the recent decline and maximums). Below these levels the outlook for the pair will remain bearish.
[COLOR="green"]RBC: euro will fall to $1.10 by the middle of 2011[/COLOR]
Strategists at Royal Bank of Canada in London believe that the single currency may drop to $1.10 by the end of the second quarter of 2011.
Such forecast is based on the negative effects that austerity measures will make on the euro zone’s economy that will appear first half of the next year.
The specialists note that governments of periphery European nations aren’t determined to make in their autumn budgets provisions for the 2011 downside risks.
[COLOR="green"]PBOC reminds about euro zone's problems[/COLOR]
Officials at the People's Bank of China (PBOC) claim that although the recovery of euro zone’s economy has turned out to be better than expected continuous debt problems will affect the region’s economic growth.
Chinese monetary authorities note that austerity measures won’t solve fundamental debt issues and underline that sovereign debt risk in Greece and Spain is still high.
As for the global economic outlook, Chinese central bank thinks that the growth pace in the major economies is generally good, while the one in the emerging markets is notably strong.
In addition, PBOC representatives confirmed that the government will continue to reform yuan’s exchange rate mechanism in order to make it flexible.
[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]
