03.09.2014 - Australia's GDP grew more than expected
The price volatility of the euro yesterday was quite low. Growth of the price was constrained by the negative macro data on producer price index, which fell by 0.1% in July, against the growth of 0.2% in June. The main reason for the decline was the drop in energy prices. At the same time, the manufacturing PMI in the United States rose to 59.0 in August, against the expected 57.0, and construction spending rose by 1.8%, which is 2 times more than the forecast. Today the course of trading will be affected by the data on services PMI (08:00 GMT) and retail sales (09:00 GMT), the euro area, as well as statistics on factory orders of the United States (14:00 GMT) and the publication of the Beige Book (18: 00 GMT). Investors expect the ECB decision on monetary policy tomorrow, and data on the labor market in the United States tomorrow and on Friday. Our medium-term outlook remains negative.
The price of the British pound has fallen dramatically in anticipation of a referendum on the Scottish independence. So, yesterday it was reported that the number of people who oppose independence greatly reduced. The referendum held on September 18 and until then we should not expect the growth of quotations of the pound, but after the referendum, whatever the outcome, we expect the growth of the British currency. Construction PMI in the UK rose to 64.0, versus the expected decline to 61.5. Growth in the construction sector has led to an increase in the number of jobs in the country. Today we should pay attention to the service PMI (08:30 GMT). Decline of the pound may continue, but after a referendum in Scotland quotations probably will start growing again.
The price of the Japanese yen continued to decline and almost reached the target levels amid expectations of pension reforms by the new minister from the ruling Liberal Democratic Party of Japan, which is the main candidate for the post of Minister of Health. Tomorrow will be published a statement by the Bank of Japan. A strong influence on the dynamics of prices will also have statistics on the labor market in the United States, which may lead to another decline of the yen against the dollar. We maintain a medium-term negative outlook for the yen.
The price volatility of the Australian dollar raised much after the release of statistics on Australia's GDP, which grew in the second quarter by 0.5% that is 0.1% better than expected, but 0.6% below the previous level. At the same time, the head of the Reserve Bank of Australia announced about the problems of the labor market in the country and that financing conditions remain soft. Tomorrow the price dynamics will depend on the statistics on the trade balance and retail sales in the country. We forecast a fall in price in the medium term, but assume the upward correction in the near future.
The price of the New Zealand dollar continued to decline after the publication of weak data on the country's trade balance. Quotations of currency continue to be under the pressure of slowing growth in China and a fall in prices for dairy products, which is the main export commodity of the country. In addition, the strengthening of the dollar is also a strong factor that leads to a drop in prices of the New Zealand dollar. We expect continued descending movement in the short term.