06.10.2016 - The pound continues to update the multi-year lows
Currency trading and the euro. The price of euro showed decline yesterday against the dollar strengthening after was published strong data on non-manufacturing PMI in the US, which rose to 57.1 in September against the forecast of 53.1. This fact reinforces the likelihood of the Fed raising interest rates in December, which had a negative impact on gold price. Investors today will not accumulate positions ahead of tomorrow's release of the report on the labor market in the US, which strongly affect investors' expectations regarding the timing of the Fed raising interest rates. Today, it is worth paying attention to the retail PMI in the Eurozone (8:10 GMT) and the minutes of the previous meeting of the ECB (11:30 GMT). Our medium-term outlook remains negative and the growth potential in the near future is limited.
Currency trading and the British pound. The price of the British pound continued to decline amid fears of the negative effects of the country's exit from the EU. Earlier, Prime Minister Theresa May announced the beginning of the exit process in the end of March next year. Tomorrow, on the dynamics of trading will affect the data on the trade balance and industrial production in the UK, but the central event will be a report on US employment. We do not exclude a minor correction after the recent price reduction and maintain the medium-term negative outlook.
Currency trading and the Japanese yen. The price of the Japanese yen continued to fall against the US dollar amid increasing the probability of the Fed tightening monetary policy this year, which, together with the recent decision to maintain interest rates of the Bank of Japan near zero for the next ten years, will continue to put pressure on the yen quotes. Support for the Japanese currency could be a drop on the stock markets, which will lead to increased demand for defensive assets. Our medium-term outlook remains negative for the yen, but after the recent decline is likely a slight price increase today.
Currency trading and the Australian dollar. The price of the Australian dollar was unable to correct upwards, despite the strong statistics on the country's trade balance, the deficit of which in August totaled 2.01 billion expected against 2.32 billion. Investors continue to follow the fall in gold, which is one of the key export commodities for the country. In the coming days, the focus will be the US dollar dynamics, which may increase the volatility tomorrow after the labor market statistics in America. We forecast a drop in prices in the medium term and near future and are waiting for a sell signal.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued to decline, which was due both to the negative dynamics of prices for dairy products, which are a key export commodity group, and the strengthening of the US dollar. The low level of inflation in the country allows the RBNZ to continue easing of interest rates, which will also have a negative impact on the national currency of New Zealand. According to our estimates, the increase in recent months was unreasonably strong and we expect a drop in prices in the medium term and the probability of the negative dynamics in the near future has increased significantly.