02.06.2015 - Construction spending in the US rose to the highest level in more than 6 years
Currency trading and the euro. The price of euro yesterday continued its downward movement against the publication of statistics on the euro area manufacturing PMI, which fell by 0.1, to 52.2 in May. At the same time in the US manufacturing PMI rose to 52.8, which was 0.9 better than analysts' expectations. It is worth noting increasing consumer income by 0.4% in April and increased construction costs in the US by 2.2%, against an expected increase of 0.7%. Today, the course of trading will be affected by the data on the change in the number of unemployed in Germany (7:55 GMT), the consumer price index in the euro area (09:00 GMT) and the volume of factory orders in the US (14:00 GMT). Given the risks associated with the possible default of Greece in the event of the failure of negotiations to restructure the debt until June 19, the program of quantitative easing in the euro area and the strengthening of the dollar, we maintain a medium-term negative outlook on the euro and recommend holding short positions.
Currency trading and the British pound. The price of the British pound continued its decline against the strengthening of the US dollar, as well as in connection with the publication of weaker than expected manufacturing PMI data in the UK in May. Thus, the index rose slightly by 0.2 to 52.0. Analysts expected the growth rate to 52.7. Today, the course of trading will be affected by the data on the number of construction permits and mortgage approvals (8:30 GMT). According to our estimates, quotes the British pound will continue to fall against the strengthening of the US dollar, the fall of the euro and the slowdown in the British economy. We maintain a medium-term negative outlook.
Currency trading and the Japanese yen. The price of the Japanese yen continued to fall against the backdrop of neutral statistics on the country's manufacturing PMI, which remained at 50.9, in line with analysts' forecasts. On the other hand, the growth of construction costs in the United States to its highest level in more than six years has led to the decline of the yen against the US dollar. Thus, the index in April rose by 2.2% against the expected 0.7%. The monetary base in Japan accelerated growth in May to 35.6% compared to the same period last year, that was 0.4% down compared to April. Today we can see a price correction after a strong fall and reaching the target level. Our medium-term outlook for the Japanese currency is a negative.
Currency trading and the Australian dollar. The price of the Australian dollar showed growth after a strong decline in the previous trading week. Investors were supported by the statistics on the balance of payments deficit in the first quarter, which totaled 10.7 billion, that is 0.2 billion better than analysts' expectations. In addition, the Reserve Bank of Australia issued a statement according to which the interest rate remains at 2.0%, but according to regulator, the Australian dollar will continue to decline due to low commodity prices, which have a negative impact on the Australian dollar. Tomorrow will be published important statistics for GDP growth in Australia for the 1st quarter. Our medium-term outlook remains negative, but the fall may continue.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a slight increase within the correction, as well as on a stronger Australian dollar. Quotations of the New Zealand currency remains under pressure of low prices for the main export product - milk powder and other dairy products. The strengthening of the US dollar, is another key factor that leads to lower prices of the New Zealand dollar. We expect a further fall in prices in the near future.