01.04.2015 - Statistics on manufacturing activity in China has slightly improved
The price of euro yesterday continued to decline, despite the positive data on reduction of the number of unemployed in Germany by 15 thousand in March, that is 5 thousand better than expected. Falling consumer price index was 0.1%, which is 0.2% better than analysts' expectations. It is worth noting that the unemployment rate in the euro area was 11.3%, compared with an expected drop to 11.2%. On the other hand, short-term strengthening of the dollar was due to the publication of news on the growth of house prices in 20 major US cities by 4.6%, indicating that the improvement in the housing market of the country. Consumer confidence unexpectedly rose in March to 101.3, against the expected drop to 96.6. Today the dynamics of trading will depend on the statistics of the Eurozone manufacturing PMI (08:00 GMT) and the US (14:00 GMT), as well as construction spending in the US (14:00 GMT). Our medium-term outlook for the euro remains negative and we recommend holding short positions.
Statistics for GDP growth in the United Kingdom in the 4th quarter of last year could lead to an increase in the price of the British pound. Thus, the index rose by 0.6% in Q4, versus the previous estimate of a 0.5% increase. At the same time, in 2014, the economy grew by 2.8%, which is 0.2% better than the previous estimate. This growth was the highest since 2006. Balance of payments deficit of the country was 25.3 billion in the 4th quarter, against the expected 21.2 billion. Today, the dynamics of prices will depend on the data on the manufacturing PMI in the UK (08:30 GMT). We recall that the negative for the British currency is the euro's fall, related program of quantitative easing in the Eurozone. Our medium-term view on the pound remains negative.
The price of the Japanese yen continued to strengthen against the weakening US dollar, as well as in connection with weak statistics on the country's manufacturing PMI, which fell in March to 50.3, which is 0.1 worse than the previous figure. It is worth noting that the strengthening of the yen could intensify in the case of the growth of speculation regarding the problems of restructuring Greek debt and the deterioration of the situation in Yemen and Ukraine. The central event of the week will be the publication of data on the US labor market, improvement of which will be the basis for the strengthening of the dollar and falling of the yen. We keep the medium-term negative outlook on the Japanese currency.
Australian dollar price corrected upwards after the sharp fall in the previous days on the background of technical factors, as well as in connection with the publication of data on manufacturing PMI in Australia, which rose to 46.3 in March from 45.4 in February. The same indicator in China, calculated by HSBC rose to 49.6, which is 0.3 better than expected, but below 50.0, overcoming of which indicates growth in the sector. Tomorrow in Australia is the day off, but volatility will be increased in connection with the release of statistics on the country's trade balance for February, which is likely to disappoint investors and lead to a drop in the Australian dollar. Our medium-term negative outlook and recommendation to hold short positions remain unchanged.
The price of the New Zealand dollar continues to decline gradually, but the rate of decline has slowed down against the rising price correction of the Australian dollar and the improvement in the manufacturing sector in China and Australia. Tomorrow in New Zealand will be a day off and volatility will decrease. We expect a continuation of the downward movement of the New Zealand currency in the coming weeks, but before the end of the week, we can see an upward correction of price.