01.07.2014 - The British pound continues to grow steadily
of euro yesterday showed confident growth on a background of the stability of
the CPI in the euro area, which remained at 0.5%. At the same time, the core
consumer price index in June showed an increase of 0.1% to 0.8%. Statistics
from the U.S. was inconsistent. Thus, the Chicago manufacturing PMI fell to
62.6, against the forecast of 63.2, and pending sales on the secondary real
estate market in May rose by 6.1% against the expected 1.4%, which indicates an
increase in activity of the U.S. housing market. Today, the focus will be on
data on unemployment in the Eurozone (09:00 GMT) and the speech of U.S.
Minister of Finance Jack Lew (12:00 GMT). The central events of the week will
be the ECB's decision on interest rates and data on the U.S. labor market in
June (Thursday). We expect the decline of the euro in the medium term, and
The British pound rose sharply yesterday within an uptrend, which is caused by expectations of higher interest rates of the Bank of England. The head of the Bank of England said that the interest rate may be increased to 2.5% in 2017. Demand for the pound is also supported by strong economic indicators in the country. Today, the course of trading may be affected by the data on the manufacturing PMI of the country in June (8:30 GMT). We maintain our positive view on the British pound in the medium term, but today we can see a minor price correction.
Japanese Yen started to cheapen due to lower Tankan manufacturing index in the second quarter to 12, which is 4 less than the forecast. At the same time the index of business activity in the manufacturing sector in June rose by 0.4 percent to 51.5. In the near future in Japan is not expected the release of important economic data and price movement will depend on the labor market data from the United States. We expect a further decline of the Japanese yen in the medium term.
The Australian dollar strengthened today on positive indicators of China's industry. Thus, the manufacturing PMI rose to 51.0 in June which is 0.2 better than the previous figure. At the same time, investors expect the Reserve Bank of Australia's statement on monetary policy (04:30 GMT), which can lead to a significant increase in volatility today. Tomorrow we should pay attention to the trade balance of Australia. We expect a decrease of the Australian dollar in the medium term.
The New Zealand dollar also strengthened like the Australian due to positive from China, which is the main trading partner for these two countries. Further growth of a pair is limited due to the weakness of the bulls and the promise of the Reserve Bank of New Zealand to deal with the high rate of the national currency, which considering the fall in export prices can hurt economic growth in the country. We expect that growth will not last long and in the medium term the price will keep trading around current levels.