01.06.2015 - The fall of the US GDP weakened the dollar
Currency trading and the euro. The price of euro continued moderate growth on Friday against the background of weak GDP growth data in the US in the first quarter of this year. Thus, the index fell by 0.7% against the previous estimate of 0.2% growth. Analysts had forecasted a decline of 0.8%. Consumer confidence in the US rose in May to 90.7, against an expected increase to 90.0. Support for the dollar became positive expectations regarding the country's economic growth by 2% in the current quarter. Today, it is worth paying attention to statistics on manufacturing PMI in the euro area (08:00 GMT) and in the US (14:00 GMT), as well as data on personal income and consumer spending in the US (12:30 GMT) and construction spending in America (14:00 GMT). Taking into account the effect of the quantitative easing program and the expectation of the Fed raising interest rates, we expect the fall of the euro in the near future and medium term.
Currency trading and the British pound. The price of the British pound is continuing to decline after on the last week was published data according to which GDP growth in the UK in Q1 of this year was 0.3%, which is 0.1% worse than analysts' forecasts. Despite the decline in US GDP in Q1 by 0.7% amid falling exports by 7.6% and a negative impact of the cold weather, experts note signs of accelerating the growth of US GDP in the second quarter. Today, the dynamics will depend on the statistics on the UK manufacturing PMI (08:30 GMT). Our medium-term view of the British pound remains negative and we are waiting for further price decline in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen resumed falling after a minor correction against the background of weak statistics on the US GDP. Data on manufacturing PMI was in Japan in line with experts' forecasts and the previous rate of 50.9. We recall that the value of the indicator above 50.0 points to expansion in the sector. Tomorrow we should pay attention to the data on wages and monetary base in the country. We expect a further fall in the Japanese yen in the medium term due to the difference in the monetary policy of the Bank of Japan and the Federal Reserve, which may begin to raise interest rates this year.
Currency trading and the Australian dollar. The price decline of the Australian dollar has stopped and it stabilized against the publication of data on the manufacturing PMI in China, which in May rise by 0.1 to 50.2. The comparable figure calculated by HSBC was also in line with expectations and totaled 49.2. The number of permits for new homes construction in Australia fell in April by 4.4%, against an expected decline of 1.7%. Investors did not rush to accumulate positions ahead of tomorrow's statement of the Reserve Bank of Australia on monetary policy, after which the fall is likely to accelerate, and the publication of data on balance of payments in the country. Our medium-term outlook remains negative and we recommend holding short positions.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar corrected upwards after a strong reduction of the previous days. Falling due to expectations of rates cut of the Reserve Bank of New Zealand to support the economy. Thus, the greatest negative impact on the country's currency has a decline in prices for dairy products. We recall that in 2013-2014 investment in the dairy sector has increased significantly, which has led to an increase in production, but the fall in prices on the world markets continues to negatively impact on the quotation of the New Zealand dollar over the past few quarters. We expect a further drop in prices but after a strong decline not exclude the beginning of the correction in the near future.