01.09.2014 - Euro continues to fall
The price of euro reached minimum values since the beginning of the year against the dollar strengthening and the deterioration of the situation in Ukraine. Thus, the demand for the dollar has traditionally grown in the end of the month, and statistics from the United States on the growth of consumer confidence index also led to a strengthening of the dollar. It should be noted that sanctions against Russia will also have a negative impact on the economy of the euro area and the euro price. Today in the United States is a holiday and focus will be on data on GDP growth in Germany in the second quarter (06:00 GMT) and Eurozone manufacturing PMI in August (08:00 GMT). The main event of the week will be the ECB meeting after which Mario Draghi may announce new measures against low inflation. We maintain our negative outlook for the medium-term with the target level of about 1.28.
The price of the British pound stabilized around the level of 1.66, and continues to consolidate at this level. On Friday, the price of the pound was supported by data on the index of house prices in the UK that increased by 0.8%, compared with an expected growth of 0.1%. Data from the United States on consumer confidence have put pressure on the pound, but could not lead to its downfall. Today, trade dynamics will depend on the data on the manufacturing PMI and mortgage lending (08:30 GMT). We forecast growth of quotations of the pound in the near future and maintain a medium-term positive outlook. Growth may begin after the referendum on Scottish independence on 18 September.
The Japanese yen continued devaluation against the dollar strengthening. Also today was published statistics on the manufacturing PMI of Japan which fell by 0.2 to 52.2. Despite this, the deterioration of the situation in Ukraine where have declared invasion of Russian troops, continues to support the demand for defensive assets, as the yen. Today in the United States is a holiday and volatility will be low, but we recommend to follow the situation in Ukraine. Tomorrow the course of trading can be affected by the data on the monetary base in Japan. Our medium-term outlook for the yen remains negative.
The price of the Australian dollar, after declining in the last days of the last week has started growing again today, despite the negative data on the manufacturing PMI of Australia which fell to 47.3 in August, against 50.7 in July, and the similar indicator in China, which fell to 51.1, against the forecast of 51.2. Investors are in no hurry to accumulate positions before tomorrow's statement of the Reserve Bank of Australia on monetary policy in the country, which traditionally will point to significant potential for the fall of the Australian dollar which may cause a new wave of sales. We maintain a medium-term negative outlook for the Australian dollar in the medium term.
The price of the New Zealand dollar after stabilization last week began to decline again due to weak performance on the manufacturing PMI in China, which is a major trading partner of the country. The growing trade deficit continues to put pressure on quotations of the national currency. Low prices for dairy products, which is the main export commodity of the country and the dependence on the Chinese economy the growth rate of which is reduced negatively affect the price of the NZ dollar. We expect the price decline in the near future, but the potential of falling in the medium term is relatively small.