04.05.2016 - The US dollar strengthened against a number of world currencies
Currency trading and the euro. The price of euro declines against the background of growth of US dollar against global currencies, which was caused both by technical factors, and the desire of investors to take profits before publication on Friday the important US labor market report. It should be noted that these statistics traditionally has a positive impact on the US currency and remains the most optimistic indicator, which increases the likelihood of the Fed raising interest rates this year. Today, the dynamics of trading will affect the news on service PMI in the Eurozone (08:00 GMT), retail sales in the Eurozone (09:00 GMT), the US trade balance (12:30 GMT), non-manufacturing PMI and factory orders volume in America (14:00 GMT). We forecast a drop in the near future, but do not rule out short-term upward impulse. Our medium-term outlook remains negative.
Currency trading and the British pound. The price of the British pound was replaced by the local uptrend against the strengthening of the US dollar, as well as the desire of investors to reduce the risks associated with the anticipated growth of speculation regarding the results of the referendum on the country's membership in the EU, which will take place on 23 June. A slight impact on the course of trading today will have the data on construction PMI (08:30 GMT). According to our estimates, the current decline of the British pound is likely to continue in the near future, but after the referendum, we expect to see a strong growth.
Currency trading and the Japanese yen. The price of the Japanese yen corrected in connection with the strengthening of the US dollar, as well as the fixing positions in the Japanese yen. We, recall that the reason for the strengthening of prices in recent days was the decision by the Bank of Japan to maintain the monetary policy settings unchanged, despite the negative impact of expensive yen on the economy and inflation. Japanese investors will return into the market after the holidays. On the same day will be published a report on the labor market in the US in April, leading to a significant increase in volatility. Our medium-term outlook on the yen remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar has continued to fall amid the US dollar strengthening, as well as yesterday's decision of the Reserve Bank of Australia to lower interest rates by 0.25% to 1.75%. In addition, the Australian Government has lowered the forecast for GDP growth in 2016-2017 fiscal year by 0.25% to 2.50%. Tomorrow will be published important data on retail sales and trade balance of Australia. The expected correction on commodity markets will have a negative impact on the Australian currency and the current negative momentum is likely to continue in the near future. Our medium-term outlook also remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar has continued to fall after was released the statistics on the country's labor market. Thus, the unemployment rate in the first quarter rose unexpectedly to 5.7%, which is 0.3% more than the previous figure, and 0.2% more than the forecast of analysts. On the other hand, employment grew by 1.2% over the same period, which was 2 times better than analysts' forecasts. Our medium-term outlook remains negative because of increase in the likelihood of lowering interest rates of the Reserve Bank of New Zealand after the recent reduction in interest rates in Australia. The fall in commodity markets will also have a negative impact on the New Zealand currency. Our medium-term outlook remains negative.