06.09.2016 - Reserve Bank of Australia kept interest rates unchanged

Currency trading and the euro. The price of euro showed little change yesterday on the background of low activity of investors due to the holiday in the US. It should be noted that the likelihood of the Fed raising interest rates in September fell after on Friday was published a report on the US labor market, which did not meet analysts' expectations. Support for the euro yesterday was the data on the index of investor confidence, which in September rose to 5.6 vs. expected 5.1. Today, the dynamics of trading will affect the news on industrial orders in Germany (06:00 GMT), a preliminary report on GDP growth in the euro area in the second quarter (09:00 GMT), as well as statistics on the non-manufacturing PMI in the US (14:00 GMT). Our medium-term outlook remains negative and the potential for growth fell significantly.

Currency trading and the British pound. The price of the British foot continued to consolidate against the US dollar after rose at the end of last week. Yesterday quotes supported unexpectedly strong report on the services PMI, that rose to 52.9 in August against the forecast of 49.1, indicating the decline in fears about the consequences of the referendum on the country's membership in the EU. Tomorrow in the UK will be published important statistics on the volume of industrial production, which can lead to a strong price movement. Our medium-term outlook remains negative despite the reduced probability of further reduction in interest rates of the Bank of England.

Currency trading and the Japanese yen. The price of the Japanese yen resumed fall after a slight strengthening against the background of the speech of the head of the Bank of Japan regarding the readiness to expand stimulus measures. Investors are waiting for the publication of statistics on the growth of Japan's GDP in the second quarter on Friday. Support for the Japanese currency may become a drop on the stock markets, which will lead to an increased interest in defensive assets like the yen. Our medium-term outlook remains negative due to the divergence in the monetary policy of the Fed and the Bank of Japan.

Currency trading and the Australian dollar. The price of the Australian currency showed steady growth on the background of the publication of the report on the balance of payments deficit in the second quarter which totaled to 15.5 billion compared to the forecast of 20.2 billion. It is worth noting that the Reserve Bank of Australia decided not to lower interest rates, but the possibility of such a move in the future remains open. Tomorrow in the country will be published important data on GDP growth in the second quarter. Our medium-term outlook remains negative and we expect the beginning of reduction in the near future.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed growth after the Australian currency, as well as due to the weakening of the US dollar. It is worth noting that the Reserve Bank of New Zealand may continue the process of reducing interest rates to deal with low inflation, but such a move is unlikely in the near future. The potential growth of quotations, according to our estimates is low and we maintain a medium-term negative outlook.

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