06.03.2015 - The dollar may strengthen after the release of statistics on the labor market
The price of euro showed a decrease on the background of negative statistics on industrial orders in Germany, the volume of which fell in January by 3.9%, against an expected fall of 1.0%. The main event of the day was the speech of the ECB chairman, Mario Draghi, who announced the launch of a program of quantitative easing in the Eurozone on March 9. In addition, Mr. Draghi announced plans of buying bonds with an interest rate of -0.2%. We recall that for 18 months will be the purchased assets for 60 billion euros a month and, if necessary, the period of the program will continue. Today, the course of trading will be affected by the data on GDP growth in the euro area (10:00 GMT), industrial production in Germany (07:00 GMT) and a report on the US labor market (1330 GMT). Our medium-term outlook remains negative and we recommend holding short positions.
The price of the British pound continued to fall, following the European currency. It should be noted that housing prices in the UK in February fell by 0.3%, which is 0.1% worse than analysts' expectations. The Bank of England monetary policy options left the country without a review. Today, the movement of the British currency will also depend on external data. Particular attention should be paid to statistics on the US labor market, the improvement of which may lead to the continuation of the downward price movement. Data on inflation expectations in the UK (09:30 GMT), will have little impact on the course of trading. We recommend you keep short-term short positions.
The price of yen gradually decreases against the strengthening of the dollar before the release of statistics on the US labor market. Improvements in employment will lead to the expectation of an earlier raising of the Fed interest rates. At the moment, the price of the yen strengthened due to technical factors. On Monday will be published important statistics for GDP growth and the balance of payments, which will lead to increased volatility. Our medium-term outlook for the Japanese yen remains negative.
The price of the Australian dollar corrected upwards after falling sharply yesterday on the background of a stronger US dollar. Today we can see the continuation of the downward price movement in case of positive statistics on the US labor market. Reduced investment in the mining sector, the weakening of the labor market and the risks associated with the crisis in the construction sector in China, continue to put pressure on the Australian currency quotes. We recommend holding short positions and maintain a medium-term negative outlook.
The New Zealand dollar fell sharply yesterday amid strengthening of the US dollar and due to technical factors. According to our estimates, after a long consolidation, quotes will continue to decline. Negative for the New Zealand currency remains weak Australian dollar, and risks associated with the slowdown in the Chinese economy, which is the main importer of New Zealand goods. We expect a further drop in prices and recommend to open short positions.