03.12.2015 - The ECB's decision may lead to the fall of the euro
Currency trading and the euro. The price of euro corrected yesterday, but was unable to continue its upward movement against the background of hawkish statements by Fed officials Lockhart and Yellen, who pointed to the steady growth and the likely rise in interest rates in the case of positive statistics in the country in the next two weeks. At the same time, the consumer price index in the euro area rose by 0.1% in November against the forecast of growth by 0.2%. Today will be a very important event - the ECB will decide on the parameters of monetary policy in the monetary union (12:45 GMT). Thus, the quantitative easing program may be extended to 10-20 billion euros a month against the current 60 billion. Interest rates on deposits can also be cut by 0.10-0.25% from the current level of -0.20%. Also today, will be held a press conference of the ECB President Mario Draghi (13:30 GMT). The volatility is high. We maintain a medium-term negative outlook for the euro.
Currency trading and the British pound. The price of the British pound fell yesterday and updated seven-month low against the strengthening US dollar and weak statistics on the construction PMI in the UK, which unexpectedly fell to 55.3, against the forecast of 58.4. It is worth mentioning that the construction sector is one of the drivers of economic growth and one of the country's largest employers. Today, the course of trading may be influenced by the news on service PMI in the country, but the main impact on investors will have news on the decision of the ECB on monetary policy. We expect increased volatility and maintain the medium-term negative outlook.
Currency trading and the Japanese yen. The price of the Japanese yen decline today after the strengthening of the US dollar before the statement of the ECB on monetary policy and the important tomorrow's publication of a report on the US labor market, which will have a key influence on the Fed's decision with respect to raising interest rates. The probable increase in the US dollar, together with the loose monetary policy of the Bank of Japan will continue to be the main reasons for the fall of the yen in the coming months.
Currency trading and the Australian dollar. The price of the Australian dollar failed to extend gains after yesterday's publication of the report on GDP growth by 0.9%, which was 0.2% better than expected. In addition to the negative impact of the growth of the US dollar, the Australian currency quotes were pulled down by the news on the growth of the country's trade deficit to 3.31 billion in October, against 2.40 billion in September. Exports decreased by 3%, while imports remained unchanged. At the same time, new home sales in the country fell by 3.0%. The volatility in the coming days will be associated with the movement of the US dollar. We maintain a negative medium-term outlook for the Australian dollar.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar is rising today after the recent correction, despite the strengthening of the US dollar and weak data from Australia. It is worth noting that prices for dairy products, improved investor sentiment. In the coming days the probability of strong price movements is due to the increasing volatility of the US dollar. According to our estimates, there is a significant likelihood of resumption of the negative dynamics. Our medium-term outlook remains negative.