04.02.2016 - The US dollar fell heavily
Currency trading and the euro. The price of euro showed a strong decline yesterday amid weakening of the US dollar, after the release of non-manufacturing PMI statistics in the US, which in January fell to its lowest level in 2 years. Thus, the index reached 53.5 in January, against the forecast of decline by 0.2, to 55.1. At the same time, the president of the Federal Reserve Bank of New York said that financial conditions have become more stringent and the rising dollar has a negative impact on the US economy. The drop in investors' confidence in raising interest rates this year, is leading to the growth of the euro against the dollar. Today we should pay attention to the statistics on the volume of factory orders in the US (15:00 GMT). Investors will not hurry with active movements due to the expectation of tomorrow's publication of report on the US labor market. Our medium-term outlook for the euro remains negative, despite the possible continuation of growth in the near future.
Currency trading and the British pound. The price of the British pound rose yesterday against the weakening US dollar, as well as the closing of short positions on the pound. Today, in the focus of investors will be the publication of the previous meeting of the Bank of England and its decision on interest rates (12:00 GMT). Strong influence on the dynamics of trading will be the speech of the Bank of England (12:45 GMT) and its soft rhetoric can lead to resumption of the negative dynamics of the British currency prices. Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen greatly strengthened against the background of US dollar fall. The strong rise in oil price volatility has also continued to maintain an interest in defensive assets. Today, the amplitude of price volatility is likely to fall, and investors will wait for tomorrow's publication of US labor market data. Our medium-term outlook for the yen remains negative and we expect the resumption of the fall after the demand for protective assets will decline.
Currency trading and the Australian dollar. The price of the Australian dollar has grown against the background of a sharp rise in oil prices. The Australian currency has a strong dependence on the price of commodities and in the near future, we expect continued high level of volatility on the background of the expected strong movements in commodity markets. Support for the currency of the country were also news on the growth of the index of business confidence to 4 in the final quarter of 2015, versus 1 in the 3rd quarter. Tomorrow we should pay attention to the data on retail sales in the country.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed strong growth against the background of the recent publication of a report on unemployment in the country, the level of which unexpectedly fell to 5.3% vs. expected 6.1%. At the same time, improving the Australian currency prices and rising raw material prices supported the bulls. Today we can see the price correction. Our medium-term outlook remains negative and the current growth is used to find the entry point into short positions.