02.03.2015 - The People's Bank of China has lowered interest rates
The price of euro fell after the publication of data on US GDP growth, which was 2.2% in Q4, which is 0.1% better than the forecast, but 0.4% less than the previous estimate of investors. At the same time, the index of US consumer confidence rose to 95.4, against expected 94.2. Today, the course of trading will be affected by the data on the consumer price index, unemployment in the euro area (10:00 GMT), as well as data on manufacturing PMI in the Eurozone (09:00 GMT) and the US (15:00 GMT). We expect a further decline in the euro in connection with the launch of quantitative easing in the euro area and strong macroeconomic data from the United States.
The price of the British pound continued to decline after strong growth last week. The reason for such dynamics was the statistics from the US, which led to the strengthening of the dollar. Today the dynamics of trading will depend on the news on the growth in housing prices in the country (07:00 GMT), the manufacturing PMI and lending in the UK (09:30 GMT). The euro continues to negatively impact on the British pound, but in spite of this, we expect upside in the near future.
The price of the Japanese yen continued to decline after data on US GDP growth, which has led to the strengthening of the dollar. Fall today was limited by positive statistics on manufacturing PMI in Japan, which rose to 51.6, which is 0.1 better than the previous record and the expectations of experts. Given the decline in concerns about a Greek exit from the euro area in the near future the demand for defensive assets fell, but the drop in interest rates by the People's Bank of China, shows the weakness of the second largest economy in the world and can lead to another wave of demand for the yen. We maintain our medium-term negative outlook on the Japanese currency.
The price of the Australian dollar continues to show a negative trend against the dollar strengthening, as well as in connection with the publication of weak statistics on the country's manufacturing PMI, which fell to 45.4 in February against 49.0 in the previous period. The same indicator in China rose to 50.7, which is 0.6 better than expected. It is worth noting that the People's Bank of China lowered interest rates by 0.25% to 2.5% for deposits and 5.35% on loans, which shows the weakness of economic growth in China, which is the main buyer of Australian products. Tomorrow is expected the increase of volatility because of the statement the RBA and the publication of statistics on the balance of payments. Our medium-term outlook for the Australian dollar remains negative and we recommend holding short positions.
The price of the New Zealand dollar declines amid growing concerns about the growth of the Chinese economy, which is caused by a decrease in interest rates in the country. On the one hand this step of Chinese authorities have a positive impact on the economy, but on the other hand, it shows the weakness of growth. In addition, the dynamics of trading is affected by the fall of the Australian dollar. We forecast a drop in the near future, but our medium-term outlook is positive.