02.07.2014 - The Australian dollar fell sharply after the trade balance data
of euro yesterday after steady growth in the previous session started the
correction. Reason for the decline was the fixation of positions. Eurozone
unemployment rate remained unchanged at 11.6%. The manufacturing PMI of the
euro area fell by 0.1 to 51.8, while the same indicator in the U.S. showed a
decline to 55.3, with an expected growth to 55.6. Investors expect the ECB's
decision on interest rates and employment data in the U.S., which will be
released on Thursday. Today, the course of trading will depend on the
statistics on the final data on GDP growth in the euro area in the 1st quarter
(09:00 GMT), data on the labor market (12:15 GMT) and factory orders in the
U.S. (14:00 GMT ). We expect that in the medium term, the euro will fall to
levels of 1.35
The British pound yesterday continued a steady growth, which was caused by another growth of manufacturing PMI of the UK to 57.5, despite the forecast of decline to 56.7. Today we expect the release of data on the index of business activity in the UK construction sector (8:30 GMT), which is one of the key growth drivers of the UK economy and creates new jobs. The quotes of a pound today can correct downward, but we keep the medium-term positive outlook.
The Japanese yen continued to fall in price yesterday, despite the increase of manufacturing PMI in Japan in June to 51.5, which is 0.4 better than the previous figure. Growth of quotations continued today, despite the slowdown in the monetary base growth in June to 42.6% per annum, compared with an expected 48.3%. Today we can see a corrective movement, but in the medium term, we expect further devaluation of the yen, although the potential for such a movement is significantly reduced.
After the strong growth of the Australian dollar in recent days, the price of the national currency of Australia began to decline sharply after it has reached the level of 0.95. The reason for the decline was the data on the trade balance of the country in May, deficit of which has risen sharply to 1.91 billion, against the forecast of 0.16 billion. Tomorrow is expected to be published the data on the construction sector and retail sales in Australia. Also we should pay attention to the speech of the head of the Reserve Bank of Australia Glenn Stevens. We expect the price decline of the Australian currency in the medium term.
The New Zealand dollar has exhausted the growth potential and once again was unable to overcome the level of 0.88. Currency price began to decline following the Australian dollar. Further price movement will depend on the statistics on the labor market in the U.S., which will affect the U.S. dollar quotations. In case of further decline, we can see a massive profit-taking and a strong downward movement. We expect a decrease of the New Zealand dollar in the medium term.