03.08.2016 - The US dollar continued its decline

Currency trading and the euro. Price of euro showed growth against the US dollar on a background of reducing the likelihood of the Fed tightening monetary policy in September, which was caused by the publication of weak statistics on the growth of US GDP in the second quarter. It is worth noting that investors have ignored the strong data on consumer spending in the US, which rose by 0.4% in June, against an expected increase of 0.3%. Today, it is worth paying attention to the index of business activity in the services sector (08:00 GMT) and retail sales in the Eurozone (09:00 GMT). In the United States will be published data on the labor market (12:15 GMT) and non-manufacturing PMI (14:00 GMT). Investors are waiting for the publication of an important labor market report in the US on Friday, which will affect the expectations on the timing of the Fed raising interest rates. Our medium-term outlook for the euro remains negative, despite the possible continuation of growth in the near future.

Currency trading and the British pound. The price of the British pound rose against the weakening US dollar. Minor support was provided by data from the UK construction PMI, which fell to 45.9 against the expected decline to 44.2. Today, it is worth paying attention to service PMI (08:30 GMT). Investors will not be in a hurry before tomorrow's decision of the Bank of England on the key interest rates and the quantitative easing program. Experts predict a decrease in interest rates by 0.25% to 0.50%, which will be negatively displayed on the price of the pound. Volatility will be increased in the coming days and the medium-term outlook remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen continued to strengthen against the US dollar. Support for the yen remains a smaller volume to stimulus for the economy than was previously expected. Incentive program was 28 trillion yen but ¾ of this amount is trust loans. According to our estimates, the potential for further strengthening is limited, and we will see a correction in the near future. Our medium-term outlook also remains negative on the background of the divergence in the parameters of the monetary policy of the Fed and the Bank of Japan.

Currency trading and the Australian dollar. The price of the Australian dollar showed strong growth, despite yesterday's decision of the RBA to cut interest rates by 0.25% to 1.50%. These steps have traditionally had a negative impact on the course of trading. Support for the Australian currency was the increase in iron ore prices. Tomorrow, on the dynamics of the Australian dollar will affect news on retail sales in Australia. Our medium-term outlook remains negative, and the decline may be resumed in the near future.

Currency trading and the New Zealand dollar. The price of New Zealand currency extended gains after the Australian dollar and the weakening US dollar. It is worth noting that the recent decision by the RBA to reduce interest rate increases the likelihood of a similar move by the Reserve Bank of New Zealand. Our medium-term outlook remains negative and we expect a soon resumption of the negative dynamics.

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