05.08.2015 - Confidence in the Fed raising interest rates in September has increased
Currency trading and the euro. The price of euro accelerated decline yesterday against the strengthening of the US dollar after the release of important data and comments by the Fed official Lockhart. Thus, Mr. Lockhart said that the Fed is close to raising interest rates and can delay it only in case of substantial deterioration in the data. Statistics on the volume of factory orders in the US, which grew by 1.8% in June, against a drop of 1.1% in May, was able to neutralize the positive effects of positive statistics from Spain, where the number of unemployed fell in July at 74 thousand against expected 45,6 thousand. Today, will be released important statistics on service PMI of the Eurozone (08:00 GMT), the Eurozone retail sales (09:00 GMT), the trade balance (12:30 GMT) and non-manufacturing PMI in the US (14:00 GMT). Our medium-term outlook remains negative and we recommend holding short positions.
Currency trading and the British pound. The price of the British pound yesterday showed a decline, which was due to the strengthening of the US dollar and weak statistics from the construction sector. Thus, the construction PMI fell to 57.1 in July, 1.5 below expectations of experts. Despite this, representatives of the construction companies are optimistic about the future prospects of the sector. Investors are waiting for tomorrow's statement of the Bank of England, which for the first time will be released together with the minutes of the meeting and the outlook for the economy of the country. We expect a drop in prices in the near future and maintain the medium-term negative outlook.
Currency trading and the Japanese yen. Quotes of the yen continued to fall against the background of growing investor confidence in the Fed raising interest rates in September, after a speech by the Fed official Lockhart. Tomorrow the course of trading will be affected by the data on the index of leading economic indicators in Japan. Activity will be limited due to the anticipation of the important statistics on the US labor market on Friday. Given the loose monetary policy of the Bank of Japan and the expectation of a stronger US dollar, we maintain a medium-term negative outlook on the Japanese yen.
Currency trading and the Australian dollar. The price of the Australian dollar after strong growth caused by the decision of the Reserve Bank of Australia to keep interest rates at 2.00%, resumed the downward movement due to technical factors, and the strengthening of the US dollar. Tomorrow, the dynamics will depend on the important statistics on the level of employment in the country. According to our estimates, the recent growth has been a correction, and we expect a continuation of the negative dynamics of prices in the near future. Our medium-term outlook remains unchanged.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued to gradually decline against the strengthening of the US dollar and weak statistics on the labor market in the country. Thus, the unemployment rate rose in the second quarter by 0.1% to 5.9% in line with expectations of analysts. On the other hand, employment grew by only 0.3%, which is 0.2% worse than forecast. According to our estimates, the price decline will continue in the near future and medium term.