Currency trading and the euro. The price of euro fell again yesterday, and at the moment continues to consolidation after the end of which we expect to see strong price movement. Thus the negative for the European currency appeared data on service PMI in Eurozone, which in September fell to 53.7 that is 0.3 worse than analysts' expectations. At the same time, the index of investor confidence in the euro zone fell to 11.7 in October, which is 0.5 less than the forecast. Today, the dynamics of trading can be influenced by the news of the meeting of finance ministers of the euro area and statistics on Industrial orders in Germany (06:00 GMT), the Eurozone’s retail PMI (8:10 GMT), and the US trade balance (12:30 GMT). According to our estimates, euro continued to fall in the medium term, despite the likely continuation of the consolidation in the near future.
Currency trading and the British pound. The price of the British pound continued its decline against the strengthening of the US dollar, as well as statistics on the deterioration of the service PMI, which in September fell to 53.3, which was the minimum level since April 2013. Analysts had expected an increase to 56.4. Today will be released the report on the index of house prices in the UK (07:00 GMT), but investors will be waiting for the publication of statistics on industrial production on Wednesday. The potential for further reduction is limited, but we maintain a medium-term negative outlook.
Currency trading and the Japanese yen. The price of the Japanese yen has weakened and now has stabilized after the strong volatility on Friday. Investors did not rush to open new positions before the statements of the Bank of Japan on Wednesday, during which can point to a further weakening of monetary policy in the country to support the growth of inflation and mitigate negative impact of the economic slowdown in China. We expect increased volatility in the coming days and look forward to the fall of the yen in the medium term.
Currency trading and the Australian dollar. The price of the Australian dollar rose after the Reserve Bank of Australia decided to leave interest rates unchanged at 2.0%. At the same time statistics on the country's trade balance suggests continued negative trends, which in the future will pull down the price of the Australian dollar. Thus, the trade deficit rose to 3.1 billion vs. predicted 2.48 billion. According to our estimates, the current growth will be short-lived and the fall will resume in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar was not able to continue to grow and began to be corrected despite the rise in the Australian currency. The weak performance of the trade balance and the possible easing of monetary policy in the future, will be the main factors that put pressure on quotations of the New Zealand currency. We maintain a medium-term negative outlook.