03.10.2014 - Investors are waiting for data on employment in the United States
Euro price corrected upward after comments from ECB President Mario Draghi on monetary policy of the ECB. Thus, interest rates remain at historically low levels, but Mr. Draghi said that in the last quarter of this year will be launched the buyout of backed securities. This program will last 2 years. According to experts, this program may be about 1 trillion euros. Today, trade dynamics will depend on the service PMI (08:00 GMT) and retail sales in the euro area (09:00 GMT), but special attention should be paid to data on the labor market in the United States (12:30 GMT). We maintain a medium-term negative outlook for the euro and expect the resumption of the fall in the near future.
The price of the British pound continued to decline due to the expectation of today's labor market data in the United States. Positive for the British currency was the data on business activity in the construction sector, whose index rose to 64.2 in September, despite the forecast of a decline to 63.7. Analysts noted the growth in the sector, which positively displays at the level of the country's employment. Let us recall that the government stimulate to buy houses, but considers the rise in prices a risk factor for the British economy. Today we should pay attention to the service PMI UK (08:30 GMT). Trading dynamics will depend on the data from the United States. We maintain our positive outlook for the medium-term, but assume drop of prices to the level of 1.6050.
Japanese yen resumed its decline after the price correction yesterday. The reasons for selling the Japanese yen are the tightening of monetary policy in the United States on the back of strong fundamentals of the world's largest economy and the opposite situation in Japan. Investors predict that the data on the labor market in America, which will be published today will be another reason for the strengthening dollar and hasten the moment of rising interest rates of the Fed. We maintain a medium-term negative outlook for the Japanese yen.
The price of the Australian dollar has stabilized around the level of 0.88 after yesterday's correction. The growth of quotations of the Australian currency in the medium term will be possible only within the correction due to the country's trade deficit, weak macroeconomic indicators and strengthening of dollar. The main risk to the economy is the slowdown in the industry in China, leading to a fall in prices of key export commodities. We maintain a medium-term negative outlook for the Australian dollar and recommend holding short positions.
The price of New Zealand dollar after yesterday's correction amid weakening of the dollar, reached 0.78, but was not able to continue to grow. Today, we expect the growth of price volatility in connection with the release of important data on unemployment in the United States. Investor sentiment deteriorated today due to weak data on non-manufacturing PMI in China, which is the main consumer of New Zealand's exports. The price of the national currency of the country will continue to decline while export prices are at a low level, and the current account deficit will continue to grow. We maintain a negative medium-term forecast and recommend holding short positions on the New Zealand dollar.