05.03.2015 - The focus of the market will be on the details of quantitative easing program launch in the Eurozone
The price of euro yesterday showed a decline against the strengthening of the US dollar and weaker statistics from the Eurozone. Thus, the service PMI in the euro area fell to 53.7 in February against the expected 53.9. At the same time, the non-manufacturing PMI in the US unexpectedly rose to 56.9, which is 0.4 better than analysts' expectations. It is worth noting that traders expect today's speech of the ECB President Mario Draghi (13:30 GMT), in which he will reveal details of the launch of quantitative easing program, which starts this month. In addition, the course of trading will be affected by the labor market data and factory orders in the US (13:30 GMT). Activity will be restrained in anticipation of tomorrow's report on the US labor market. We maintain our medium-term negative outlook for the euro and recommend holding short positions.
The price of the British pound shows a decline against the background of the fall of the euro and the US dollar strengthening. In addition, yesterday was published statistics on the service PMI in the UK, which pointed to a decline in the index to 56.7, against expected growth to 57.6. It is worth noting an increase in orders and higher wages in the sector. Today, the course of trading will be affected by the dynamics of the euro, as well as a statement of the Bank of England on monetary policy, which may hint at the terms of higher interest rates in the country (12:00 GMT). We expect a further decline on the British pound in the near future.
The price of the yen continues to consolidate near the levels of the previous day, with the absence of publication of important news in Japan. A slight increase in prices is due to the strengthening of the US dollar. It should be noted that traders are in no hurry to build up positions before the publication of an important report on the US labor market in February, which is likely to lead to a further strengthening of the US dollar and the decline of the yen. Tomorrow, a slight influence on the course of trading will have data on the index of leading economic indicators in Japan. We maintain our medium-term negative view on the Japanese currency.
The price of the Australian dollar is almost unchanged. Today was published statistics on retail sales in the country, which rose in January by 0.4%, in line with analysts' forecasts. At the same time, the country's trade deficit showed a slight increase, but it was close to the forecast of experts. Thus, the figure was 0.98 billion, against the expected 0.94 billion. At the moment, we see no reason for the growth of the Australian currency, and taking into account a number of fundamental factors associated with low prices for export commodities, the weakness of the labor market and the risk of slowing growth in China, we maintain a medium-term negative outlook for the Australian currency.
The price of the New Zealand dollar fell against the strengthening of the US currency. At the moment, we see no drivers for further growth. Tomorrow the course of trading will be affected by the data on the US labor market in January, the publication of which will lead to a strong increase in volatility. We recommend to wait for new signals to determine the direction of movement of the medium-term forecast of price and a slight increase in the near future.