05.11.2014 - Unemployment in New Zealand once again has fallen
The price of euro corrected upwards amid weakening of the US dollar after the publication of data on the growth of the trade deficit of the country in September to 43.0 billion, which is 3.0 billion worse than expected. Meanwhile, factory orders in September fell by 0.6% against the expected decline of 0.2%. Report of the European Commission on the reduction of forecast of GDP growth in the euro area in 2014 to 0.8% versus 1.2% previously, did not affect the mood of investors. Traders expect the ECB's statement on monetary policy tomorrow, and the data on the US labor market on Friday. Today we should pay attention to the service PMI (09:00 GMT) and retail sales (10:00 GMT), as well as non-manufacturing PMI of the United States (15:00 GMT). We maintain a medium-term negative outlook for the euro and recommend holding short positions.
The volatility of the British pound fell greatly and the price continues to consolidate near the level of 1.60. Construction PMI, which fell to 61.4 in October, compared with an expected 63.5 has not led to a reduction in prices. Today the course of trading can be influenced by the statistics on the service PMI for October (9:30 GMT). Investors expect tomorrow's statement of the Bank of England and data on the industry in the country. Risk for the UK economy remains weak Eurozone. We maintain a positive medium-term outlook for the British pound due to the stable growth of the economy and the improvement in the labor market of the country.
The Japanese yen after a minor correction resumed falling on the background of the statements of the Bank of Japan on the effectiveness of monetary stimulus. According to our estimates previous statement about increasing purchases of government securities to 80 trillion yen will continue to put pressure on the quotations of the yen. In addition, today was published data on the monetary base, which grew by 36.9% over the year, which is 0.7% more than in the last month. Tomorrow it is worth paying attention to the index of leading economic indicators in Japan. We maintain a medium-term negative outlook on the yen.
The price of the Australian dollar corrected upwards, despite the weak trade data, where the deficit rose to 2.26 billion against 1.78 billion expected. Investors were supported by the data on retail sales growth by 1.2% in September. According to our estimates, the volatility will rise tomorrow after the release of data on unemployment in Australia, and on Friday in connection with the release of the report of the Reserve Bank of Australia on monetary policy. Taking into consideration risks associated with the Chinese economy and low prices for export commodities, we maintain a medium-term negative outlook for the Australian dollar.
The price of the New Zealand dollar rose within the correction after reaching the psychologically important level of 0.77. Positive for investors was the data on the level of employment which in the 3rd quarter increased by 0.8%, which is 0.2% better than the forecast and the unemployment rate fell to 5.4%, against 5.6% in the previous period. Investors continue to monitor the state of the country's trade balance and the data from China, which is the main trade partner of New Zealand. We maintain a medium-term negative outlook.