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Societe Generale: technical levels for USD/JPY 2011-12-07 16:41 Technical analysts at Societe Generale claim that support for USD/JPY is found at 77.60/55 and 77.30, while resistance for the greenback lies at 78.30/40 and 78.70. Chart. Daily USD/JPY Societe Generale: technical levels for USD/JPY BNY Mellon: sentiment about euro again changed 2011-12-07 17:32 The single currency weakened versus the greenback after starting the day on the upside. Analysts at Bank of New York Mellon note that the positive sentiment which has so far began to build switched to the gloomy stance on the euro area's future. Euro declined after German government official told reporters on condition of anonymity that the nation rejects proposals to combine current and permanent euro-zone bailout funds – yesterday the Financial Times reported that the European leaders may agree to do this. In addition, Berlin is pessimistic about the chances to reach a deal on solving the crisis on the December 9 summit. If the summit disappoints the market, EUR/USD may slide to $1.3210 and $1.3145. The majority of the economists surveyed by Bloomberg News expect the European Central Bank to cut its benchmark rate tomorrow from by 25 basis points to 1%. If it happens, euro will get under pressure. Chart. Daily EUR/USD BNY Mellon: sentiment about euro again changed BOTMUFJ on the approaching SNB meeting 2011-12-07 18:41 Analysts at Bank of Tokyo-Mitsubishi UFJ note that investors seem nervous ahead of the Swiss National Bank meeting on December 15. EUR/CHF rose today to 1-month maximum at 1.2440 on the talk that the central bank may lift up the minimal level for the pair from the current 1.20 level. Such speculation was caused by the fact that the nation’s CPI contracted by 0.2% in November, while the economic growth in the third quarter hit the minimal level in more than 2 years. Switzerland’s Finance Minister Eveline Widmer-Schlumpf claimed today that the committee charged with searching for the ways to stem franc’s appreciation examined such issues as negative interest rates and capital controls. At the same time, the majority of the analysts don’t think that the SNB will move the floor for euro. Strategists at Bank Sarasin claim that the policymakers will base their judgments not on the figures for 12 month, but on the medium-term outlook for Swiss inflation. Economists at Zuercher Kantonalbank say that Swiss services prices are rising and there will be higher medical aid contributions next year, so this will support the prices. Chart. Daily EUR/CHF BOTMUFJ on the approaching SNB meeting

Commerzbank: comments on EUR/USD 2011-12-07 13:32 The single currency rose versus the greenback from yesterday’s minimum at $1.3333 to the levels in $1.3440 area. Technical analysts at Commerzbank believe that euro’s advance is only a correction. In their view, EUR/USD won’t be able to rise above $1.3608/15 (38.2% Fibonacci retracement of last decline and November 18 maximum). The specialists underlined, however, that it’s not possible to rule out the possibility of the pair’s rebound to $1.3835/60 (July minimum, November maximum and the 61.8% Fibonacci retracement of the recent move down). According to the bank, EUR/USD is poised down to test the 2011 uptrend support at $1.3210 where it will manage to find some support. Chart. Daily EUR/USD http://www.fbs.com/analytics/news_markets/view/11354 EUR/USD: comments on sentiment, ECB and EU summit 2011-12-07 14:30 Currency strategists at Morgan Stanley believe that the European currency may gain more versus its American counterpart as the market has become more optimistic ahead of the EU summit on Friday. In their view, if EUR/USD managed to rise above $1.3490, it will be able to strengthen more in the near term. Specialists at Citigroup, however, advise traders to be careful. The bank underlines that it would be very difficult for the pair to hold its advance after the EU summit is over. The analysts warn that one cannot rule out the risk that the market will get disappointed by the European authorities and euro will get under pressure. Analysts at Barclays Capital think that the single currency may rise to $1.3550, but not higher. According to the bank, there’s still risk of euro’s slide to $1.3210/1.3145 (November and October minimums). By the way, BNP Paribas points out that the market has priced in only 80% of the 25-basis-point rate cut on Thursday, so it the ECB actually lowers borrowing costs euro will take a blow. The median forecast of economists surveyed by Bloomberg News is that the central bank will reduce rates from 1.25% to 1% on December 8. Excluding that scenario and the risk of the EU summit failure additional short-covering may give EUR/USD some lift ahead of the weekend, says BNP Paribas. Chart. Daily EUR/USD EUR/USD: comments on sentiment, ECB and EU summit Commerzbank: comments on USD/CAD 2011-12-07 16:29 Analysts at Commerzbank underline that so far the greenback hasn’t managed to overcome 50% Fibonacci retracement of its advance versus Canadian dollar from October to November in the 1.0200 area. The specialists point out that if USD/CAD slides below the 5-month uptrend support line at 1.0100, it will dive to 1.0027 (78.6% Fibonacci retracement) and 1.0000 (psychological level) before bouncing up. According to the bank, resistance for the pair is situated at 1.0495 (resistance line) and 1.0523 (November maximum). In the first quarter of 2012 US dollar may reach 1.0590 (200-week MA) and 1.0656 (October maximum). Chart. Daily USD/CAD Commerzbank: comments on USD/CAD

Merkel and Sarkozy step in with new proposals 2011-12-06 16:40 German Chancellor Angela Merkel and French President Nicolas Sarkozy who lead the 2 biggest economies of the euro area claimed yesterday that they will try to establish new rules to tighten euro area economic cooperation. Merkel and Sarkozy agreed that there should be automatic penalties for those nations who violate the allowed limited of budget deficit, while the limits on debt are to be fixed in euro states’ constitutions. Such demonstration of intention to solve the crisis came after Standard & Poor’s warned of possible downgrades of the euro zone’s economies, even the 6 AAA-rated countries. Germany and France also aim to try to precipitate the creation of the permanent European rescue fund from 2013 to 2012 and ensure that decisions by the fund can be made by a “qualified majority” rather than a unanimous vote by the participating governments. According to Sarkozy, the leading euro area’s nations plan to reach consensus on treaty change with other euro leaders by March. At the same time, it’s necessary Merkel and Sarkozy reiterated their rejection of the idea of the joint euro bonds. As a result, analysts at Bank of Tokyo Mitsubishi UFJ say that the main pressure in saving the currency will lie on the ECB. According to the bank, the plans announced by Merkel and Sarkozy on Monday may satisfy the European Central Bank and could prevent S&P from massive ratings’ cut of the euro-zone countries. Chart. Daily EUR/USD Merkel and Sarkozy step in with new proposals Barclays Capital: comments on USD/JPY 2011-12-06 17:13 Technical analysts at Barclays Capital note that the greenback is testing support at 77.65 trading versus the greenback. The specialists note that if the pair USD/JPY broke below this level, it will go down back to 77.30 yen. In their view, in December US dollar will stay between 77.10 and 78.30 yen. Chart. Daily USD/JPY Barclays Capital: comments on USD/JPY Nomura: 2012 forecast for EUR/USD 2011-12-06 17:31 Analysts at Nomura expect the single currency to fall versus its US counterpart to $1.20 by the end of the first quarter of the next year. Then the specialists see EUR/USD recover to $1.25 by the end of 2012. Such forecast is based on the assumption that the European Central Bank will have to conduct quantitative easing in order to prevent Greek default. Daily USD/JPY Nomura: 2012 forecast for EUR/USD

RBA once again cut interest rates 2011-12-06 13:34 The Reserve Bank of Australian reduced today the key interest rate by 25 basis points to 4.25%. Australia’s monetary authorities claimed that such decisions were made due to the risks coming from the European debt crisis. In particular, the country’s exports and, consequently, its economy and the global economy in general will likely suffer from the declining demand in the euro area. Economic growth of China, Australian biggest trading partner, is also slowing down. Analysts at RBC Capital Markets believe that the RBA will lower the borrowing costs once more in the first quarter of 2012. Specialists at St. George expect the central bank to cut rates in February, especially if there is no fundamental solution in Europe. Strategists at Westpac think the cuts will be conducted in February and May of the next year. The RBA decreased rates for the second consecutive month: in November it lowered borrowing costs from 4.57% to 4.50%. Australian dollar declined versus its US counterpart from the recent maximums in the $1.0330 area to the levels in the $1.0200 zone. Chart. Daily AUD/USD RBA once again cut interest rates BMO recommends longs on NZD/CAD 2011-12-06 14:30 There are many central banks’ meetings this week, including the Bank of Canada later today and the Reserve Bank of New Zealand on Thursday. Analysts at BMO Capital compared Canada’s and New Zealand’s economic data and came to conclusion that the latter is better than the former. The specialists think that the RBNZ is likely to lift up the borrowing costs, while the BOC is seen staying on hold. As a result, BMO believes that New Zealand’s dollar will gain versus its Canadian counterpart. The bank suggests buying NZD/CAD in the 0.7875 zone stopping below 0.7735 and targeting 0.8275. Chart. Daily NZD/CAD BMO recommends longs on NZD/CAD Barclays Capital: trading recommendations 2011-12-06 15:25 Currency strategists at Barclays Capital are slowly truing more positive on the prospects for the single currency as the region’s gradually moving to a sort of progress. The European Central Bank meets on Thursday and the EU leaders gather on Friday. The specialists think that these meetings will be an important step forward and can help to lower the risk premium on euro. Barclays notes that as the majority of market players are currently bearish on the single currency, their sentiment may sharply change. At the same time, the analysts advise traders to avoid euro as EUR/USD’s moves may be extremely volatile and unpredictable. In their view, the ECB’s meeting is unlikely to improve risk sentiment while posing risks to the euro zone’s interest rate advantage. If the European policymakers don’t deliver some relief, euro will get under pressure. As a result, Barclays recommends buying USD/CHF in the 0.92 area stopping below 0.90 and targeting 0.98. Chart. Daily USD/CHF Barclays Capital: trading recommendations

Ichimoku. Weekly forecast. GBP/USD 2011-12-05 14:30 Weekly GBP/USD Last week British currency has managed to make rather strong move up and even test the levels above the Turning line (1). The bulls won as the market’s risk sentiment improved after the world’s major central banks decided to lower rates on dollar swaps. The prices didn’t manage to close above Tenkan-sen (1) and this week they also opened outside of Kumo. However, if sterling manages to overcome the lower border of the Ichimoku Cloud – the line Senkou Span B – and enter it, the prices will likely correct to the resistance line of the downtrend following the line Tenkan-sen which has went up. In addition, the bearish Cloud is narrowing (3), so the bears began losing strength. In addition, pound will face rather strong resistance in the area of the Turning line (1). Chart. Weekly GBP/USD Daily GBP/USD On the daily GBP/USD chart the prices will manage to get above the Turning line (1), which is supporting the pound. At the same time, the pair is still below the Cloud which has recently switched to the bearish mode (3). Tenkan-sen (1) and Kijun-sen (2) keep holding the “dead cross” moving horizontally that allows to expect consolidation within this channel in the short-term. Taking into account the thin Kumo the bulls have chance to try and change the situation to their benefit. Chart. Daily GBP/USD Ichimoku. Weekly forecast. GBP/USD Ichimoku. Weekly forecast. USD/JPY 2011-12-05 14:32 Weekly USD/JPY Last week US currency managed to hold above the Turning line (1) which is currently playing the role of support. Resistance for the prices is provided by the Standard line (2) and the descending Ichimoku Cloud (3). The lines Tenkan-sen (1) and Kijun-sen are directed horizontally that points at the sideways trend. The prospects of the pair will get significantly better if US currency manages to overcome Kijun-sen (2). Chart. Weekly USD/JPY Daily USD/JPY On the daily chart the prices manages to hold last week above the Standard line which is painted blue on the chart. The positive factor is the “golden cross” (1) formed by Tenkan-sen and Kijun-sen above Kumo. These lines will provide support to US currency. At the same time, the Ichimoku Cloud (2) remains very thin. This means that the market is in the state of uncertainty as neither bulls, nor bears have enough strength to change the situation in their favor. Chart. Daily USD/JPY Ichimoku. Weekly forecast. USD/JPY Ichimoku. Weekly forecast. USD/CHF 2011-12-05 14:34 Weekly USD/CHF Last week US dollar declined versus Swiss franc after the month of continuous growth. Dollar’s slide may be explained by the general weakness of US currency amid the improved investors’ risk sentiment. Never the less, the prices remain inside the Cloud. The pair is supported by the Turning line (1) and Senkou Span A (3). The Ichimoku Cloud which has so far switched to the upside has widened. Tenkan-sen (1) and Kijun-sen (2) hold though weak, but the “golden cross”. The fact that they are directed horizontally means that the rate may consolidate. Chart. Weekly USD/CHF Daily USD/CHF On the daily chart the pair USD/CHF is consolidating around Tenkan-sen (1). This move is likely to continue for some time. All in all, from the technical point of view, the greenback has all chances to resume growth in the near term: the Turning line (1) and the Standard line (2) last month formed the “golden cross” (3) – very strong bullish signal as the lines intersected above Kumo. In addition, the lagging Chinkou Span broke through the price chart, while the priced were above the Cloud, and the Ichimoku Cloud itself, though narrowed, but is still bullish. For the greenback could start the rising, the bulls have to overcome resistance in the area of October and November maximums. Chart. Daily USD/CHF Ichimoku. Weekly forecast. USD/CHF

BarCap: China’s economic forecast 2011-12-01 17:26 Analysts at Barclays Capital believe that China’s economic growth pace will decline from 9.1% in the third quarter to 8.3% in the final 3 months of the year and then slide below 8% in the first quarter of 2012. The specialists underline that Chinese November Manufacturing PMI data was lower than expected and accounted for 49.0 versus consensus forecast of 49.8. In their view, that means that Chinese economy is suffering from the deteriorating demand for its exports. The bank warns that the risks to Chinese economy come from the possible global recession and from the dangerous situation at Chinese property market. This week the People’s Bank of China has unexpectedly reduced reserve requirement rate by 50 basis points. According to Barclays, the central bank will continue easing its monetary policy in case of the GDP growth slowdown and cut RRR 3 more times by the middle of the next year. The analysts say that the chances of interest rate cuts in 2012 are also high. BarCap: China BarCap, BNP Paribas on central banks' action 2011-12-01 18:08 Yesterday the Federal Reserve, the Bank of England, the Bank of Canada, the Bank of Japan, the European Central Bank and the Swiss National Bank agreed to lower interest rates on dollar liquidity swap lines from 100 to 50 basis points from December 5. In other words, it’s now cheaper for the central banks to borrow dollars from the Fed. Such step was aimed to facilitate access of the euro area to the dollar liquidity. Analysts at Barclays Capital, however, believe that though the risk sentiment on Wednesday has significantly improved, it’s now too early to say that the situation has changed. The specialists note that the stock indexes remain range bound and longer term charts still point to weakness. Strategists at BNP Paribas say that the central banks' joint action treats the symptoms but not the cause of the problems. In their view, the market’s attention will remain focused on the situation in the euro area and investors will keep hoping that the region’s economies will move towards fiscal integration. Daily EUR/USD BarCap, BNP Paribas on central banks' action Goldman Sachs: 2012 stock markets’ forecast 2011-12-01 18:10 Economists at Goldman Sachs project that the stock markets will keep falling in the first quarter of 2012 due to the threat of recession in the developed economies, but later start advancing around the middle of the next year. In their view, the major indices will end 2012 10% above current levels. Goldman says that it’s hard to say exactly when the rebound is going to start as that will depend on the actions of the policymakers. The specialists expect euro zone’s GDP to decline by 0.8% the next year. In their view, Germany and France will survive sharp but short-lived recession, while the peripheral economies of the region will suffer much more. However, despite the economic contraction some kind of resolution to the euro zone debt crisis will lead to a rally for stocks and a narrowing of bond spreads. According to Goldman Sachs, currency bloc’s collapse is unlikely, but in case it happens, the consequences for the member states and the global financial markets will be terrible. Chart. Daily EUR/USD Goldman Sachs: 2012 stock markets

RBC: trading recommendations for EUR/USD 2011-12-01 12:24 Analysts at RBC Capital Markets think that volatility will likely to remain elevated by the end of this trading week as the market awaits the release of ISM Manufacturing PMI and French and Spanish bond auctions later today and US non-farm payrolls figures tomorrow. The specialists note that the single currency has so far recovered this week. In their view, it will be able to continue going up. On the one hand, the short positions on EUR/USD has increased to the level at which traders are no more willing to sell euro. On the other hand, the European currency will remain under pressure of the concerns about indebted peripheral states. The bank points out that the pair has been trading between $1.32 and $1.50 and advised to open shorts at the top of the range expecting euro to fall to $1.3200 and $1.3140. Chart. Daily EUR/USD RBC: trading recommendations for EUR/USD Commerzbank: comments on USD/CHF 2011-12-01 13:14 Technical analysts at Commerzbank note that the greenback didn’t manage yesterday to overcome 0.9240/50 versus Swiss franc and had to return to the lower levels due to dollar’s broad weakening provoked by the central banks’ action. The specialists claim that USD/CHF went down getting below the 3-month upward trending support line at 0.9173. In their view, that means that US currency is poised down for further correction to 0.8950 (50% Fibonacci retracement) and 0.8730/8684 (200-day MA). According to the bank, support is situated in the 0.8555/50 area, while resistance lies in the 0.9341/99 zone (April maximum and 50% Fibonacci retracement of the decline in 2010-2011). Chart. Daily USD/CHF Commerzbank: comments on USD/CHF WSJ on the outlook for the British currency 2011-12-01 14:53 Analysts at Wall Street Journal note that the demand for the British government bonds is rising amid the euro zone’s debt crisis. The specialists underline that sterling is now seen as an alternative to the single currency that gives pound safe haven status. The pair EUR/GBP lost 2.1% since the beginning of September. WSJ draws attention to the fact that yesterday when the move of the major central banks made the riskier currencies rally, pound weakened against euro as the other refuge currencies. The economists claim that sterling has become more attractive since the SNB pegged franc to euro. At the same time, though pound strengthened versus euro, it only returned to the levels where it began this year, while against US dollar sterling is above the levels of the beginning of 2011 only by 0.6%. UK economic problems are strongly affecting the national currency. Pound is under pressure as the Bank of England’s conducting QE. The economic outlook for Britain is dim, as the country is affected by the weak growth in Europe. Moreover, UK has to conduct its own austerity measure that will also reduce its GDP growth rate. Analysts at Barclays Capital are bearish on GBP/USD in the short-term saying though that pound’s slide will be limited. Some experts say that the negative factors are already priced in pound’s rate, so the pair may strengthen to $1.60. According to the calculations of Societe Generale pound is undervalued by 11%, while the European currency is overvalued by 0.5%. Chart. Daily EUR/GBP Chart. Daily GBP/USD WSJ on the outlook for the British currency French and Spanish bond auctions considered successful 2011-12-01 16:35 France has managed to sell today 1.57 billion euro of 10-year bonds. The average yield was equal to 3.18%, lower than at its last auction on November 3 (3.22%). Spain sold 3.75 billion euro of bonds meeting the maximum target. The average yield on 5-year debt, however, was 5.544%, higher that the last time on November 3 (4.848%). Analysts at Bank of Tokyo-Mitsubishi UFJ note that the demand for the nations’ debt was high enough adding that the market’s sentiment is still positive after the major central banks acted yesterday to facilitate access to dollar liquidity to the euro area. EUR/USD is trading in the $1.3400 area, up from the opening level at $1.3445. Chart. Daily EUR/USD French and Spanish bond auctions considered successful

RBS advised selling EUR/CAD 2011-11-30 15:50 Analysts at Royal Bank of Scotland advise investors to sell the single currency versus Canadian dollar. The specialists expect EUR/CAD to drop to this year’s minimum in the 1.2800 area. In their view, the market is very pessimistic about euro’s prospects. The bank says that the region is under threat of recession and easing of ECB monetary policy. According to RBS, such trade will allow traders to benefit from improving environment in US and Canada and from deterioration of the euro zone’s conditions. The European currency is strongly correlated with the S&P 500 index. The strategists think that Canadian dollar is correlated with equities too, but the cross rate of the two currencies is not, so the volatility connected with the changes in investors’ risk sentiment is excluded. Chart. Daily USD/CAD RBS advised selling EUR/CAD BOTMUFJ: US dollar may rise versus Japanese yen 2011-11-30 16:23 Analysts at Bank of Tokyo-Mitsubishi think that the greenback may reverse upwards versus Japanese yen and advance to the 4-month maximum in the 81 yen zone by the end of 2011 or in the beginning of January 2012. The specialists note that the Turning line (Conversion line) on the daily Ichimoku chart tends to cross the Standard line (Baseline) bottom-up, while the prices are above the Cloud – the bullish signal. The bank underlines that 5-day MA on USD/JPY is rising above the 21-day one, while 65-day MA is getting above the 90-day line. According to Bank of Tokyo-Mitsubishi, if US currency manages to hold above 78 yen, it will be eventually able to start climbing. Chart. Daily USD/JPY BOTMUFJ: US dollar may rise versus Japanese yen Scotia Capital: comments on AUD/USD 2011-11-30 18:10 The single currency keeps performing rather well versus its US counterpart taking into account the fact that the market is worried about the possibility of the euro area’s breakup. Analysts at Scotia Capital note that as the European authorities don’t deliver any fundamental changed, the prospects of the monetary union will remain very uncertain weighting on euro’s rate. The specialists advise traders to turn to Australia as there are no doubts about its triple-A credit rating. In addition, the nation is reach with commodities and is closely connected with Asian economies. The economists underline that Australian dollar suffered this month, so it has where to rise back if the risk sentiment remains positive. Scotia Capital suggests that AUD/USD may climb to $1.0400. Chart. Daily AUD/USD Scotia Capital: comments on AUD/USD

Eurogroup agreed to boost capacity of EFSF 2011-11-30 14:04 The European finance ministers agreed to extend the capacity of the European Financial Stability Facility. The officials decided to guarantee 20-30% of new bond issues from the indebted nations and to develop investment vehicles that would give the EFSF more freedom to intervene in primary and secondary bond markets. The policymakers noted that both measures may run at the same time and could be launched in the beginning of 2012. According to Luxembourg Prime Minister Jean-Claude Juncker, finance chiefs also about the possibility of increasing the International Monetary Fund’s resources through bilateral loans of the national central banks, though only as a last resort. In addition, European authorities signed off on an 8-billion-euro aid payment to Greece which was delayed until Greece’s commitment to conduct structural reforms. However, BNP Paribas points out that the market players remain rather skeptic recalling their previous disappointments. The sentiment was also affected by the news that S&P had downgraded 37 major global banks. EUR/USD remains on the downside. Resistance for the pair is found at $1.3457 (23.6% Fibonacci retracement of the decline from October maximum at $1.4248 to last week's minimum at $1.3211). Euro has lost 3.9% versus the greenback and 4.2% against yen in November. Today there’s a meeting of finance ministers of the whole European Union. The region’s prime ministers meet on December 9. Tomorrow Spain will try to sell 3.75 billion euro ($5 billion) of debt maturing in 2015, 2016 and 2017, while France will offer bonds maturing in 2017, 2021, 2026 and 2041. Chart. Daily EUR/USD Eurogroup agreed to boost capacity of EFSF UBS: comments and forecast for GBP/USD 2011-11-30 14:27 Currency strategists at UBS note that British pound is trading within downtrend versus the greenback. The specialists claim that support for the pair is situated at $1.5459. If sterling drops below this level, it will be poised down to $1.5422 (November 25 minimum). Resistance for GBP/USD lies at $1.5707. The bank expects the pair to trade at $1.5500 in a month before declining to $1.5000 in 3 months. Chart. Daily GBP/USD UBS: comments and forecast for GBP/USD Commerzbank: comments on USD/JPY 2011-11-30 14:50 Technical analysts at Commerzbank think that the outlook for USD/JPY remains positive as the greenback was successfully supported yesterday at 77.60 yen and . The specialists expect the pair to rise to the 4-year downtrend resistance line at 79.46 and then to the 55-week MA at 80.31. If US currency manages to overcome these levels, the longer term trend will reverse to the upside. According to the bank, support for US dollar lies in the 76.80/60 area (Standard line on the daily Ichimoku chart). Chart. Daily USD/JPY Commerzbank: comments on USD/JPY

Euro area, China: economic outlook deteriorated 2011-11-29 13:14 Analysts at UBS reduced China’s 2012 GDP forecast from 8.3% to 8%. The specialists expect exports growth to slow as the demand for Chinese products weakens due to the euro zone’s debt crisis. In their view, the nation’s exports will stagnate the next year, while earlier they expected 5.5% growth. The outlook for European GDP growth was earlier cut from 0.7% to 0.2%. According to the bank, the currency union has chance to avoid collapse of euro and banking crisis. However, UBS points out that the region’s economy will nevertheless be in recession in 2012. Strategists at Deutsche Bank cut projections for euro area’s economic growth from +0.4% to -0.5%. The specialists underline that as Europe’s economic prospects deteriorate, the European authorities will be more motivated to act. The OECD also lowered 2012 forecast for euro zone’s economic growth from 2.0% to 0.2%. Euro area, China: economic outlook deteriorated Fitch Ratings: negative outlook for US rating 2011-11-29 14:18 Fitch Ratings changed the outlook for US top credit rating to negative. The agency doubts that American authorities are able to act in time in order to put the nation’s public finances in order. According to Fitch, the probability of a downgrade now exceeds 50%. Last week the Congressional Supercommittee didn’t manage to reach agreement on the deficit cuts and the country now faces $1.2 trillion in automatic spending cuts. The failure of the committee will delay any major deficit- reduction agreement until after the next presidential election that will threaten US economy. “The scale of any subsequent budget cuts are probably going to have to be larger than they otherwise would have been and certainly implemented in faster manner,” said Fitch. The economists underline that US needs more the reforms of entitlements and taxation than simply discretionary cuts. The agency expects that American federal debt held by the public will get over 90% of GDP by the end of the decade, while interest on the debt will require more than 20% of the tax revenue. Fitch Ratings: negative outlook for US rating [B]EUR/USD: comments on trading day[/b] 2011-11-29 18:07 The single currency has managed today to test the levels above $1.3400. The market’s sentiment improved as Italy was able to sell 7.5 billion euro in bonds meeting its target, even though the nation’s borrowing costs keep rising: the country paid almost 8% to sell 3-year bonds (critical level) and 7.56% for 10-year bonds (record maximum), but thankfully lower than the actual average yield levels were all lower than market levels. However, the relief didn’t last long – the European currency erased its today’s advance easing down to $1.3300 as the ECB failed to attract enough deposits from banks required to offset its purchases of bonds from the indebted euro zone’s economies. The central bank attracted 194 billion euro in 7-day bank deposits versus 203 billion needed. This way it may be regarded as a form of quantitative easing as the supply of euro went up, though analysts at Credit Agricole that QE will occur in case the shortfall repeats and grows. Analysts at Deutsche Bank remain bearish on euro claiming that the situation is still very serious. Strategists at Lloyds Bank expect EUR/USD to test this week the levels below $1.3150. Chart. Daily EUR/USD EUR/USD: comments on trading day UBS: demand for Japanese debt will remain high 2011-11-29 18:43 Japanese 10-year bond yield rose yesterday 3-month maximum at 1.055% from the record minimum of 0.94% hit last week. As a result, the pair USD/JPY tested levels above 78 yen. Analysts at UBS think that the greenback will remain trading 75.00 and 80.00 yen unable to get higher as the demand for yen and Japan’s debt will remain high amid concerns about the euro area. The specialists point out that 95% of Japanese government bonds are held by domestic investors which prefer the home currency distrusting other major countries' sovereign debts. Strategists at Societe Generale see only 2 risks to Japan’s safe haven status: either household and corporations will start to save less than what the government needs to borrow or the country would have to suffer a capital flight. In their view, for now both these outcomes aren’t likely. Chart. Daily USD/JPY UBS: demand for Japanese debt will remain high

Citigroup: recommends selling EUR/CAD 2011-11-29 10:31 The single currency managed to recover versus the greenback from more than 1-month minimum at $1.3211 to the levels above $1.3300 on the speculation about the new plan which implies stronger integration of the core economies. Never the less, analysts at Citigroup are bearish on euro and recommend selling it on the rallies. In their view, such plan would be difficult to realize as it will likely meet opposition of different European nations. As a result, the hopes that the ECB will increase bond buying may be unjustified. The specialists advise investors to open shorts on EUR/CAD. In their view, the outlook for Canadian dollar as more bullish as Canada has rather credible fundamentals, is closely connected with the United States which seem to be resilient enough despite the negative effects coming from Europe, and, finally, because loonie is able to gain from advance in commodity prices. Chart. Daily EUR/CAD Citigroup: recommends selling EUR/CAD BBH: European policymakers meet this week 2011-11-29 11:09 European finance ministers meet twice this week: today at the Eurogroup meeting and tomorrow at the Ecofin one. Analysts at Brown Brothers Harriman believe that if the policymakers don’t come up with specific proposals of how to deal with the crisis, investors will resume selling euro and stocks. As for the talk that the region’s leaders may be negotiating a new pact, the specialists note that earlier there were many times when the markets were lightened with hope but got disappointed as nothing happened. According to the BBH, it’s also necessary to take into account surging bond yields in Europe and the warnings from the OECD and Moody's Investors Service that the way out of the escalation debt turmoil should be found urgently. Chart. Daily EUR/USD BBH: European policymakers meet this week Societe Generale: forecast for QE3 2011-11-29 11:27 Currency strategists at Societe Generale believe that the Federal Reserve will decide to conduct the third round of quantitative easing by March 2012. As the reasons for such forecast the specialists cite the projected US weak economic growth in the first quarter of the next year and the slowing inflation in the country. The specialists claim the Fed will buy mainly mortgage-backed securities and QE will be worth about $600 billion over 6-8 months. As a result, the central bank’s securities portfolio will increase by the end of 2012 from $2.65 to $3.25 trillion. Societe Generale: forecast for QE3 Commerzbank: comments on EUR/USD 2011-11-29 11:48 The single currency managed to recover versus the greenback from more than 1-month minimum at $1.3211 to the levels above $1.3300. Technical analysts at Commerzbank claim that EUR/USD is facing strong resistance at $1.3418 (resistance line) and $1.3457 (23.6% Fibonacci retracement of the recent decline). In their view, the pair won’t be able to get above $1.3615 (November 18 maximum) in the near future remaining in the $1.3457/3615 area. According to the bank, if euro breaks below $1.3145 (October 4 minimum), it will be poised down to $1.2860 (2011 minimum). On the downside the longer term target lies at $1.20. Chart. Daily EUR/USD Commerzbank: comments on EUR/USD

UBS, Deutsche Bank, Nomura on potential collapse of euro 2011-11-28 16:27 Many experts from the major banks and ratings agencies agree that the euro area may break up unless the region’s policymakers find solution to the euro zone’s debt crisis. Analysts at UBS underline that the currency market’s beginning to price in the collapse of the currency union. Strategists at Deutsche Bank and Nomura agree that the European debt turmoil has entered a very dangerous phase as investors started worrying about the euro zone’s core economies such as Germany. Agency Moody’s Investors Service said today the “rapid escalation” of the crisis threatens all of the region’s sovereign ratings and that the risks will keep rising if no steps are taken to stabilize the situation. Last week was full of negative events: Germen government failed to draw bids for 35% of 10-year bunds, while Spain decided not to sell 3-year bonds and Italian 2-year yields surged above the 10-year ones. In addition, Standard & Poor’s cut Belgium’s credit rating and Fitch Ratings lowered Portugal’s one to the junk grade. The IMF rejected the talks provoked by La Stampa that it’s preparing to lend Italy 600 billion euro. Among the coming political news there are Ecofin meetings on Tuesday and Wednesday and EU leaders’ summit on December 9. I(t seems that the measures previously rejected by the region’s authorities such as the increase of the ECB bond buying and governments issuing common securities in a deeper fiscal union are now the only possible steps to save the monetary union. Strategists at Morgan Stanley note that it’s possible that the European policymakers won’t be able to present credible solution at the summit. Analysts at UBS note that the surging bind yields will hit Germen and other euro zone’s banks which may require additional capital. According to Bank of America Merrill Lynch, if Germany left the bloc, the fair value of EUR/USD would drop by 2%, while if Italy quits it would increase by 3%. Сhart. Daily EUR/USD UBS, Deutsche Bank, Nomura on potential collapse of euro Commerzbank: comments on AUD/USD 2011-11-28 17:05 Technical analysts at Commerzbank note that Australian dollar managed to find support versus its US counterpart in the $0.9660/70 (78.6% Fibonacci retracement) and open on Monday with a positive gap rising to the levels above $0.9900. However, the specialists think that the current rebound is only a correction and that the outlook for AUD/USD will remain negative as long as it’s trading below resistance line at $0.9985. According to the bank, if the pair gets below the previously mentioned support it will fall to October minimum at $0.9388. In the longer term Commerzbank expects Aussie to slide to $0.8545. Chart. Daily AUD/USD Commerzbank: comments on AUD/USD

Ichimoku. Weekly forecast. GBP/USD 2011-11-28 14:29 Weekly GBP/USD As it was expected last week British pound slumped. The prices broke through support of both Tenkan-sen (2) and the lower border of Kumo – Senkou Span “B” (4) and got below the Ichimoku Cloud. The bearish Cloud retains its size (5). Kijun and Tenkan are directed horizontally. The pair may show some upside corrections, though now all attempts of sterling to rebound will face rather strong resistance (1, 2, 3, and 4). Chart. Weekly GBP/USD Daily GBP/USD As projected, the Standard line (1) and the Turning line (2) formed the “dead cross” (5). The prices went sharply down following the falling Tenkan-sen (2) and dropped under Kumo. The Ichimoku Cloud (4) hasn’t stayed bullish for long: its borders – the lines Senkou Span A (3) and B once again came together to one point, the bears are ready to get the situation under control. The only support for the British currency is provided by September and October minimums. Chart. Daily GBP/USD Ichimoku. Weekly forecast. GBP/USD Ichimoku. Weekly forecast. USD/JPY 2011-11-28 14:30 Weekly USD/JPY Last week Japanese currency managed to close above the Turning line (1) obtaining support. Resistance for the prices is provided by the Standard line (2) and the descending Ichimoku Cloud (3, 4). The prospects of the pair will significantly improve if US currency manages to overcome Kijun-sen. Chart. Weekly USD/JPY Daily USD/JPY US dollar has managed to rise above both the Turning line (1) and the Standard line (2) and get above the thin daily Ichimoku Cloud. This may be regarded as an important breakthrough taking into account the pair’s dynamics during the previous months. Tenkan-sen stopped declining (1) and become horizontal. As a result, the bulls’ prospects improved, although the market remains in the situation of uncertainty. The thin Cloud (3) shows that neither bulls nor bears have significant advantage. Chart. Daily USD/JPY Ichimoku. Weekly forecast. USD/JPY Ichimoku. Weekly forecast. USD/CHF 2011-11-28 14:32 Weekly USD/CHF The bulls keep moving the pair’s rate higher, to the upper border of the Ichimoku Cloud. The prices are supported by the Turning line (1) and the Senkou Span A (3). Tenkan-sen (1) and Kijun-sen (2) hold though weak, but still the “golden cross”. Kumo switched to the bullish mode, though it remains very thin. However, Tenkan and Kijun are horizontal that may hold the pair from growth. Chart. Weekly USD/CHF Daily USD/CHF On the daily chart Tenkan-sen (2) and Kijun-sen (1), which have so far formed the “golden cross” (3) – the strong bullish signal as the lines intersected above Kumo, are directed horizontally supporting the greenback. However, the bullish Ichimoku Cloud has become very thin (4). Whether the greenback will be able to continue growth this week depends whether it manages to overcome October maximums. Chart. Daily USD/CHF Ichimoku. Weekly forecast. USD/CHF

Concerns about euro zone’s future strengthen 2011-11-25 16:28 The single currency hit 7-week minimum versus US dollar sliding to the levels in the $1.3250 area. The risk environment seems to be quite unfavorable. Yesterday German Chancellor Angela Merkel spoke against the idea of joint euro bonds and the bigger role for the European Central Bank in solving the crisis. Alarm signal came on Wednesday when German government was able to sell only 3.644 billion euro ($4.92 billion) in 10-year bunds of the planned amount of 6 billion euro for an average yield of 1.98%. After auction the yield rose to 2.09%. Analysts at Commerzbank warn that if German bunds lose their safe haven status, this will be a very hard blow for euro. The specialists underline that even during the severe times of 2008 and 2009 these securities were trading stable enough. The fears about the region’s future are mounting. Italy’s 2-year yield climbed to the record high testing the levels above 7.5%. The majority of specialists are bearish on EUR/USD. Support for the pair now lies at $1.3145 (October 4 minimum) and $1.3045 (61.8% retracement of euro's advance in 2010-2011). Chart. Daily EUR/USD Concerns about euro zone

MIG Bank: US dollar may advance to 94 yen 2011-11-25 12:43 Technical analysts at MIG Bank believe that if the greenback manages to overcome resistance at 83.30 and 85.50 yen, it will be able to add more than 20% and rise to 18-month maximum at 94 yen. Such forecast is based on the Elliott Wave theory. According to this theory, any market’s lifecycle may be divided into 8 waves: 5-wave major trend cycle and 3-wave corrective cycle. The specialists claim that the 40-year cycle of the long-term impulsive wave on USD/JPY enters the phase of reversal. In their view, the fifth wave will end either in November or December and then dollar will start strengthening. The bank thinks that the pair may revisit the record minimums before beginning to advance and even dip below 74 yen forming a spike down that, in its turn, will trigger a short squeeze and reversal. If dollar manages to close above 80.60 yen, it will be the first sign that US currency is ready to rally. Chart. Weekly USD/JPY MIG Bank: US dollar may advance to 94 yen Analysts on the AUD/USD prospects 2011-11-25 13:56 Analysts at NAB expect Australian dollar to trade versus the greenback between $0.95 and $1.03 in the near term. The risks for AUD/USD are to the downside as the market’s risk sentiment is affected by the euro zone’s debt crisis. Economists at ANZ Bank believe that it’s becoming more and more likely that the Reserve Bank of Australia will cut interest rates in December. Strategists at JP Morgan, RBC, BNP Paribas and Citi are also almost sure in such outcome. Analysts at Deutsche Bank, on the contrary, sound optimistic. In their view, earlier fall in oil prices and more stimulatory policy will lead to better growth and risk sentiment in the final quarter of the year. The specialists expect equities to gain reducing demand for the greenback. As a result, the economists believe AUD/USD will advance to $1.06 or even to $1.10. Chart. Daily AUD/USD Analysts on the AUD/USD prospects EUR/USD is on its way down to October low 2011-11-25 14:41 Currency strategists at Morgan Stanley and Commerzbank think that the single currency is moving down versus the greenback towards October 4 minimum at $1.3145. Analysts at Societe Generale are very bearish on EUR/USD. In their view, after the pair hits $1.3145, the next downside target will lie at $1.1875 (June 2010 minimum). In their view, support levels are found at $1.3240 and then $1.2860 and $1.2590. Chart. Weekly EUR/USD EUR/USD is on its way down to October low

Commerzbank, Wells Fargo: comments on EUR/USD 2011-11-24 13:02 Technical analysts at Commerzbank note that the outlook for EUR/USD is negative as long as it’s trading below resistance at $1.3526. The specialists say that support for the pair lies at $1.3360 and $1.3281. Currency analysts at Wells Fargo expect the single currency to fall in December to $1.2400 or lower. In their view, the European Central Bank will ease its monetary policy in order to help the region’s economy. Chart. Daily EUR/USD Commerzbank, Wells Fargo: comments on EUR/USD Commerzbank: comments on USD/JPY 2011-11-24 13:27 Technical analysts at Commerzbank note that the greenback has managed to break yesterday above the daily Ichimoku Cloud trading versus Japanese yen. The specialists think that even though today USD/JPY has eased down, it will be able to resume the recovery. In their view, the pair will be supported at 76.22 (78.6% Fibonacci retracement) and 75.94 (August 19 minimum). According to the bank, resistance for US currency lies at 79.56 (4-year downtrend line) and 80.37 (55-week MA). If US dollar overcomes these levels, the current trend will reverse. Chart. Daily USD/JPY Commerzbank: comments on USD/JPY RBS: Bank of England will do more QE in February 2011-11-24 16:48 This month the Bank of England's Monetary Policy Committee decided to keep the target level of quantitative easing at 275 billion pounds after raising it by 75 billion in October. According to the MPC November meeting minutes released yesterday, the risk that British economy will suffer from the European debt crisis increased as well as the chances of a worst-case outcome in Europe. Specialists at Markit underline that the euro zone’s drama will be the determinant of Britain’s monetary policy. The minutes showed that the policymakers expect UK economy to stagnate in the final quarter of 2011. Inflation is expected to fall significantly by the middle of the next year. Strategists at RBS were expecting that at least one of the MPC members will vote for additional purchases, but the decision to keep things as they are was unanimous. So, more easing in December is unlikely, the probability of more QE January has been reduced significantly, so one should expect the central bank to act in February when the current QE is completed. Analysts at Investec claim that taking into account the uncertain economic conditions the BoE will announce additional easing measures of 100 billion pounds over the course of 2012. Economists at Ernst & Young are sure that more QE is coming during the next months. Analysts at Capital Economics admit that not all members seem entirely convinced more QE will be needed as some of them said that “the risks to inflation around the target are balanced”. However, others thought that the Inflation Report forecasts mean that “a further expansion of the asset purchase program might well become warranted in due course”. According to Capital Economics, more QE in February is quite likely. Chart. Daily GBP/USD RBS: Bank of England will do more QE in February J.P.Morgan: forecast for ECB rates 2011-11-24 17:42 Analysts at J.P. Morgan believe that as the euro area’s economy is in danger of recession the European Central Bank will lower its benchmark rate from the current level of 1.25% to 0.5% by the middle of the next year. In their view, the ECB will narrow the interest rate corridor to +/-25 basis points, so that the deposit facility rate will fall to 0.25%. In November the central bank reduced the rates from 1.5% to 1.25%. According to J.P. Morgan, in December the ECB will decrease rates to 1%. It’s necessary to note that even during the recession in 2008-2009 the central bank didn’t cut the borrowing costs below 1%. J.P.Morgan: forecast for ECB rates

Scotia Capital, BBH and Merrill Lynch favor loonie 2011-11-24 10:25 Analysts at Scotia Capital recommend selling EUR/CAD. The specialists note that the single currency will stay under pressure due to the euro zone’s debt crisis, while Canadian dollar will be able to appreciate due to Canada’s top credit rating, stable government, rather strong economy and commodity base. Strategists at Brown Brothers Harriman share this opinion. In their view, the pair will fall from the current levels in the 1.4000 area to the levels below 1.3800. Economists at Bank of America Merrill Lynch advise investors to open shorts on AUD/CAD. According to the bank, Australian dollar will suffer more in case of the global growth slowdown. In addition, the Reserve Bank of Australia began easing its policy, while the Bank of Canada remains on hold. Chart. Daily EUR/USD Chart. Daily AUD/CAD Scotia Capital, BBH and Merrill Lynch favor loonie BoA: Aussie will fall against the greenback 2011-11-24 10:49 Technical analysts at Bank of America believe that Australian dollar may fall to more than 1-year minimum versus the greenback. The specialists note that bears got more powerful after AUD/USD breached support of 2008 maximums in the $0.9927/0.9850 area. In addition, Aussie will likely be affected by the market’s risk aversion. According to the bank, the pair is now on its way down to $0.9330. If it fails to hold at this point, it will be poised for a decline to $0.9000. Australian currency lost 7.7% versus its US counterpart in November showing the second worst results among the major currencies after New Zealand’s dollar. Chart. Daily AUD/USD BoA: Aussie will fall against the greenback Deutsche Bank: 2012 forecast for USD/JPY 2011-11-24 11:22 Analysts at Deutsche Bank claim that Japanese yen will keep being supported by the concerns about global economic slowdown. In their view, there are many factors pointing at yen’s appreciation, such as Japan’s current account surplus, high relative real yields and the inability of the nation’s policymakers to stem the advance of the national currency. According to the bank, by the middle of the next year the pair USD/JPY will drop to 72 yen and then consolidate in the zone of 75 yen by the end of 2012. Chart. Daily USD/JPY Deutsche Bank: 2012 forecast for USD/JPY Deutsche Bank: comments on USD/CAD 2011-11-24 12:26 Analysts at Deutsche Bank underline that Canadian economic figures are as discouraging as the US ones. Never the less, the specialists don’t think that the Bank of Canada will ease its monetary policy, even though the market’s pricing in 25-basis-point rate cut through March 2012. According to the bank, loonie’s rate will as usual depend on the market’s risk sentiment. At the same time, all eyes are now focused on the euro area and the United States is no longer the epicenter of the crisis, while Canadian economy is closely connected with American one. As a result, Deutsche Bank expects USD/CAD to test 2010 maximums in the $1.0800 area. The greenback will be capped by these levels unless we see “hard-landing” in Europe. All in all, the analysts think that the next year the pair will fluctuate around parity. Chart. Daily USD/CAD Deutsche Bank: comments on USD/CAD

JPMorgan Chase: forecast for USD/JPY 2011-11-23 10:19 Analysts at JPMorgan Chase believe that the greenback may renew record minimums versus Japanese yen in 2012. In their view, in the first half of the next year USD/JPY will stay range bound due to the recession in Europe and weak economic growth in the rest of developed world. In the second half of 2012 global economy will start stabilizing and the euro zone’s crisis will be moving to the resolution. As a result, the risk sentiment will improve. The economists think that the demand for US dollar as a safe haven will fall and it will go down versus the most of its counterparts including Japanese currency. The strategists claim that the next year the pair may hit the levels of 70-72 yen. According to JPMorgan Chase, the risk of the Bank of Japan’s interventions aimed to weaken the national currency won’t prevent investors from buying yen as their effect will still be too short-lived. Chart. Daily USD/JPY JPMorgan Chase: forecast for USD/JPY Deutsche Bank: 2012 forecast for GBP/USD 2011-11-23 10:43 Analysts at Deutsche Bank expect British pound to lose versus the greenback in the first half of the next year. At the same time, the specialists underline that sterling’s decline will be contained by $1.5100. According to the bank, the pair GBP/USD will slide to $1.5300 in the first 3 months of 2012, and then fall to $1.5100 in the second quarter before rebounding to $1.5700 by the year-end. Chart. Daily GBP/USD Deutsche Bank: 2012 forecast for GBP/USD Deutsche Bank: 2012 forecast for EUR/USD 2011-11-23 10:55 Analysts at Deutsche Bank believe that the single currency will keep declining versus the greenback in the first half of 2012 as the European Central Bank will be under pressure to ease its monetary policy to help the region combat the debt crisis. The specialists think that EUR/USD will go down to $1.3000 in the first quarter of the next year, then hit $1.2500 by the middle of the year and recover to $1.3500 by the year-end. Chart. Daily EUR/USD Deutsche Bank: 2012 forecast for EUR/USD Consensus Economics: seasonal effect on euro 2011-11-23 11:31 Consensus Economics, a macroeconomic survey firm, notes the demand for the single currency tends to pick up in December. It happens because portfolio managers buy euro as the riskier asset trying to get more profit to make their holdings look better ahead of the year-end. According to the data processed by the company, the European currency usually gains about 0.4% and US dollar retains its value, while Canadian dollar and British pound weaken. Strategists at BMO Capital Markets, however, underline that the euro zone’s debt crisis may change the situation and doubt that in the current circumstances euro will be able to get a lift from the seasonal effect. Some experts say that taking into account everything mentioned above, the market’s pressure on the ECB to ease policy will play the role of euro's rate determinant. Consensus Economics: seasonal effect on euro

Commerzbank: comments on AUD/USD 2011-11-22 12:17 Technical analysts at Commerzbank note that Australian dollar breached yesterday support versus its US counterpart in the $0.9929/10 area (August minimum, Fibonacci level). The specialists expect AUD/USD to fall to $0.9688 (78.6% Fibonacci retracement) and plan to take profit at this point. If the bears keep pulling the market, the next downside target will lie at $0.9388 (October 4 minimum). According to the bank, resistance levels are situated at $1.0127 (resistance line), $1.0340 (November 14 maximum) and $1.0445. Chart. Daily AUD/USD Commerzbank: comments on AUD/USD Rating agencies affirmed US credit rating 2011-11-22 13:07 The greenback managed to recover a bit higher versus Japanese yen at the beginning of today’s Asian session as the major rating agencies affirmed US credit grades: - Standard & Poor’s: America will retain AA+ rating even if the Supercommittee fails to reach agreement on reducing the nation’s budget deficit by Thursday (US lost its top grade by S&P on August 5); - Moody’s Investors Service kept US rating at the top Aaa level with negative outlook; - Fitch Ratings repeated that there will likely be a downside revision to US rating outlook in case of the Supercommittee’s failure. Risk sentiment has slightly improved. The pair USD/JPY managed to get above 77 yen. However, there hasn’t been enough positive news to detain yen’s appreciation and the pair soon resumed decline drifting lower. Support levels for American currency are found at 76.75 (November 21 minimum) and 76.55 (November 18 minimum). Resistance levels for US dollar lie at 77.35 (today’s maximum), 77.50 (November 15 maximum) and 77.90 (November 9 maximum). It’s also necessary to note that investors are closing positions ahead of Japan’s holiday tomorrow and US one on November 24. Chart. H4 USD/JPY Rating agencies affirmed US credit rating World Bank: East Asian economic prospects 2011-11-22 15:00 China: the economists expect soft landing – the nation’s GDP growth will ease down from 9.1% on 2011 to 8.4% in 2012. The nation’s inflation rate will decline from 5.3% this year to 4.1% the next year. Asia: economic growth of developing East Asia (without Japan, Hong Kong, Taiwan, South Korea, Singapore and India) will slow down from 8.2% in 2011 to 7.8% the next year. According to the World Bank, Asia will be able to withstand the negative effects coming from the euro zone’s debt crisis with help of their high reserves and current account surpluses. World Bank: East Asian economic prospects Credit Suisse: the climax for euro area is approaching 2011-11-22 16:31 Analysts at Credit Suisse believe that in order to save the single currency European leaders –primarily, France and Germany – will have to reach by the middle of January “a momentous deal” to increase the degree of integration and transform the monetary bloc into the fiscal and political union. The specialists expect that in this case the ECB will agree to cut its benchmark rate and provide banks with longer-term funds and do all it can to prevent euro’s collapse. In their view, during the most critical moment the Italian and Spanish 10-year bond yields may surge above 9% and French yields may bounce above 5%. Bloomberg reports that for the hints on the euro zone’s future one should pay attention to the European Commission’s recommendations on euro-area debt which are to be published this week and by the French President Nicolas Sarkozy’s speech next month on the 20th anniversary of the Maastricht Treaty. Chart. Daily EUR/USD Credit Suisse: the climax for euro area is approaching MIG Bank, KBC Bank: euro’s gaining versus pound 2011-11-22 17:41 The single currency is gaining versus British pound for the third day in a row as the market expects the Bank of England’s November meeting minutes (released tomorrow at 9:30 GMT) to show that the policymakers are inclining to more monetary stimulus to encourage the nation’s weak economic growth – UK Prime Minister David Cameron claimed yesterday that the growth figures are unsatisfactory. As a result, investors’ pound-negative sentiment didn’t fade even as the Office for National Statistics reported that the country’s net excluding support for banks contracted from 7.7 billion pounds a year earlier to 6.5 billion pounds in October. Analysts at MIG Bank note that the outlook for the pair EUR/GBP will turn bullish if manages to hold above 0.8652. Strategists at KBC Bank claim that support for the single currency lies at 0.8595, 0.8553 (this week’s minimum) and 0.8518 (November 15 minimum), while resistance is seen at 0.8665 (50-day MA). Chart. Daily EUR/GBP MIG Bank, KBC Bank: euro

Nomura: EUR/USD will fall by the year-end 2011-11-22 10:27 Analysts at Nomura expect the single currency to drop versus the greenback by the end of the year. In their view, as the euro zone’s debt crisis escalates, European investors will likely stop repatriating their assets. That will be another blow for euro. According to the data from the ECB, the region’s investors brought home 65.9 billion euro ($89 billion) in August and 11.6 billion euro in September – these figures significantly exceed 12-month average inflow of 629 million euro. Such demand made EUR/USD trade in November in the $1.3871/1.3422 area which is at least 12% above its lifetime average of $1.2042. Nomura believes that the pair will end 2011 at $1.30. Chart. Daily EUR/USD Nomura: EUR/USD will fall by the year-end BMO: trading ahead of Supercommittee 2011-11-22 10:34 Here is another trading strategy on the approaching deadline for US Congressional deficit Supercommittee. Analysts at BMO Capital are pessimistic about the committee’s ability to come up with the budget solution. The specialists note that there are 3 possible outcomes: Democrats and Republicans will reach a deal on reducing shortfall by more than $2 trillion, by just the required amount of $1.2 trillion or they’ll fail to find a compromise and the nation will face automatic cuts. In their view, the latter variant is the most likely one. BMO advises traders to sell NZD/USD at current levels stopping above $0.7650 and targeting $0.7175. Chart. Daily NZD/USD BMO: trading ahead of Supercommittee Moody's: France’s rating outlook may deteriorate 2011-11-22 11:29 Moody's Investors Service repeated its October warning announcing that the outlook for France’s AAA may be changed to negative. The risks to the nation’s rating come from the sustained rise in its debt yields combined with weakening economic growth. According to Agence France Tresor, France's average medium- and long-term financing costs for the first 11 months of the year accounted only for 2.78% – the second lowest level since the creation of the single currency. However, last week the nation’s 10-year bond yields surged to 3.7% and the spread over German bunds exceeded 200 basis points rising too the maximal level since France adopted euro. Moody's warned that if the increase in yields by 100 basis points means the increase of funding costs by 3 billion euro a year. Taking into account the fact that French government projects 1% GDP growth in 2012, higher interest burden will make achieving targeted fiscal deficit reduction more difficult. Many analysts believe that the only way to save the region from escalating borrowing costs and the potential recession is the bond buying at the secondary market by the ECB or the EFSF. Moody's: France UBS: forecasts for British pound 2011-11-22 11:52 In the short term the specialists see British pound under pressure versus the greenback as the Bank of England went through additional QE last month. In the medium term, however, UBS expects demand for sterling increase as the UK will act to reduce its budget shortfall and the declining inflation will make the real rates in Britain higher. The bank lifted up its 3- and 6-month forecasts for GBP/USD from $1.48 to $1.52 and from $1.62 to $1.65 respectively. The estimates of EUR/GBP future rate were lowered from 0.88 to 0.85 in 3 months and from 0.83 to 0.81 in half a year. Chart. Daily GBP/USD UBS: forecasts for British pound

Commerzbank: comments on EUR/USD 2011-11-21 15:01 Technical analysts at Commerzbank note that euro’s decline versus the greenback paused ahead of support provided by the level of 78.6% Fibonacci retracement in the $1.3380/60 area. The specialists think that EUR/USD will correct upwards rising to $1.3835/80. Then the bank expects the pair to resume decline moving down to $1.3270 (support line) and $1.3145 (October 4 minimum). Resistance is seen in the $1.4250/85 zone. The long-term target remains at $1.20. Chart. Daily EUR/USD Commerzbank: comments on EUR/USD J.P.Morgan: comments on GBP/USD 2011-11-21 15:02 The Bank of England’s November meeting minutes are released on Wednesday, November 23 at 9:30 a.m. GMT. Analysts at J.P. Morgan believe that British Monetary Policy Committee will sound extremely dovish. The specialists also think that US Congressional deficit supercommittee won’t come up with the debt reduction steps. As a result, the market’s risk aversion, in their view, will remain very strong. Negative risk sentiment, in its turn, will make sterling decline versus the greenback. According to the bank, it’s necessary to sell GBP/USD in the $1.5785 zone stopping above $1.6000 and expecting the pair to drop to $1.5385. Chart. Daily GBP/USD J.P.Morgan: comments on GBP/USD J.P. Morgan: buy Aussie versus US dollar 2011-11-21 16:14 Analysts at J.P. Morgan claim that as the situation in the euro area is worsening and the risks of contagion are mounting the possibility that the European Central Bank will have to step in increases. The specialists underline that if the ECB acts, the easing will most likely be conducted in the form of the rate cuts. In such case the yield for the euro gets less attractive. If the central bank decides to undertake bond buying, this will make investors concerned about inflation and weight on the single currency. At the same time, if ECB succeeded, this would be positive for euro. So, the economists expect the risk sentiment to keep deteriorating to the critical point where the ECB will be forced to save the currency union and then revive. The bank thinks that one shouldn’t lose trading opportunity here. According to J.P. Morgan, it’s necessary to open longs on AUD/USD in the $0.9500 area stopping below $0.9100. The economists expect the pair to rebound to $1.0500. Chart. Daily AUD/USD J.P. Morgan: buy Aussie versus US dollar

Ichimoku. Weekly forecast. GBP/USD 2011-11-21 14:06 Weekly GBP/USD British currency keeps trading within the Ichimoku Cloud. The bears managed to lower pound to the Turning line (2) breaching the Standard line (1). As a result, sterling is currently supported only by Tenkan-sen (2) and the lower border of Kumo – Senkou Span B (4), while resistance for pound is provided by Kijun-sen (1) and Senkou Span A (3). The bearish Cloud retains its size (5). Kijun and Tenkan are horizontal. Chart. Weekly GBP/USD Daily GBP/USD As we’ve expected, last week the bulls gave up to resistance in the $1.6100 area. At first there was a sharp decline, but by Thursday the bulls managed to stop the decline and make the pair consolidate. The prices went down breaking the Turning line and then the Standard line. Tenkan-sen and Kijun-sen approached each other preparing to form the “bearish cross” (1). The bullish Ichimoku Cloud (3) retained its size. Pound is likely to dip this week at least to Senkou Span A (2). Chart. Daily GBP/USD Ichimoku. Weekly forecast. GBP/USD Ichimoku. Weekly forecast. USD/JPY 2011-11-21 14:08 Weekly USD/JPY Japanese currency keeps gradually appreciating versus its US counterpart because investors regard yen as a refuge. This week the confidence in US dollar will be especially weak as it’s expected that the Democrats and the Republicans in the Supercommittee will fail to reach a deal on reduction of US budget deficit by $1.2 trillion. The pair USD/JPY doesn’t have any solid support except for the record minimums hit before the last intervention, while the resistance for prices is provided by the Turning line (1), the Standard line (2) and the descending Ichimoku Cloud (3, 4). In addition, Tenkan-sen (1) and Kijun-sen (2) still hold strong “dead cross” in place. Chart. Weekly USD/JPY Daily USD/JPY On the daily Ichimoku chart the pair’s condition keeps worsening: the bears are pulling the greenback systematically lower so that it got below Kumo (4). The lines Tenkan and Kijun formed the “dead cross”. The lagging Chinkou Span crossed down the price chart while the prices themselves were on the lower edge of the Cloud. Resistance for the pair is provided by the Turning line (1), the Standard line (2) and Senkou Span A (4). The market is still in the state of uncertainty: Kijun-sen, which characterizes the longer-term trend, remains horizontal, while the thin Cloud (3) shows that neither bulls, nor bears have any advantage. Chart. Daily USD/JPY Ichimoku. Weekly forecast. USD/JPY Ichimoku. Weekly forecast. USD/CHF 2011-11-21 14:10 Weekly USD/CHF The bullish attempts to enter the Ichimoku Cloud finally succeeded: the pair managed to overcome resistance of Senkou Span A (3) and got inside Kumo. The descending Cloud (4) is very narrow – the bulls have all chances to make it change direction and reverse the trend upwards. The prices are supported by the Turning line (1). Tenkan-sen (1), Kijun-sen (2) hold though weak, but still “golden cross”. At the same time, Tenkan and Kijun are horizontal that may hold the pair from growth. Chart. Weekly USD/CHF Daily USD/CHF On the daily chart Tenkan-sen and Kijun-sen, which have so far formed the “golden cross” – the strong bullish signal as the lines intersected above Kumo, are directed horizontally supporting the greenback. The lagging Chinkou Span broke above the price chart while the prices remained above the Cloud, so the outlook is bullish. However, the bullish Ichimoku Cloud has become very thin (3). The bulls will have to make another effort getting above October maximum to in order to turn the overall neutral trend to the positive one. Chart. Daily USD/CHF Ichimoku. Weekly forecast. USD/CHF

Westpac: AUD/USD trading recommendations 2011-11-18 12:12 Technical analysts at Westpac expect AUD/USD to bounce to $1.0200. The specialists recommend selling Aussie on the rallies expecting the pair to drop to $0.9700. In their view, support at $0.9910 won’t be able to hold the bears. Chart. Daily AUD/USD Westpac: AUD/USD trading recommendations Euro area: comments from the policymakers 2011-11-18 12:59 AAA-rated European nations are beginning to express openly that they are against expanding rescue measures for the most indebted members of the currency union. Jyrki Katainen, Finnish Prime Minister thinks that the euro area is running out of options to solve the debt crisis. Italy and Greece should act on their own to convince the markets that they are able to reduce the debt burden. Katainen says that the second bailout deal for Greece adopted on October 26 didn’t manage to calm investors: since that time Italian 2-year bond yields surged by 150 basis points. Germany and Finland both oppose the creation of common euro bonds. France has openly called for the ECB to get more involved by issuing the European Financial Stability Facility (EFSF) a banking license that would allow it to refinance itself with the ECB liquidity operations. German Chancellor Angela Merkel criticized the proposition that the ECB has to become a lender of last resort. Reuters cites European and IMF officials who claim that the authorities discuss the possibility of the ECB lending money to the IMF, rather than any euro zone government that would help to get round the government restrictions. The IMF refused to release the next portion of its loan to Greece until the nation’s Prime Minister Lucas Papademos wins broad political support for austerity measures. Mario Monti, Italian Prime Minister pledged additional cuts to those targeted by Silvio Berlusconi. World Bank President Robert Zoellick claimed that the nations from China to the United Stets may be willing to support Europe through the IMF if the euro zone’s policy makers agree on a plan to stem their debt crisis. Daily EUR/USD Euro area: comments from the policymakers Options market expects euro’s slump 2011-11-18 13:49 Wall Street Journal reports that 1-month risk-reversal indicator, which measures the weight of the bearish options bets on the single currency on the bullish ones, surged to 4 volatility points overcoming the level of 3.5 volatility points where it was seen at the peak of the financial crisis in 2008. That means that investors expect a sharp fall in EUR/USD during the next month. Analysts at ING underline that rising yields on European bonds stirs up the market’s concerns. Specialists at Brown Brothers Harriman think that euro will react to the growing concerns about France, Belgium, Austria and other core countries that threaten to take the sovereign debt crisis to a new level. Chart. Daily EUR/USD Options market expects euro Commerzbank: euro’s recovery will soon be over 2011-11-18 14:18 The single currency is recovering versus the greenback: EUR/USD has managed to rise from the 5-week minimums in the $1.3420 area to the levels above $1.3500. Never the less, technical analysts at Commerzbank expect euro’s recovery to be short-lived. In their view, risk aversion will remain strong and the bears will use the opportunity to sell the European currency on its advance against its US counterpart. As a result, the bank recommends selling the pair in the $1.3650 zone. According to the specialists, resistance in the $1.3870/1.3900 area will cap EUR/USD for a long time from now. Chart. Daily EUR/USD Commerzbank: euro Citigroup: scenarios for US dollar after the Supercommittee 2011-11-18 16:34 Analysts at Citigroup believe that investors’ attention that so far has been focused on the situation in the euro zone will turn next week to the United States where the so-called Supercommittee which consists of Democrats and Republicans is trying to reach a deal on deficit reduction. The specialists note that according to the survey they have conducted among investors, fewer than 20% of the respondents expect the committee to reach agreement on how to proceed with the cuts. It will be recalled that if the parties fail to agree, the nation will face automatic cuts. Citigroup economists are more optimistic. In their view, approaching election will urge the lawmakers to compromise. If these projections come true, Australian dollar will be able to make significant advance. Talking into account the fact that trading volumes will likely be small ahead of the Thanksgiving holiday on November 24, the bank thinks that AUD/USD could add 2-3% on the positive outcome. At the same time, the strategists warn that the odds are that the Supercommittee fails to come up with an agreement are rather high. In such case the greenback will get a 1-2% lift as a safe haven. The biggest gains of US currency will be seen versus euro and Canadian dollar. Specialists at RBC Capital Markets, however, don’t agree with the latter, they think that in the latter case US dollar will weaken as it did in July and August. Chart. Daily AUD/USD Citigroup: scenarios for US dollar after the Supercommittee

UBS about Spain-related risks 2011-11-17 15:28 Economists at UBS give 3 reasons to be concerned about Spain’s economic prospects: firstly, the high possibility that the country misses its deficit-reduction target, secondly, the risk of Spain’s falling into recession the next year and, thirdly, the precarious position of Spanish banks which will likely need more state money. Spanish Finance Ministry announced that the nation’s GDP will add 0.8% in 2011 failing to meet the 1.3% growth target. Spain’s economy stagnated in the third quarter. The country’s jobless rate is close to 23%. It’s too early to make predictions whether the deficit goal of 6% of GDP will be attained this year as the regions’ third-quarter budget data aren’t available yet. In 2010 Spain’s shortfall was equal to 9.3% of GDP. Spain faces general elections on Sunday, November 20. The ruling Socialist Party is likely to lose to the opposition People’s Party which pledges to meet the deficit goal of 4.4% of GDP in 2012. The 10-year Spanish bond yield rose to 6.4% for the first time since August. The specialists warn that the market’s rather optimistic attitude to Spain in comparison with Italy may change in the coming months or even weeks. UBS about Spain-related risks Capital Economics: the BoE will increase QE 2011-11-17 16:35 The Bank of England reduced its forecast for UK economic growth in 2012 from 2% to 1% claiming that British economy will suffer from the euro zone’s debt crisis. The central bank also slashed outlook for CPI growth rate claiming that by the end of the next year inflation will fall from the current 5% level below the 2% target. Economists say that although the BoE didn’t signal further easing the market now expects it to expand its QE program in 2011 by at least 50 billion from the current 275 billion pounds. Analysts at Capital Economics think that the central bank’s inflation report suggests that rates will stay on the minimal levels for the foreseeable future and that British economy will likely need even more loose monetary policy. The specialists think that even the revised forecast of the central bank seems to be too optimistic. In their view, Britain’s economy will stagnate in 2012. Capital Economics projects the 75 billion pounds of additional asset purchases in February but adds that if the economic data remains weak during the next 2 weeks, the BoE will have to announce extra support already in December. Chart. Daily EUR/USD Capital Economics: the BoE will increase QE Analysts are still negative on euro 2011-11-17 17:29 Spain’s borrowing costs rose to the maximal level since 1997 – the nation’s 10-year bond auction today has fueled concerns about the spreading of the European crisis to France and other core euro zone economies, such as the Netherlands and Finland. Short-term forecasts Morgan Stanley: negative outlook for the single currency. The specialists advise to sell euro targeting $1.31 lowering stops to $1.3580. UBS: if EUR/USD breaks below support at $1.3406, it will begin declining to $1.3346. Middle-term forecasts Nomura: euro will slip to $1.30 by the end of the year, so it’s recommended to sell EUR/SUD. Brown Brothers Harriman: the pair will finish 2011 at $1.29. Mizuho Corporate Bank: euro will fall to $1.30 by the year-end, trading will be very volatile. Citigroup: EUR/USD will decline to $1.31 by the end of 2011 and to $1.25 in the first half of 2012. Chart. Daily EUR/USD Analysts are still negative on euro Merkel proposed to change EU’s treaties 2011-11-17 17:45 German Chancellor Angela Merkel proposed today to change the EU's treaties making the European institutions able to intervene in national budgets in case deficit rules were breached. In her view, complaints should be brought to the European Court. Merkel thinks that the European Union needs greater integration. Here are some of Merkel’s comments (from Reuters): “I am convinced that only political solutions can resolve the situation… A breakthrough to a new Europe can only happen if we are ready to change our treaties.” “This can be limited to euro states, it can be done in the form of a protocol ... it would be a very limited change to the treaty”. “But national governments must be prepared to tie themselves to the community in a binding way.” “There are ... many good political and economic reasons to further integrate the 27-member EU, as opposed to the 17-member euro zone”. Merkel proposed to change EU

Commerzbank: comments on GBP/USD 2011-11-17 11:51 Technical analysts at Commerzbank believe that after British pound has broken support of the 55-day MA and 38.2% Fibonacci retracement at $1.5825 it’s poised versus the greenback down to $1.5632 (October 18 minimum) and then to $1.5271 (October 6 minimum). In the longer term the specialists expect sterling to slide to the support line of the uptrend from 2009 to 2011 at $1.5050. According to the bank, resistance for GBP/USD is found at $1.6060 (downtrend line) and $1.6136 (200-day MA). The outlook for the pair will remain negative as long as it’s trading below $1.6185, the 61.8% Fibonacci retracement of pound’s decline from August maximums. Chart. Daily GBP/USD Commerzbank: comments on GBP/USD RBC: euro managed to recover a bit versus dollar 2011-11-17 12:54 The single currency has managed to recover a bit versus the greenback after it slumped earlier this week to the minimal level since October 10 in the $1.3420 area. Analysts at RBC claim that euro got lift from short-covering and the advance of US stock futures. The specialists say that the further dynamics of EUR/USD today will depend on the results of Spanish and French bond auctions. In addition, the pair’s rebound may be explained by the speculation that the Fed will do additional quantitative easing. It’s recommended to pay attention to the speech of New York FRB President William Dudley at 5:50 p.m. GMT. The market is also looking to see the increase in US Jobless claims (1:30 p.m. GMT). At the same time one should remember that the situation in the euro area remains very tense. Strategists at Brown Brothers Harriman warn traders that if euro breaks below $1.3400, it will slide to October minimum at $1.3145. Chart. Daily EUR/USD RBC: euro managed to recover a bit versus dollar Danske Bank: yen will keep strengthening 2011-11-17 13:21 Analysts at Danske Bank expect Japanese yen to keep strengthening versus the greenback due to its safe haven status and Japan’s current account surplus. The specialists expect USD/JPY to renew the record minimum sliding to 75 yen in 3 months and to 74 yen in 6 months. In their view, loose monetary policy of the Federal Reserve is going to be more aggressive than the one of the Bank of Japan. As a result, yen’s appreciation will be interrupted only by the occasional interventions, but their effect will be short-lived. Chart. Daily USD/JPY Danske Bank: yen will keep strengthening BoA Merrill Lynch: sell GBP/USD 2011-11-17 14:01 Currency strategists at Bank of America Merrill Lynch note that the euro zone’s debt turmoil that threatens recession has a negative impact on the situation in UK as about 30% of the nation’s exports go to Europe and only 10% to the United States. As a result, the specialists expect sterling to stay under pressure versus the greenback. The bank advises traders to sell GBP/USD in the $1.5800 area stopping above $1.6100. According to Merrill Lynch, in the near term the pair will slide to $1.54, while in the medium term it will be poised to hit $1.50. The analysts note that the chances that British pound will be a safe haven from the European crisis are low. Chart. Daily GBP/USD BoA Merrill Lynch: sell GBP/USD