07.01.2015 - Waiting for the publication of minutes of the Fed meeting resulted in a further decline of the euro
The price of euro continues to decline amid expectations of the publication of minutes of the previous meeting of the US Federal Reserve (18:00 GMT) at which was decided to refuse from using the phrase concerning the preservation of interest rates at low levels for a long period of time. It is worth noting that on the price of the euro continues to push the political crisis in Greece, as well as the expectation of launching a full-scale quantitative easing. Today on the course of trading may also affect the data on the consumer price index and unemployment in the euro area (09:00 GMT). Our medium-term outlook for the euro remains negative and we recommend holding short positions on the euro.
The British pound after some consolidation continued downward movement after the publication of data on the service PMI, which unexpectedly fell in December to 55.8, against 58.6 in November. This fact points to a slowdown in economic growth in the country, and analysts predict an increase of GDP in the 4th quarter by 0.5%, against 0.7% in Q3. In this regard, we expect a later increase in interest rates and expect continued reduction of the price of the British pound to 1.50.
The price of the Japanese yen strengthened today amid growing demand for stocks in the region, which has reduced the demand for safe assets. Despite this, rise in prices in the near future may be caused by continuation of speculation about the impact of the Greek crisis on the economy of the European Union. On the other hand waiting for new stimulus measures to deal with recession in the country leads to the continuation of devaluation of the country. We assume the possibility of strengthening yen to the end of the month, but the medium-term view remains negative.
The Australian dollar shows a decline after correctional growth which was supported by the positive statistics on business activity in the service sector in China. Indicators of manufacturing activity in Australia continued to deteriorate, and the slowdown in China and low export prices lead to a weakening of the national currency. According to our forecasts growth is unlikely and the current downward trend will continue in the medium term.
The price of the New Zealand dollar remains volatile, and after a strong corrective movement, resumed a downward trend. At the moment, the most likely is a continuation of the downward movement of the price due to weak performance of the trade balance and the expectation of deteriorating economic situation in the Asia-Pacific region. We maintain our medium-term negative outlook and recommend holding short positions.