01.02.2016 - The decision of the Bank of Japan has led to the strengthening of the US dollar against the yen

Currency trading and the euro. The price of euro fell on Friday amid a stronger US dollar, which was caused by the unexpected decision of the Bank of Japan on monetary policy. Thus, the Japanese regulator decided to reduce interest rates from the the level of 0.10% to -0.10%. As a result, demand for dollar assets rose due to a sharp fall in the price of the yen. It is worth noting that on Friday was published data on US GDP growth in Q4, according to which the country's economy in the last three months of 2015 grew by only 0.7%, which is 0.1% worse than forecast and significantly worse than growth by 2,0% in the 3rd quarter. This fact reduces the chance of the Fed raising interest rates in March, but the outlook for the US economy remain positive. Today, the dynamics of trading will affect data on the manufacturing PMI in the Eurozone (09:00 GMT) and the US (15:00 GMT), as well as statistics on personal income and consumer spending (13:30 GMT) and construction spending in the US (15:00 GMT). Particular attention should be paid to the speech of the Deputy Chairman of the Fed Stanley Fischer (18:00 GMT). We continue to maintain a medium-term negative outlook for the euro, but today we can see the correction of price.

EUR and USD Performance

Currency trading and the British pound. The price of the British pound showed a strong decline against the dollar strengthening, as well as in connection with the general negative sentiment on the UK currency due to concerns about the effects of country’s exit from the Eurozone, in the case of such a decision on a referendum, which according to experts could go in autumn. Today, the dynamics of the pound will affect data on the manufacturing PMI and lending in the country (9:30 GMT). Our medium-term outlook remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen fell heavily after on Friday on the Bank of Japan 5 to 4 votes were given for lowering interest rates to 0.10%, against the previous level of 0.10%. The annual volume of purchases of assets was left at 80 trillion yen a year. Japanese regulator also noted the willingness of further easing of monetary policy and reaching the inflation target of 2.0%, which is expected in the first half of 2017. Today's publication of data on manufacturing PMI in Japan, which fell by 0.1, to 52.3, had a strong influence on the course of trading. The decline in demand for defensive assets also puts pressure on the price of the yen. Our medium-term outlook for the Japanese currency is pessimistic.

Currency trading and the Australian dollar. The price of the Australian dollar fell after rising during the previous days, which was caused by higher oil prices. Today, volatility is reduced. In China has been published official data on manufacturing PMI, according to which the index fell to 49.4 in January, against the forecast of 49.6. A similar indicator in Australia decreased by 0.4, to 51.5. Tomorrow will be published decision of the Reserve Bank of Australia on monetary policy, but we do not expect changes in interest rates. Our medium-term outlook for the Australian dollar remains negative.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a moderate decline amid stronger US dollar after the decision of the Bank of Japan to ease monetary policy settings. Investors according to our forecasts will not rush to accumulate positions ahead of the publication of data on the labor market on Tuesday night and the speech of the head of the RBNZ. Our medium-term outlook remains negative and we expect a continuation of the negative dynamics of prices.

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