03.06.2015 - Hopes on the Greek crisis supported the price of euro
Currency trading and the euro. The price of euro yesterday showed strong growth amid speculation on a new proposal for Greece by creditors. Greece, the European Commission, the ECB and the IMF have agreed on the reforms necessary for the release of the macro financial assistance by 7.5 billion euros, which will allow the country to avoid default. The consumer price index in the euro area has shown a steady growth to 0.3% in May against 0.0% in April. Today, the central event of the day will be a press conference by ECB President Mario Draghi after the ECB meeting (12:30 GMT), which traditionally leads to a decline in the euro. In addition, we should pay attention to the statistics on retail sales (09:00 GMT), and the service PMI of the euro area (08:00 GMT). The data on the US trade balance (12:30 GMT) and the publication of Beige Book (18:00 GMT) could also affect the mood of investors. We maintain a medium-term negative outlook for the euro and recommend to search for an entry point to open short positions.
Currency trading and the British pound. The price of the British pound yesterday showed strong growth following the euro, which was associated with an increase in positive expectations for the solution of the Greek crisis. In addition, a strong driver for growth was the news on the construction PMI which rose to 55.9 vs. expected 55.1, and growth in the number of permits for mortgage lending to 68 thousand in April, which is 6 more than in March. Today, it is worth paying attention to statistics on the UK service PMI (08:30 GMT). Our medium-term outlook for the British pound remains negative and we expect a resumption of the downward movement of prices in the near future.
Currency trading and the Japanese yen. The price showed strengthening of the Japanese yen against the weakening of the US dollar against other world currencies. It should be noted that earlier the quotes of the pair yen/dollar reached the target level and in the near future quotations may correct further after the strong price movement. Despite the recent decline of the Japanese currency, we maintain a medium-term negative outlook due to the expectation of rising interest rates by the US Fed and the soft monetary policy the Bank of Japan.
Currency trading and the Australian dollar. The price of the Australian dollar has changed negative trend to positive. Beginning of growth was due to a correction after a strong fall and the weakening of the US dollar, but today was released the statistics on the growth of GDP, which supported the bulls. Thus the, Australia's economy grew by 0.9%, which is 0.2% better than the forecasts of analysts and 0.4% better than the previous period. For the year, GDP grew by 2.3%, which is 0.2% better than analysts' expectations. Rising of prices may continue in the near future, but our medium-term negative outlook remains unchanged.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar corrected upwards amid a weaker US dollar, as well as the growth of the Australian currency. Support for the bulls was the positive data on GDP growth in Australia, whose economy is closely linked with the New Zealand’s. Despite the positive momentum, our forecast for the New Zealand dollar in the coming months remains negative due to the tendency of the Reserve Bank of New Zealand to reduce interest rates and unfavorable pricing environment for export products.