07.04.2015 - European investors returned to the market after the holidays
The price euro corrected down by technical factors. US data on non-productive PMI, which fell to 56.5, that is 0.1 worse prognosis and 0.3 worse than the previous indicator could not lead to an increase in the euro. It is worth noting that the President of the Federal Reserve Bank of New York, William Dudley said the US GDP growth may slow down to 1% in the first quarter, against the background of the cold weather and the strengthening of the US dollar, which negatively affected the US exporters. Today the dynamics of trading will depend on the statistics on service PMI in the Eurozone (7:45 GMT) and the index of investor confidence in the Eurozone (08:30 GMT). Investors are also waiting for the outcome of negotiations on the debt problems of Greece. Given the program of quantitative easing in the euro area, we keep the medium-term negative outlook for the euro.
The price of the pound corrected down due to technical factors, as well as due to a drop in the euro. Today, investors are returning to the market after a long weekend. The course of trading will be affected by the data on the UK service PMI (08:30 GMT) and the minutes of the meeting of the Committee of the Bank of England on Financial Policy (08:30 GMT). It should be recalled that earlier the head of the Bank of England said that the next step of the regulator will be raising interest rates. Given the negative impact of the dynamics of the euro and the deterioration of macroeconomic indicators the UK, we maintain a medium-term negative view on the British pound.
The price of the yen corrected upwards against a stronger US dollar. Today, investors are in no hurry to build up positions ahead of tomorrow's publication of statements of the Bank of Japan on monetary policy and the release of statistics on the balance of payments and the index of assess of the current situation in Japan. Analysts continue to assess the possible steps the Fed on interest rates, against the background of deteriorating macroeconomic data from the United States. Given the loose monetary policy in Japan, we maintain a medium-term negative outlook for the euro.
The price of the Australian dollar has shown a sharp increase on the background of positive statistics on retail sales in Australia, which increased by 0.7%, compared with an expected growth of 0.4%. The main driver of growth was the decision by the Reserve Bank of Australia to keep interest rates unchanged at 2.25%. Many analysts predicted a decrease in interest rates by 0.25%. According to our forecasts, the rise in interest rates could take place in the next RBA meeting. The current increase is short-term and we expect a drop in prices in the medium term.
The New Zealand dollar price corrected down, but stabilized against the strengthening of the Australian dollar. The improvement in the trade balance of New Zealand supports the national currency of the country, but export prices are still low. We recommend to wait for a signal to open new positions on the New Zealand dollar.