05.06.2014 - Today, the ECB may adopt new measures to fight the low inflation
The price of euro fell slightly over yesterday's trading session. The course of trading was influenced by data on services PMI of the Eurozone, which fell by 0.3 to 53.2. Eurozone GDP in Q1 according to preliminary data increased by 0.2%, in line with analysts' forecasts. U.S. data have been controversial. Thus, the number of jobs in May rose by 179 thousand, against the forecast of 217 thousand, trade deficit in April rose to 47.2 compared with an expected 40.8 billion, while non-manufacturing PMI rose to 56.3 which is 0.7 better than the forecast. Today, in the focus will be the ECB meeting on which may approve new measures to fight the low inflation, which will lead to the decline in the euro. We expect sharp movement today and save medium-term negative outlook for the euro
The British pound continues to consolidate in the corridor 1,6700-1,6770. Data on services PMI in the UK which fell to 58.6, that is 0.3 better than the forecast, did not change the mood of the market. Today the course of trading may be effected by the data on the house price index (11:00 GMT) and the statement of the Bank of England on monetary policy (11:00 GMT). In connection with a possible decrease in the euro, we expect the fall of the British pound in the near future, but keep a long-term positive outlook.
The price of USD/JPY continues to consolidate below the strong level of 102.70. The weakening of the Japanese yen yesterday was caused by strong data on the non-manufacturing PMI in the U.S. and the growth of yield of 10-year U.S. bonds to 2.60%. Tomorrow will be published data on the index of leading economic indicators in Japan in April. Further reduction of quantitative easing in the U.S. and ultra-soft monetary policy of the Bank of Japan will lead to further growth of quotes of a pair. We keep medium and long term positive outlook for the USD/JPY.
The price of the Australian dollar increased despite weak data on trade balance of the country. Thus, the trade deficit totaled 0.12 billion in April, against a predicted surplus of 0.40 billion. Imports in April rose by 2%, while exports fell by 1%. Support for the dollar yesterday had an increase in iron ore prices on the world markets. We maintain our negative outlook for the Australian dollar in the medium term.
The price of the New Zealand dollar corrected upwards against the strengthening of the Australian currency. Decrease in the service PMI in China by 0.7, to 50.7, did not affect the mood of traders. Fall of the New Zealand dollar may slow down, but the potential of growth of the pair is very limited due to the policy of the Reserve Bank of New Zealand aimed at lowering the national currency in conditions of falling prices for export products. We maintain a medium-term negative outlook for the New Zealand dollar.