05.05.2015 - Reserve Bank of Australia cut interest rates to 2.00%
Currencies trading and the euro. The price of euro continued its gradual decline in the first trading session of the week. Positive for the US dollar was the news on the growth of factory orders in March at 2.1%, against a decline of 0.1% in February. The index of investor confidence in the euro zone fell to 19.6 in May from 20.0 in April amid uncertainty over the Greek debt crisis. Today, a strong influence on the course of trading will have the publication of the European Commission economic forecasts (09:00 GMT). In the United States will be published data on non-productive PMI (14:00 GMT). Our medium-term outlook remains positive for the euro, but before changing the negative trend, the price may show a slight increase in the near future.
Currencies trading and the British pound. The price of the British pound showed minimal volatility due to the holiday in the UK. It is worth noting that investors are in no hurry to build up positions ahead of the parliamentary elections. At present it is difficult to guess what political force will win the elections. Today, the course of trading may be affected by the data on construction PMI (08:30 GMT). We maintain a medium-term negative view on the British pound, and we can see the increase in price volatility on Friday after the publication of election results in the country.
Currencies trading and the Japanese yen. The Japanese yen continues to show the lowest volatility due to public holidays in the country. Japanese investors returned to the market on Thursday. Strong influence on the course of trading this week may have the data on the US labor market. At the same time, uncertainty regarding the Greek debt restructuring may increase the demand for defensive assets like the yen. Our medium-term outlook for the Japanese yen remains negative.
Currencies trading and the Australian dollar. The price of the Australian dollar showed a strong increase in volatility after the Reserve Bank of Australia reduced interest rates by 0.25% to 2.00%. This decision was expected and investors continued to buy the Australian dollar on the background of higher iron ore prices. It is worth noting that the decrease in interest rates has already been priced in, but according to our forecasts the Australian dollar will continue falling in the near future. Statistics on the country's trade balance showed an increase of its deficit to 1.32 billion against 0.98 billion expected. The increase in iron ore prices may support the Australian dollar in the near future, but in the medium term, our outlook remains negative.
Currencies trading and the New Zealand dollar. The price of the New Zealand dollar has stabilized above the level of 0.75, after a sharp decline in the previous days. It is worth noting that the growth of the Australian currency was ignored by the New Zealand dollar. Investors did not rush to build positions ahead of the publication of important macroeconomic data on the unemployment rate in the country (22:45 GMT). Dynamics of prices is still strongly dependent on the cost of dairy products. We expect a continuation of the downward movement of prices in the near future, but do not exclude the strong growth after the release of data on the labor market of the country.