04.06.2015 - Australia's trade deficit rose to a historic high

Currency trading and the euro. The price of euro yesterday showed the strong growth against the backdrop of statement by ECB President Mario Draghi on the effectiveness of quantitative easing, which stimulates the growth of inflation in the region. This fact has led to the sales of German bonds. In addition, the purchase of euro was due to positive news on the progress in the negotiations between Greece and creditors. According to our estimates, Greece will reach an agreement in the near future, but the growth potential of the euro is limited despite the strong levels near 1.15. The unemployment rate in the euro area fell in April by 0.1% to 11.2%. Today, the course of trading will be affected by the data on the retail PMI in the euro area (8:10 GMT) and the labor market in the US (12:30 GMT). Investors are waiting for the release of the important report on unemployment in the US tomorrow. Our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound could not continue to grow following the euro. Service PMI fell unexpectedly in the country in May to 56.5, which is 3.0 less than in April. This fact has led to a slight fall in spite of the weakening US dollar. Today, the course of trading will be affected by the application of the Bank of England after the publication of regulatory decisions regarding the parameters of monetary policy (11:00 GMT), which, according to our forecasts will remain unchanged. We expect a fall in prices of the British pound in the medium term.

Currency trading and the Japanese yen. The price of yen stabilized after some strengthening in the previous days. The weakening of the US dollar against the background of the euro. Improvement of investors' expectations regarding the positive outcome of the negotiations with the creditors of Greece reduces the demand for defensive assets like the yen. It should be noted that the activity of investors today will be constrained by the expectation of the release of an important report on the US labor market, which will be held tomorrow. Our medium-term outlook remains negative due to the loose monetary policy of the Bank of Japan and the expectation of the Fed raising interest rates this year.

Currency trading and the Australian dollar. The price of the Australian dollar showed strong decline against the publication of statistics on retail sales in the country, which have not changed in April. Analysts had forecasted a growth rate of 0.3%. The main negative factor was the news on the country's trade deficit, which rose to its highest level in the history of the country of 3.89 billion vs. expected 2.17 billion. Exports in the country fell by 6%, while imports rose by 4%. The main reason for the negative data was the fall in prices of iron ore and other minerals, which are the main export commodities of the country. Our medium-term outlook remains negative and we recommend holding short positions.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to decline within the downtrend which is caused by the expectation of lowering interest rates by the Reserve Bank of New Zealand to support economic growth in the country. In addition, the negative for the national currency of the country will be low prices for dairy products. The fall of the Australian dollar has led to a drop in prices today. We maintain a negative outlook for the New Zealand dollar, with the target at 0.70.

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