05.07.2016 - The Reserve Bank of Australia interest rate has not changed
Currency trading and the euro. The price of euro shows a decline against the US dollar amid weak statistics on the index of investor confidence in the euro area, which fell to 1.7 in July, against 9.9 in June. The pressure on the European currency has negative affect of British referendum results. Today, the dynamics of trading will affect the data on the service PMI (08:00 GMT) and retail sales in the Eurozone (09:00 GMT). In the US, will be published the data on the volume of factory orders (14:00 GMT) and investor sentiment can greatly affect the statement of President Federal Reserve Bank of New York William Dudley (18:30 GMT). According to our forecasts the euro will continue to fall due to the negative impact of the UK exit from the EU.
Currency trading and the British pound. The price of the British pound decreased within the local sideways movement. It is worth noting that after the strong decline on the background of the results of the referendum on EU membership, the British currency has stabilized. Yesterday was published important statistics on the construction PMI, which fell to 46.0 in June against 51.2 in May. The construction sector was one of the drivers of growth in recent years and will suffer as a result of the country's exit from the EU. Today, volatility could rise after a speech by Bank of England Governor Mark Carney (10:00 GMT). We expect a continuation of the negative dynamics of the price of the British pound in the medium term.
Currency trading and the Japanese yen. The price of Japanese yen strengthened against the US dollar on the background of saving high interest of investors to defensive assets such as the yen. Yesterday, the market activity was reduced due to the holiday in the US, where celebrated Independence Day. According to our forecasts, the fall in equity markets may lead to a further increase in demand for the Japanese yen, but the Bank of Japan's statement on intention to use foreign exchange intervention will constrain strengthening. We maintain our negative view on the yen, but do not rule out its growth in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar today declined. Thus, the Reserve Bank of Australia decided to leave interest rates at the same level - 1,75%, but according to our estimates the easing of monetary policy is possible in case of further deterioration of trends in the global economy. The negative for the Australian dollar was also the data on retail sales, which rose by 0.2% in May against the forecast of 0.3% and Australia's trade deficit, which totaled 2.22 billion vs. expected 1.72 billion. The situation on the commodity markets remains unstable, which can lead to the continuation of the negative impulse. Our medium-term outlook is negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued to decline against the backdrop of weakening of the Australian dollar and falling oil prices. It is worth noting a positive impact of the service PMI data in China from Caixin, which rose in June to 52.7, against 51.2 previously. In addition, it is worth noting the growth of the index of sentiment in the business circles of New Zealand to 19 in the second quarter, which is 17 better than in the previous period. Our medium-term outlook remains negative and the growth potential in the near future is minimal.