04.10.2016 - The RBA kept interest rates at around 1.50%

Currency trading and the euro. The price of euro showed decline against the US dollar, on the backdrop of increased demand for the US currency after the release of stronger statistics on US manufacturing PMI, which rose to 51.5 against 49.4 in August. The comparable figure in the Eurozone remained unchanged at around 52.6. Today is not expected publication of macroeconomic data capable to affect the course of trading. The central event of the week will be publication of the labor market report in the US in September, which will be held on Friday. Our medium-term outlook for the euro remains negative due to the expected increase in interest rates of the Fed in December, but in the near future, the current consolidation may continue.

Currency trading and the British pound. The price of the British pound yesterday showed a strong decline after Prime Minister Theresa May said that the country will begin the process of exiting the EU until the end of March 2017. Support for the currency became stronger data on the manufacturing PMI, which rose to 55.4 in September against the forecast of 52.1. The decline of the British pound has supported the growth of exports, and strengthened the position of local products at the domestic market. Today, it is worth paying attention to the data on construction PMI (08:30 GMT). Our medium-term outlook remains negative, but we do not exclude short-term correction today.

Currency trading and the Japanese yen. The price of the Japanese yen against the US dollar fell on the background of positive statistics in America. Data on consumer confidence in Japan, which rose to 43.0 in September, which is 1.0 more than in August, could not lead to a change in the trend. After a long consolidation, the yen resumed its fall. Further strengthening of prices in case of increase in demand for defensive assets will be limited due to the possibility of the use of foreign exchange interventions. We expect a continuation of the negative dynamics of the yen and maintain the medium-term pessimistic forecast.

Currency trading and the Australian dollar. The price of the Australian dollar has changed slightly against the background of saving the monetary policy settings in the country unchanged. Thus, the key interest rate was 1.50% and there is no need for further easing of monetary policy in the near future. It is worth noting that the number of permits issued for construction of new housing declined by only 1.8% in August after rising 12.0% in July. Quotations growth potential according to our estimates will be limited and we maintain a medium-term negative outlook.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a slight increase, and then continued to consolidate. The reason for the improvement in sentiment today was the publication of a report on the index of business sentiment in New Zealand, which has grown to 26,3 in the third quarter against the previous level of 19. Our medium-term outlook remains negative due to the low level of inflation in the country, which may lead to a decrease in interest rates of RBNZ, lower prices for dairy products and the expectation of a stronger US dollar. Our medium-term outlook remains negative.

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