04.08.2016 - The Bank of England today can lower the interest rate

Currency trading and the euro. Price of euro showed growth after in the US was published strong data on the labor market. Thus, the number of jobs in the US private sector from ADP has increased by 179 thousand, against the forecast of 171 thousand. Today, the dynamics of trading will affect the data on factory orders in the US (14:00 GMT) and the number of initial unemployment claims in the US (12:30 GMT). Investors will not hurry with active operations until tomorrow's publication on the US labor market data. Today, is also possible a strong influence of decisions of the Bank of England on interest rate on the dynamics of the euro. Our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound corrected against the strengthening of the US dollar after the strong labor market statistics. Today, the focus will be the Bank of England's monetary policy decision and the more likely is the reduction of the key interest rate from 0.50% to 0.25%. In addition, there is the possibility of renewed quantitative easing program. In this case, we see the fall of the British currency. Our medium-term outlook for the British pound remains negative due to the negative influence of the British exit from the EU on economic performance.

Currency trading and the Japanese yen. The price of the Japanese yen fell slightly against the dollar after it grew up in anticipation of a strong labor market report in the US that will be published on Friday and that can increase the chance of the Fed raising interest rates this year. It is worth noting that previously the yen rose against the backdrop of increased demand for protective assets and investors’ disappointment on smaller than expected package of measures to stimulate the Japanese economy. Tomorrow price volatility will increase. We maintain our medium-term negative outlook on the yen and forecast the beginning of the fall in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar resumed its rise against the US dollar amid rising commodities prices. It is worth noting that the reason for yesterday's correction was strengthening of the US dollar. Today in Australia, was published the data according to which the retail sales rose by 0.1% vs. 0.3% in June. Tomorrow will be published report of the Reserve Bank of Australia on monetary policy. The correction in commodity markets can support the growth of the Australian currency in the short term. We expect the resumption of the negative dynamics in the near future and maintain the medium-term negative outlook.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a strong decline within the correction. Investors fixed position after a strong growth in the previous days. On the trading dynamics will continue to influence news from Australia and the USA. We expect increased volatility tomorrow. Our medium-term outlook remains negative due to the expectation of lower interest rates of the Reserve Bank of New Zealand, the likely reduction on commodity markets and the strengthening of the US dollar.

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