04.09.2014 - Today, the ECB will make a statement on the monetary policy
The price of euro strengthened against the background of agreements of the presidents of Ukraine and Russia about the need for a ceasefire in the east of Ukraine. Today begins a summit of NATO, which may also contribute to the stabilization of the situation in Ukraine. It should be noted that the data from the Eurozone once again disappointed investors. Thus, retail sales fell in July by 0.4%, which is 0.1% worse than forecast, and the service PMI fell in August by 0.4 to 53.1. Today, the central event of the day will be a statement of the ECB on monetary policy. Investors expect approval of schedules of auctions for ultra-long lending of 400 billion euro, as well as the launch of other measures to deal with low inflation. We expect continued fall of the euro following a statement by Mario Draghi (12:30 GMT). The medium-term outlook remains negative.
The price of the British pound has stabilized after a sharp drop on fears of Scotland exiting from the United Kingdom after the referendum on 18 September. At the moment, investors expect the publication of the results of the ECB meeting. It is worth noting that the Bank of England today will also decide on monetary policy in the country, but we do not expect changes in the parameters of the monetary policy in the country. Also today, we should pay attention to data on the labor market in the United States (12: 15-12: 30 GMT). The growth of volatility is also expected tomorrow after the data on unemployment in the United States. We assume the possibility of continuing price decline of the British pound, but expect the resumption of growth after the referendum in Scotland.
The price of the Japanese yen after rising, started consolidating in a sideways channel despite the statement by the Bank of Japan on monetary policy. Thus, the Bank left policy unchanged, but stated about the weakness of industry and the continuing reduction of investments in dwellings. Tomorrow will be published monthly economic report of the Bank of Japan and the index of leading economic indicators. Dynamics of the yen also depends on geopolitical tensions, the growth of which may increase demand for the currency. We maintain a medium-term negative outlook for the yen.
The price of the Australian dollar has risen sharply and compensated previous losses in connection with the publication of data on the country's GDP, which grew by 0.5% in the second quarter, which is 0.1% better than expected. At the same time, quotes were supported by weakening of the US dollar. Today it was reported that the trade deficit in July was 1.36 billion, against an expected growth to 1.77 billion. Further movement of the Australian dollar will depend on the dynamics of the American currency and labor market data in the United States. We maintain a medium-term negative outlook.
The New Zealand dollar yesterday after the correction caused by stronger-than-expected GDP data and the weakening of the Australian dollar is consolidating in a narrow channel. On the market are not enough reasons to continue the growth of the New Zealand currency and the price increase is possible only within the correction. The focus of traders will be on the release of data on the labor market in the United States, which in turn will greatly affect the value of the dollar. We expect continued downward movement of the New Zealand dollar in the near future.