07.07.2016 - The Australian dollarhas strengthened
Currency trading and the euro. The price of euro could not continue to decline and started to correct after the recent sharp fall. The minutes of the last Fed meeting noted the expectation of further economic growth and temporary slowdown in jobs growth in May. Today, the dynamics of trading will affect the data on industrial production in Germany (09:00 GMT) and the number of initial unemployment claims in the US (12:30 GMT). Investor activity will be constrained by the expectation of tomorrow's publication of statistics on the labor market in the US in June. Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound corrected upwards after the recent decline after the Bank of England lowered the capital requirements for banks, which should lead to the growth of lending to 150 billion pounds. Today will be published important data on the volume of production in the country (08:30 GMT) and forecasts for UK GDP from NIESR (14:00 GMT). The deteriorating situation in the construction sector, which is key for the country's economy, will increase pressure on the British pound. We maintain our medium-term negative outlook on the British currency.
Currency trading and the Japanese yen. The price of the Japanese yen after a minor correction resumed its strengthening. Worsening forecasts for global growth as well as volatility on commodity and stock markets will lead to saving the increased interest of investors to defensive assets. It should be noted that the head of the Bank of Japan Haruhiko Kuroda said in his speech about the moderate recovery of the economy in the future, and noted the intention to take the necessary measures to achieve the inflation target of 2.0%. Tomorrow, on the dynamics of trading will affect the data on balance of payments, lending and the average wage in Japan. The growth of the yen may continue, but in case of reducing the tension on markets, we will see a strong fall of the yen.
Currency trading and the Australian dollar. The price of the Australian dollar today showed strong movement after the international credit rating agency Standard & Poor's downgraded the country's long-term rating from "stable" to "negative", but has left it unchanged at “AAA”. The reason for such a step was a general deterioration in the world economy and political instability in Australia after the recent parliamentary elections. At the same time, the Australian dollar demand supported high yield of bonds in the country compared with the American. We maintain our medium-term negative outlook for the Australian dollar.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar strengthened against the background of increased investor interest in the country's government bonds amid falling US bond yields. The potential growth of the New Zealand dollar in the near future is limited and volatility in commodity markets, as well as the expected strengthening of the US dollar will put pressure on the local currency. Our medium-term outlook for the New Zealand dollar remains negative.