02.04.2015 - The US dollar has weakened slightly
The price of euro yesterday showed a slight increase, but it could not continue, and resumed a downward trend. Improvement in the Eurozone manufacturing PMI to 52.2, which is 0.3 better than expected, supported the euro. In addition, the same index in the US fell to 51.5 in March, that is 1.0 worse than analysts' expectations. The labor market data also disappointed investors. Today the dynamics of trading will depend on the statistics on factory orders (14:00 GMT) and the labor market in the US (12:30 GMT). Particular attention should be paid to the publication of minutes of the previous meeting by the ECB (11:30 GMT). Investors did not rush to build up positions before the long weekend and publication of statistics on unemployment in the US on Friday. We maintain our medium-term negative outlook for the euro because of the program of quantitative easing.
The price of the British pound showed growth on weak US data, which has led to the fall of the US dollar, as well as increasing manufacturing PMI in the UK which rose to 54.4 in March, against the previous figure of 54.0. Business activity supported the growth of export orders and increased consumer demand. Today the dynamics of trading will be affected by the data on the construction PMI (08:30 GMT) and US statistics. Investors will not open new positions before the long weekend and tomorrow's publication of data on the US labor market. We maintain our negative view on the British pound.
The price of the Japanese yen strengthened against the weakening of the US dollar after the publication of weak data on manufacturing activity and the labor market in the US, where the number of new jobs in the private sector increased by 189 thousand, compared with an expected 227 thousand. Traders expect tomorrow's publication of a report on the US labor market, which will lead to high volatility and in the case of improvement, falling of the yen will resume. Given the loose monetary policy of the Bank of Japan and the expectation of raising interest rates of the Fed, we maintain a medium-term negative outlook on the yen.
The price of the Australian dollar continues to decline after the publication of statistics on the US trade balance deficit which rose to 1.26 billion in February, against 1.00 billion in January. In addition, quotes are under the pressure of a drop in iron ore prices, as well as expectations of lower interest rates of the Reserve Bank of Australia to 2.0% next week. At the moment, we see no reason to change the negative trend of the Australian dollar and forecast a strong growth of volatility tomorrow after the publication of data on the US labor market.
The New Zealand dollar price decline stopped and it has stabilized, despite continued downward dynamics of the Australian dollar. The weakening of the US dollar has led to fixation of positions before the weekend. Report on the labor market, which will be published tomorrow may affect investors' expectations regarding the timing of rising interest rates and the Fed will lead to higher volatility. To continue reducing the price of the New Zealand dollar need new incentives. We recommend to wait for new signals for opening positions.