02.12.2014 - USD has corrected yesterday
The price of euro yesterday showed an increase on the background of correction of the US dollar. Quotes rose to important level of 1.25, despite the weak data on the Eurozone manufacturing PMI, which fell by 0.3 in November, to 50.1. The comparable figure in the United States declined by 0.3 to 58.7. Analysts had expected a decline to 57.9. Today the course of trading may be affected by the data on the number of unemployed in Spain (08:00 GMT), producer price index of the Eurozone in October (10:00 GMT) and data on construction spending in the US (15:00 GMT). At 13:30 GMT, Fed Chairman Janet Yellen will make a speech. Today quotes of the euro will probably fall. We maintain our medium-term negative outlook and recommend holding short positions on the euro.
The British pound showed the strong growth after hitting minimum levels of this year. The reason for the price increase was the data on the growth of the UK manufacturing PMI, which rose to 53.5that is 0.4 better than analysts' forecasts. At the same time, it is worth noting the fall of the US dollar. At the moment, the growth of the pound has stopped and we can see renewed downward momentum today. The course of trading will be affected by the data on the construction PMI of the country (09:30 GMT). We expect price cut today and do not see a signal to change the negative trend in the next month.
The yen strengthened after reaching the seven-year lows. The increase in demand for currency was the weakening of the US dollar against the backdrop of weak sales data in the "Black Friday", which decreased by 11%. It is also worth noting the growth in demand for defensive assets in connection with the downgrade of Japanese rating by Moody's from "Aa3" to "A1". It is worth mentioning that this does not affect the rating of liabilities in foreign currency and deposits. The reason for this step was the uncertainty regarding the time required to reach the goals for economic growth and inflation in the country. We expect that the drop in prices of the yen will resume in the near future and maintain the medium-term negative outlook.
The Australian dollar rose yesterday and today continues to grow after the statement of the Reserve Bank of Australia. Thus, the statement noted that the fundamental value of the Australian dollar remains below current levels. Despite the negative effect of the problems in the construction sector in China, investors are positive about the impact of stimulus measures of the Chinese government. Tomorrow we should pay special attention to Australia's GDP index for the 3rd quarter. We expect price decline over the medium term and recommend holding short positions. Our medium term market forecast also remains negative.
The New Zealand dollar strengthened following the major currencies due to the correction of the US dollar. Investors still negatively estimate weak data on industry in China, but this factor is already included in the prices. Tomorrow is expected to be published data on GDP growth in Australia, which is an important trading partner for New Zealand. Despite the recent growth, we expect a drop in prices in the near future and maintain the medium-term negative outlook.