01.10.2015 - The dollar strengthened on expectations of improvement in the US labor market
Currency trading and the euro. The price of euro showed a sharp decline yesterday on weak statistics from Germany and improvement on the labor market situation in the United States. In Germany, retail sales in August fell by 0.4%, against an expected growth of 0.2%, while the number of unemployed increased by 2 thousand compared with an expected decline of 5 thousand. At the same time statistics on the change in the number of jobs in the private sector from ADP showed US job growth by 200 thousand in September against the expected 192 thousand. Today, the dynamics of trading will be affected by the news on the manufacturing PMI in the Eurozone (08:00 GMT) and the US (14:00 GMT) and construction spending in the US (14:00 GMT). Our medium-term outlook remains negative and we are awaiting tomorrow's labor market report, which is likely to weaken the euro.
Currency trading and the British pound. The price of the British pound yesterday showed a rise in volatility following the publication of controversial statistics. Thus, business investment in the second quarter grew by only 1.6%, which is 1.3% less than the forecast, current account deficit amounted to 16.8 billion compared to the forecast of 22.2 billion, while GDP grew by 0.7% which coincided with the expectations. At the same time the strengthening of the US dollar has led to a further decline in prices. Today, the dynamics will depend on the statistics on the manufacturing PMI in the UK and minutes of meetings of the committee and of the financial policy of the Bank of England (08:30 GMT). The price will probably retain the negative momentum in the near future and in the medium term.
Currency trading and the Japanese yen. The price of the Japanese yen declines against the strengthening of the US dollar, as well as in connection with the publication of weak statistics in Japan. Thus, the index of business activity in the largest producers in Japan Tankan fell in the 3rd quarter to 12, against 15 in the previous period. The manufacturing PMI in September rose by 0.1 to 51.0. Improving the same indicator in China has reduced the demand for defensive assets. We look forward to tomorrow's statistics on the US labor market and expect increased price volatility. In the medium term, the yen will likely continue to decline.
Currency trading and the Australian dollar. The price of the Australian dollar rose today despite the strengthening of the US dollar in relation to the publication of the more confident statistics on the industry in China. Thus, the manufacturing PMI at the main trading partner of Australia rose in September to 49.8, which is 0.1 better than expected, but still indicates a decline in the sector. The comparable figure in Australia rose to 52.1, which is 0.4 more than in August. Tomorrow we should pay attention to the statistics on retail sales in the country. Our medium-term outlook remains negative, despite the strengthening of the current price.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued its upward trend due to the strengthening of the Australian dollar and the positive statistics from China. After strong growth in the near future we will probably see a price correction. At the moment, there is no reason to talk about the change of the negative trend to the positive and our medium-term outlook remains negative.