03.06.2014 - Traders are waiting for data on unemployment and inflation in the Eurozone
The price of euro continues to consolidate around the level of 1.36. Reason for the decline yesterday was the data on reduction the manufacturing PMI of the euro area by 0.3 to 52.2. Similar indicator in the United States increased by 0.5 to 55.4, and was worse than analysts' forecasts of 55.7. Growth in construction spending in the U.S. was 0.2% in April, compared with an expected growth of 0.8%, could not change the course of trading. Today the course of trading will be affected by data on consumer prices and unemployment in the Eurozone (09:00 GMT). Investors are negative about the outlook for growth of the euro in the medium term due to the ECB meeting on June 5 at which can vote for the introduction of new measures to fight the low inflation, which will lead to a further decline of the euro. We keep medium and long term negative outlook for the euro.
The price of the British pound remained almost unchanged throughout yesterday's trading session. Growth of quotations was limited due to weak data on the manufacturing PMI of the country, which fell by 0.3 to 57.0, compared with an expected 57.1. The number of mortgage approvals in April fell by 4 thousand to 63 thousand. Today we should pay attention to data on house price index (06:00 GMT) and the index of business activity in the UK construction sector (8:30 GMT). We maintain a long-term positive outlook for the pound, but the decline of the euro may have a negative impact on the dynamics of the British currency in the medium term.
The Japanese yen continued to decline despite the weak data in the United States. In addition, data on the monetary base in Japan in May showed a decline to 46.6% per annum with an expected growth to 51.2%. This figure may indicate the possibility of further enhancing measures to increase the monetary base by the BOJ. We look forward to continuing the upward movement of the USD/JPY with the objectives at 102.70 and 104.00 and keep medium and long term positive outlook.
The Australian dollar decline has stopped on a background of controversial statistics. Thus, the trade deficit narrowed to 5.7 billion, compared with an expected 7.1 billion, retail sales in April rose by 0.2% vs. the forecast of 0.3%. The mood of traders today can be affected by the statement of the Reserve Bank of Australia. The course of trading also will be influenced by the data on Australian GDP, which will be released tomorrow. We maintain a medium-term negative outlook for the Australian dollar, but do not exclude an upward correction in the near future.
The price of the New Zealand dollar continued to decline on weak data from China, which is the largest importer for New Zealand. Thus, the manufacturing PMI in China, was revised to 49.4, compared with an expected 49.7, but the non-manufacturing PMI in China increased to 55.5 against 54.8. Fall of the New Zealand dollar should stop in the medium term, but growth is limited by the policy of the Reserve Bank of New Zealand aimed at lowering the national currency during a fall in export prices. We look forward to continuing the downward movement in the medium term.