05.01.2015 - Volatility today will fall after yesterday's strong market movements
Currency trading and the euro. The price of euro yesterday showed strong volatility against the background of the fall of China's stock market, as well as in connection with the return of investors after the holiday period. It is worth noting that the euro was supported by the strong data on manufacturing PMI in the euro area, which rose to 53.2, which is 0.1 better than expected, as well as the weakening of the same indicator in the US to 48.2 in December, which is 0.4 less than the previous figure. Today, the dynamics of trading will affect the news on the labor market in Germany (8:55 GMT) and core consumer price index in the euro area (10:00 GMT). We continue to expect a further decline in the euro price in the near future and maintain the medium-term negative outlook.
Currency trading and the British pound. The price of the British pound continues to fall under the pressure of rising US dollar, and investors are betting on the future negative impact of speculation about the UK exit from the Eurozone. It is worth noting that today will be published the report of the Bank of England on the state of the credit market in the country and the construction PMI (09:30 GMT). We expect a further decline in price of the British pound in the medium term.
Currency trading and the Japanese yen. The price of the Japanese yen yesterday strengthened due to increased demand for defensive assets after Saudi Arabia decided to break off diplomatic relations with Iran and the stock markets in China showed a strong decline, which has led to a halt of trading on the Shanghai Stock Exchange. At the same time, Japan's manufacturing PMI rose to a maximum in 20 months and totaled 52.6, which is 0.1 better than expected. The course of trading will be affected by the dynamics of the US dollar and the situation on the Chinese market. Our medium-term outlook for the yen remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar showed a sharp decline amid the weakening of the Chinese currency and the sharp fall on the stock markets of the country. It is worth noting that China's manufacturing PMI calculated by Caixin fell to 48.2, against the forecast of 48.6. Later this week will be published data on the trade balance and retail sales in Australia, which will have a strong influence on the course of trading, but today the dynamics of prices will depend on external factors. Our medium-term outlook for the Australian dollar remains negative.
Currency trading and the New Zealand dollar. The price of New Zealand currency has continued to fall against the background of the negative impact from China and Australia, as well as through the strengthening of the US dollar. It is worth noting that before the New Zealand currency has grown without any special reason. At the moment, investors are reviewing portfolios and considering the divergence of monetary policy of the Fed and RBNZ, we expect a decrease in quotations in the near future with the first target at 0.66.