06.01.2015 - The demand for yen is supported by the crisis in Greece
The price of euro yesterday showed a slight increase on the background of positive macroeconomic data on the index of investor confidence in the euro area, which rose in January to 0.9, compared with an expected decline of 0.9. At the same time, the number of unemployed in Spain fell by 64.4 thousand in December. Despite the correction, quotes of the European currency remained under pressure of expectations of the launch of a full-scale program of quantitative easing by the ECB. The course of trading also continues to be negatively affected by the news from Greece, which after the parliamentary elections on Jan. 25 may withdraw from the euro area. Today in the course of trading may be affected by the data on service PMI in the euro zone (09:00 GMT) and the US (14:45 GMT), as well as statistics on factory orders in the US (15:00 GMT). The medium-term outlook for the euro remains negative.
The price of the British pound stabilized after sharp decline last week. Negative for investors yesterday was the data on the construction PMI, which showed a slowdown in the sector to its lowest level since July 2013. Let us remind that the construction sector is one of the key for the labor market and GDP growth. Despite this, the index remains at a high level of 57.6. Today, it is worth paying attention to the indicators of the service PMI the report and of Bank of England on the credit market in the country (09:30 GMT). We expect price correction in the near future, but after that, the price according to our estimates will reach 1.50.
The Japanese yen continues to rise in price against the background of the increased demand for currency on the part of investors. So, the yen is known as a defensive asset and continued decline in oil prices, as well as the political crisis in Greece, which could lead to the exit from the eurozone of the country and a default on Greek debt stimulates demand for the Japanese currency. On the other hand, the tightening of monetary policy in the United States and its weakening in Japan leads to the further devaluation of the yen. We see no reason to change the negative dynamics of yen except for risks that will continue to support demand for defensive assets. We also maintain a medium-term negative outlook on the yen.
The price of the Australian dollar showed growth against the background of positive statistics on the country's trade balance deficit which despite the increase to 0.93 billion in November, was lower than the forecast of 1.59 billion. At the same time service PMI in China calculated by HSBC has pleased investors. Thus, the figure rose to 53.4 in December, against 53.0 in the previous period. Despite this, the position of the Australian dollar remains weak due to low prices for export commodities, the weakness in the labor market and a reduction in investment in the mining sector. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions.
The price of the New Zealand dollar corrected upwards after a strong decline in the last week. Support of the national currency of New Zealand have provided data from China where the service PMI calculated by HSBC rose 0.4 to 50.4 in December. Improvement in investor sentiment due to the expected measures to stimulate growth in China supports the demand for the New Zealand dollar, but low export prices and the trade deficit continues to put pressure on the quotes of the pair. We maintain our medium-term negative outlook and expect the resumption of the downward movement after the correction.