01.08.2016 - The dollar fell against the background of weak statistics on US GDP growth

Currency trading and the euro. The price of euro showed steady growth against the US dollar after in the US was published weak data on GDP growth, which according to preliminary estimates, increased by 1.2% in the second quarter against the forecast of 2.6%. The reason for the weak growth was the decline in investment. This fact significantly reduced the likelihood of the Fed raising interest rates this year. Today, the dynamics will affect data on the manufacturing PMI in the US (14:00 GMT) and the euro area (08:00 GMT), as well as construction spending in the US (14:00 GMT). Despite the current strengthening of the euro, its potential is limited and our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound strengthened against the background of the fall of the US dollar, after the release of weak statistics on the growth of US GDP. Today, the dynamics of trading will affect the news on the UK manufacturing PMI (08:30 GMT). The growth potential in the near future is limited against the backdrop of the negative impact of the expected exit of Great Britain from the EU, which will slow down the growth of the British economy, and may cause a decrease in the interest rates of the Bank of England. Our medium-term outlook remains negative for the pound.

Currency trading and the Japanese yen. Price of Japanese yen strengthened after the statement of the Bank of Japan on monetary policy and on the background of reducing the likelihood of the Fed raising interest rates after the release of a weak report on the growth of the US economy. It is worth noting that the Bank of Japan announced the expansion of dollar lending program to 24 billion dollars against 12 billion dollars previously, and the volume of purchases of ETF increased from 3.3 trillion yen to 6.0 trillion yen. These measures were weaker than expected on the market. Our medium-term outlook remains negative for the yen, but the current growth may continue in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar showed growth against the background of the weakening US dollar, as well as the publication of statistics on the manufacturing PMI in Australia, which rose to 56.4 in July versus 51.8 in June. Sales of new homes in Australia increased by 8.2%. Investors are waiting for tomorrow's publication of the decision of the Reserve Bank of Australia, the rhetoric of which can be dovish due to low inflation in the country. Our medium-term outlook for the Australian dollar is negative, but the current upward momentum may continue today.

Currency trading and the New Zealand dollar. Price of the New Zealand Dollar was higher due to lower US dollar and the positive statistics from Australia, which is a key trading partner for New Zealand. In addition, the manufacturing PMI in China by Caixin rose to 50.6 vs. 48.8 expected. In the coming days, the dynamics of trading will affect the news from the US and Australia. Our medium-term outlook remains negative, despite the possible increase in the near future.

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