01.09.2015 - The foreign exchange market is influenced by the fall on stock markets

Currency trading and the euro. The price of euro rose against the US dollar decline after the fall on the stock markets of the USA and Asia. Slight pressure on the US currency yesterday had the data on Chicago PMI, which fell by 0.3, to 54.4. It should be noted that the consumer price index in the euro area was 0.2% in August, despite the decline in energy prices. Today, the dynamics of trading will be affected by the data on the unemployment rate in the Eurozone (09:00 GMT), manufacturing PMI in the euro area (08:00 GMT) and the US (14:00 GMT). In addition, we should pay attention to the statistics on construction spending in the US (14:00 GMT). Our medium-term outlook remains negative.

EUR/USD Index in 2014

Currency trading and the British pound. The price of the British pound shows growth after the recent sharp fall. It is worth noting that in the UK yesterday was a day off. We recall that the experts overestimated the possible time to start raising interest rates due to the slowdown in the economy and weak inflation. At the moment, the more likely is the increase in interest rates of the Bank of England in the third quarter of 2016. Today, the trading will be affected by the news on the manufacturing PMI, and the lending market in the country (8:30 GMT). Our medium-term outlook remains negative, but in the near future the price may continue to consolidate around current levels.

Currency trading and the Japanese yen. The price of the Japanese yen strengthened due to increased demand for defensive assets due to the decrease on the stock markets. Investors prefer to transfer the assets to safer instruments amid concerns about the prospects for the Chinese stock market and the economy. In addition, support for the Japanese currency was the news about the growth of corporate profits by 23.8% in the second quarter against 0.4% in the first quarter. Traders are waiting for an important report on the US labor market at the end of the week. Our medium-term outlook remains negative for the yen, despite the potential for growth against a background of increased risks on the markets.

Currency trading and the Australian dollar. The price of the Australian dollar shows a slight increase against the background of saving interest rates of the Reserve Bank of Australia at the previous level of 2.0%. It is worth noting that the country's current account deficit rose to 19.0 billion compared to the forecast of 15.9 billion. Manufacturing PMI in Australia increased in August to 51.7 against 50.4 in the previous month. The comparable figure in China calculated by Caixin was 47.3, which is 0.1 better than expected. We note the reduction in the potential for further decline of the Australian currency, but see no reason for the change of the current negative trend to the positive.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued its decline yesterday after the publication of weak data on the index of confidence in the business community of the country, which fell to 29.1 in July versus 15.3 in June. The dynamics of trading is still dependent on external influences from China and Australia, which are the main trade partners of the country. Negative for the economy remain low prices for dairy products, which is the main export group. We expect a further fall in prices of the New Zealand dollar on expectations of monetary policy easing in the country and the growth of the trade deficit.

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