05.06.2015 - Investors are waiting for a report on the US labor market
Currency trading and the euro. The price of euro corrected downwards after the release of statistics on the number of initial unemployment claims in the US, which fell to 276 thousand vs. expected 280 thousand. At the same time the Eurozone retail PMI rose in May to 51.4, but this fact was not able to change the mood of investors. The central theme for the market is the Greek crisis, where we expect to see a positive outcome of the negotiations. Today, the course of trading may be affected by the data on industrial orders in Germany for April (6:00 GMT), but the central event of the week will be the release of a report on the labor market in the US (12:30 GMT). In case of improvement indicators, the probability of the Fed raising interest rates this year will grow and support the US dollar. Our medium-term outlook for the euro remains negative and we recommend holding short positions.
Currency trading and the British pound. The price of the British pound, after strong growth that followed the announcement of the Bank of England's monetary policy, which has left its parameters unchanged, could continue to grow after the euro, but its potential was limited. Today will be published the report on consumer expectations for inflation in the 1st quarter (8:30 GMT), which is likely to be low, and will further reduce the British currency. In addition, the expected strong price movement after the release of statistics on the US labor market, which is likely to strengthen the dollar.
Currency trading and the Japanese yen. The price of the Japanese yen rose slightly against the background of increased demand for protective assets, which was due to increased volatility on the markets due to the negotiations on restructuring the debts of Greece, and the expectations of the meeting of OPEC and statistics on the state of the US labor market. The index of leading economic indicators in Japan in April increased to 107.2% versus 106.0% in March, but was 0.1% worse than analysts' forecasts. On Monday will be released a large block of statistics on the Japanese economy. Today, we expect increased volatility and maintain the medium-term negative outlook.
Currency trading and the Australian dollar. The price of the Australian dollar continues to decline against the strengthening of the US dollar, as well as in connection with yesterday's publication of weak statistics on the country's trade deficit, which rose to its highest level due to low commodity prices. On Monday, we should pay attention to the data on China's trade surplus, which is the main consumer of Australian products. We expect increased volatility today. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to decline steadily within a downtrend due to the strengthening of the US dollar and the possibility of lowering interest rates by the Reserve Bank of New Zealand. According to our estimates, the price is likely to fall further in the near future, and today we will see a high probability of increased volatility on the market. Our outlook remains negative, but the downside potential has reduced.