02.11.2015 - Prices have stabilized after the weakening of the US dollar
Currency trading and the euro. The price of euro showed growth at the end of the trading week amid strong statistics on core consumer price index in the euro area, which rose to 1.0%, that is 0.1% better than expected. This figure was the highest since January 2012. At the same time, the unemployment rate in the euro zone unexpectedly fell to 10.8% vs. expected 11.0%. The weakening of the US dollar was caused by the increase in income and consumer spending in the US by only 0.1%, which is twice worse than the forecast. Despite this, optimism about the dollar returned to investors after the release of a strong report on manufacturing PMI in Chicago, which rose to 56.2 in October, against 48.7 in September. Today, the dynamics will depend on the news on manufacturing PMI in Eurozone (09:00 GMT) and in the US (15:00 GMT). We maintain a medium-term negative outlook on the euro and predict the end of the current correction in the near future.
Currency trading and the British pound. The price of the British pound showed steady growth due to the weakening of the US dollar, but the main impulse was the closure of short positions. Despite the recent strong growth, further increase in prices is limited. Today, the mood of investors will depend on the news on the manufacturing PMI (09:30 GMT). We expect the ongoing growth to end and renewal of the negative dynamics in the near future. Our medium-term outlook also remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen has strengthened after the head of the Bank of Japan Haruhiko Kuroda about the preservation of the parameters of monetary policy and said about shifting forecasts of reaching the inflation target of 2.0% to the second half of 2016, due to low oil prices. Today it became known that Japanese manufacturing PMI in October fell by 0.1 to 52.5, which was 0.3 better than expected. Tomorrow is a day off in Japan and volatility will be low. We expect the resumption of the negative dynamics of the Japanese currency in the near future and its continuation in the medium term.
Currency trading and the Australian dollar. The price of the Australian dollar has stabilized after a slight growth. Statistics on China's manufacturing PMI Caixin, which rose to 48.3, vs. expexted 47.7 could not compensate the negative of the fall of Australian manufacturing PMI to 50.2 in October, which is 1.9 less than in September. Investors are waiting for tomorrow's statement of the Reserve Bank of Australia on monetary policy, in which we probably will not hear change in the rhetoric of the authorities and the price of the Australian dollar will fall to our forecasts. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar is consolidating after the end of last week, caused by technical factors. Statistics from China has a limited impact on investor sentiment lately. Tomorrow evening will be published important statistics on the labor market which will help to determine the direction of prices in the near future. It is worth noting that the local positive trend has switched to negative and now we have a good opportunity to open short positions. Our medium-term outlook remains negative.