04.12.2015 - The decision of the ECB was less favorable than expected
Currency trading and the euro. The price of euro yesterday showed strong growth after the decision of the ECB on monetary policy. Thus, interest rates on deposits were reduced by 0.10% to -0.30%, the program of quantitative easing will continue through March 2017, but the volume of monthly purchases remained at 60 billion euros, which disappointed investors who had expected an increase by 15 billion. In addition, the forecast for GDP growth in the euro area has been improved by 0.1% to 1.5% this year. As a result, the strong growth supported the closing of short positions on the euro. Today, the focus of investors will be on data on the labor market in the US (13:30 GMT). Improved statistics will lead to an increase in the probability of the Fed raising interest rates, which will be negatively displayed on the price of the euro. Our medium-term outlook remains negative, despite yesterday's growth, and we expect a sell signal.
Currency trading and the British pound. The price of the British pound showed a strong rise yesterday amid the weakening of the US dollar against the euro after the ECB's decision on less monetary policy easing than expected. Today, price volatility will also remain at a high level in connection with the release of important statistics from the US, which will also have a strong impact on the dollar and the price can compensate for a significant part of yesterday's movement. Our medium-term outlook for the British pound remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened against the dollar yesterday, the weakening of the US currency after the announcement of the less active incentive measures by the ECB. Today is also possible a strong price movement, which can help to offset yesterday's growth. Next week a strong impact on investor sentiment will have data on the growth of the Japanese GDP in the third quarter. We maintain a medium-term negative outlook on the yen due to the expectation of monetary tightening by the Fed.
Currency trading and the Australian dollar. The price of the Australian dollar showed moderate growth yesterday, despite assurances by the US dollar's decline. Negative for the market were weak data on the trade balance of the country, whose deficit was 3.31 billion vs. expected 2.61 billion. Today was published positive statistics on retail sales in the country, which increased by 0.5% in October that is 0.1% better than expected. We expect the price decline of the Australian dollar in the medium term.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued to rise amid falling US dollar. Support for the national currency of New Zealand was also the rise in prices for dairy products. Today, volatility will remain at a high level, in connection with the release of important statistics on employment in the United States. The next week will have a strong influence on the trade data in China and the statement of the Reserve Bank of New Zealand on monetary policy in which may announce about further interest rate cuts. Our medium-term outlook remains negative.