01.07.2014 - The British pound continues to grow steadily

The price 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 tod

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.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.