Ви отримали нашу картку від фонду?

Ви отримали
нашу картку від фонду?

Додайте її до свого профілю, щоб стежити за отриманими коштами.

Додайте її до свого профілю, щоб стежити за отриманими коштами.

Daily analysis 27.02.2014

27 Feb 2014 11:49|Marcin Lipka

Dyplomatic tension between Moscow and Kiev initiated EUR/USD sell out along with other currencies of the region. Hryvnia beat yet another infamous record and is now 11.00 UAH per dollar. After the latest reports from the East the zloty has significantlly weakened. If the situation doesn't improve, moving towards 4.20 by the end of the week is likely.

Macro data (CET- Central European Time). Survey is supplied by Bloomberg unless otherwise noted.

  • 14.00 CET: Inflation data from Germany (survey: HICP on 1.1% r/r level).
  • 14.30 CET: New factory orders from the US (survey: -1.6% m/m, transport excluded: -0.4%).
  • 14.30 CET: Weekly jobless claims from the US (survey: 335k).
  • 16.00 CET: Janet Yellen speech for Banking, Housing, and Urban Affairs Comittee (it was supposed to happen after the hearing before the House of Representatives, but waether conditions caused the meeting to be delayed. There is little chance for new details about the future FED monetary policy to show up).

EUR/USD falls. Hryvnia. Risk aversion

EUR/USD begun yesterday's session very calmly. The market slowly took positions before the afternoon US data, however, the EUR/USD sell out began three hours before the planned publication from over the ocean. The direct cause for that to happen were agencies' reports on the dyplomatic jostling between Russia and Ukraine (e.g. reports on the Russia's military exercise and combat readiness of troops in Sevastopol). Information about a death of a person during the riots in Crimea heated the atmosphere which was hot in the first place The situation of EUR/USD growth supporters was not improved by the macro data which came from USA at 16.00 CET. New houses' sale significantly crossed the economists' expectations (468k vs the estimations on level of 400k in January; seasonally equalled reading, annualized) and was highest since July 2008. The main pair tried to return above the level of 1.3700 during the Asian session. However, this attempt failed and Thursday began in limits of 1.3650 centre areas (which is 100 pips lower than yesterday). Despite the low risk aversion was not confirmed by, amongst others, the American stock exchange, the investors will carefully follow the information coming from Ukraine and Russia during following hours. Further growth of tension in these countries will be used as a buy signal for dollar and should still lay weight on EUR/USD rates. On the other hand, when the situation calms down, the investors should again observe publications of macro data from Europe and USA.

Recent events on the Ukrainian currency market can only be described as “dramatic”. At 10.45 CET the rate of USD/UAH reached the level of 11.0. Another reduction of the Hryvnia's price during recent hours (more than 5%), was the effect of Sergiy Kruglik's (director of foreign department in central bank) statement for CNBC. He said that monetary authorities “resigned from maintaining a constant currency rate”. Bloomberg also cites the statement of Ukraine's new prime minister, Arseniy Yatsenuk. In interview for BBC he declared the government intends to undertake “extremely unpopular” decisions, to put economic situation in order. News from Crimea and the signals sent from Moscow are also not without meaning for UAH evaluation. Apart from negative informations, there is also news about probability of Moscow's participation in financial aid for Ukraine. It is confirmed by Reuters' morning telegram in which Andrei Bokarev (chief of Russian Ministry's of Finances foreign co-operation department) declared: “all that I can say is that we will participate in IMF negotiations, and there is no option that we would stand aside”. It is clear that Hryvnia reached such moment that any piece of information can lead to either further panic sale of local currency or very strong adjustments. This situation will probably not calm down quickly and the levels pointed out by Goldman Sachs as target (12 Hryvnias per dollar) can still be tested this week.

In conclusion, until the situation between Russia and Ukraine is not stabilized, the trade will depend on the information coming from the East. It will concern the emerging markets' currencies as well as EUR/USD. When the sentiment is calmed down, we will return to traditional trade – better data from USA and worse from the Euro Zone (e.g. lower than expected inflation from Germany or the Euro Zone) will cause the fall of the main pair. On the other hand, weak macro reports from over the ocean and receding of perspective of monetary policy's loosening by ECB should support EUR/USD. Apart from today's data from Germany, one should also pay attention to new orders in American industry. Janet Yellen's postponed appearance in front of Senate Committee of Finances, should not contain any new informations, that could give any tips concerning the future of assets purchase program or changes in Federal Reserve forward guidance.

Zloty's significant weakening

Zloty resisted the outside pressure for a longer time but it clearly wore off within recent 24 hours. EUR/PLN currently tests the levels of 4.18 and CHF/PLN reaches 3.44. What is interesting about that is that national currency devalues faster than forint or lira (despite the fact that another recording was revealed in Turkey in which prime minister talks to his son about how to bribe businessmen; prime minister again denied the authenticity of this conversation). Because of the fact that yesterday's session has clearly swayed the zloty, investors playing on the Polish currency will carefully follow the information from behind the eastern boarder. If the situation on line Moscow – Kiev remains tense, we cannot exclude that we will test the levels of 4.20 on EUR/PLN and 3.46 on Swiss franc by the end of the week.

In conclusion, national currency's further wearing off is more probable than its fast return to the levels from yesterday morning. When we will consider the descends of EUR/USD, it is not excluded that we can see quotations of 3.10 areas on USD/PLN by the end of the week. On the other hand, when the situation will calm down, we should be slowly returning to variability in limits of 4.15 (but not sooner than next week).

Expected levels of PLN according to the EUR/USD rate:

Range EUR/USD 1.3550-1.3650 1.3650-1.3750 1.3450-1.3550
Range EUR/PLN 4.1600-4.2000 4.1600-4.2000 4.1600-4.2000
Range USD/PLN 3.0500-3.0900 3.0300-3.0700 3.0800-3.1200
Range CHF/PLN 3.4000-3.4400 3.4000-3.4400 3.4000-3.4400

Expected GBP/PLN levels according to the GBP/PLN rate:

Range GBP/USD 1.6450-1.6550 1.6550-1.6650 1.6350-1.6450
Range GBP/PLN 5.0500-5.0900 5.0700-5.1100 5.0300-5.0700

27 Feb 2014 11:49|Marcin Lipka

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without acknowledgement of the source is prohibited.

See also:

26 Feb 2014 11:43

Daily analysis 26.02.2014

25 Feb 2014 11:49

Daily analysis 25.02.2014

24 Feb 2014 11:44

Daily analysis 24.02.2014

21 Feb 2014 11:49

Daily analysis 21.02.2014

Attractive exchange rates of 27 currencies