08.01.2015 - Minutes of the Fed did not lead to significant market movements
The price of euro yesterday stabilized above 1.18 against the background of negative statistics on the consumer price index, which showed a decrease to -0.2%. This fact encourages the ECB to launch a full-scaled program of quantitative easing, the decision on which may be taken in the near future. At the same time, the US dollar was supported by data on the country's trade balance deficit which decreased to 39 billion, compared with an expected 42.3 billion, which was due to lower prices for imported oil. Minutes of the Fed did not bring the information that could significantly affect the course of trading. Thus, it was noted a temporary impact of low oil prices and a stronger US dollar, as well as the risks associated with the deterioration of the economic situation abroad. Markets are waiting for the publication of data on the US labor market on Friday. We maintain our medium-term negative outlook for the euro.
The price of the British pound remained almost unchanged yesterday. Minutes of the previous meeting of the Federal Reserve did not have a significant impact on the course of trading in the absence of hints on the timing of interest rate increases. It should be noted that traders are also in no hurry to build up positions before publishing a statement of the Bank of England on monetary policy (11:00 GMT). The course of trading may also be affected by the data on construction PMI (08:30 GMT), which the last time resulted in the fall of quotations of the British pound. Our medium-term outlook remains negative and we expect the decline to 1.50 in the near future.
The price of the Japanese yen fell today against correction on global stock markets, which leads to a decrease in demand for defensive assets. It is worth noting that the impact of the political crisis in Greece will be short-lived and can intensify closer to the election on 25 January. Traders expect the publication of statistics on the labor market in the US tomorrow. In addition, the course of trading will be influenced by the statistics on the index of leading economic indicators in Japan. We maintain our medium-term negative outlook on the Japanese currency.
The Australian dollar today showed growth on statistics on the construction sector, where the number of issued building permits increased by 7.5% in November against an expected decline of 2.7%. Despite this, the growth is likely to be short-term due to the negative impact of the trade balance of the country and weak macroeconomic indicators. We expect the decline in the near future and maintain the medium-term negative outlook.
The New Zealand dollar rose today following the Australian currency. Despite the current upward momentum, rising of prices is limited by fundamental factors including low export prices, the trade deficit and risks of further slowdown in the Chinese economy. We predict a decrease in quotations of the New Zealand currency in the near future and recommend holding short positions.