04.01.2016 - The yen rose against the background of geopolitical tensions in the Middle East
Currency trading and the euro. The price of euro earlier this week is showing a correction after the strong decline in the end of last month. It is worth noting that investors are returning to the market after the holiday period during which the trading volume was low, but volatility has increased. The central event of the week will be the publication of minutes of the previous Fed meeting at which it was decided to increase interest rates in the United States and the release of a report on the US labor market in December. Today, we need to pay attention to the statistics on the manufacturing PMI in the Eurozone (09:00 GMT) and the US (15:00 GMT), as well as construction spending in the US in November (15:00 GMT). Our medium-term outlook for the euro is negative and we are waiting for a decline to 1.07 and 1.05 in January and February.
Currency trading and the British pound. The price of the British pound fell against the background of forecasts of investment companies regarding the negative impact of future speculation about a possible exit of the UK from the Eurozone after the referendum, which will take place this year or the next one. As a result, quotes of the British currency against the dollar may fall to the level of 1.40 this year. Today, the course of trading will be affected by the data on the manufacturing PMI in the UK (09:30 GMT). Our medium-term outlook for the pound remains negative in relation to the expectation of a stronger US dollar.
Currency trading and the Japanese yen. The price of the Japanese yen continued to strengthen today due to a number of factors. So, the demand for protective assets increased due to the breaking of diplomatic relations between Saudi Arabia and Iran, after the attack on the Saudi embassy in Tehran. In addition, the weak data from China on manufacturing PMI, which fell to 48.2 in December, is fueling fears about the prospects for economic growth in the region. The comparable figure in Japan was the highest in 20 months and totaled 52.6, which is 0.1 better than expected and the previous value. Our medium-term outlook for the yen remains negative and we expect the resumption of the fall in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar today shows a strong decline on weak statistics from China, where manufacturing PMI was 48.2 against 48.6 previously. The comparable figure in Australia in December fell to 51.9 against 52.5. Rising oil prices could not change the situation. As a result of the fall was accelerated due to the fixation of long positions. Our medium-term outlook remains negative and we expect a further fall in the Australian dollar with the objectives of 0.70 and 0.68.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar has accelerated the decline today after the Australian dollar after the release of weak statistics in China. It is worth noting that the increase in the past weeks was unnecessarily strong and we expect a continuation of the negative dynamics in connection with the forecast of growth of the US dollar, as well as the possible easing of monetary policy of the Reserve Bank of New Zealand. Our medium-term outlook remains negative and we recommend holding short positions.