Currency trading and the euro. The price of euro continued to fall against the US dollar amid growing concerns about the negative effects of the UK’s exit from the EU. It is worth mentioning that yesterday, US traders returned to the market after the celebration of Independence Day, and began to sell risky assets. Today, the dynamics of trading will affect the speech of the ECB chairman Mario Draghi (08:00 GMT), the US trade balance statistics (12:30 GMT) and the publication of minutes of the previous meeting of the US Federal Open Market Committee (18:00 GMT). We forecast a drop in prices in the medium term and in the near future.
Currency trading and the British pound. The price of the British pound continued to decline during which has overcome the psychologically important level of 1.3000. The Bank of England yesterday said about expected reduction of capital inflows, as well as lowering the capital requirements for banks, which should lead to an increase in resources for lending to 150 billion pounds. Pressure on the pound also has a probable reduction in the interest rate of the Bank of England this year. We maintain our medium-term negative outlook on the British pound and expect it to fall in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen continued to strengthen against the US dollar amid falling commodity prices and the fall on stock markets, which was the result of increasing concerns about slowing global growth. In case of continued growth there is the probability of currency interventions by the Bank of Japan, but at the same time the Japanese authorities will probably coordinate actions with the Fed. The growth of the yen as a safe asset may continue in the near future, but in the case of reducing the risks in the global markets we will see a significant drop in the Japanese currency.
Currency trading and the Australian dollar. The price of the Australian dollar showed a decrease due to the strengthening of the US dollar, the strong fall in commodity markets, which has a key influence on the dynamics of the local currency, as well as the closing of long positions after recent strong growth. Macroeconomic data from Australia remains controversial, and the growth of the country's trade deficit continues to put pressure on the price of the Australian dollar. We forecast a drop in the medium term and in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues negative movement after started to correct down yesterday. The growth of the US dollar and the weakening of commodity prices were the main reasons for the decline. At the same time it is worth noting the lack of incentives to continue the upward trend in the near future due to negative expectations for the growth of the world economy. Our medium-term outlook for the New Zealand dollar remains negative.