08.03.2016 - China's trade balance was worse than expected

Currency trading and the euro. The price of euro continues to show increased volatility before the ECB meeting, the results of which will be announced on Thursday. On the one hand the index of investor confidence from Sentix in Eurozone fell to 5.5 in March against the forecast of growth to 8.8, but on the other hand, the markets are concerned about weak growth in wages in the United States. According to our forecasts, the ECB will make a decision to expand the asset purchase program by 10-20 billion euros per month, which will negatively affect the price of the euro. Today, it is worth paying attention to statistics on the volume of industrial production in Germany (07:00 GMT), and preliminary data on GDP growth in the Eurozone (10:00 GMT). Our medium-term outlook for euro remains negative.

Currency trading and the British pound. The price of the British pound continues a gradual increase amid the weakening of the US dollar. Today, will be the speech of the head of the Bank of England (9:15 GMT), after which the will be the speech of the Bank of England member of the Monetary Policy Committee Martin Weale (17:00 GMT). Investors are closely watching the economic data that has recently deteriorated, and are trying to assess the results of the referendum on the country's membership in the European Union. Our medium-term outlook for the British pound remains negative, but we expect growth rates closer to the referendum and afterwards.

Currency trading and the Japanese yen. The price of the Japanese yen after a long consolidation resumed growth after was published the news on the growth of GDP in the 4th quarter. Thus, the figure was revised to -0.3% vs. previously expected -0.4%. The trade surplus totaled 1.49 trillion yen in January. Tomorrow will be published statistics on the volume of orders for engineering equipment. Given the improvement in investor sentiment on the market, the demand for defensive assets declined and the yen may resume its fall in the near future. We maintain our medium-term negative outlook.

Currency trading and the Australian dollar. The price of the Australian dollar shows a strong volatility after in China was published weak data on the trade balance. Thus, the trade surplus fell to 32.6 billion dollars in February against the forecast of 51.2 billion. It should be noted that the figures in January and February are very volatile in connection with the celebration of the New Year according to the lunar calendar, which may happen on different dates. At the same time, growth is supported by the increase in commodities prices. Tomorrow will be published statistics on consumer confidence in Australia. We maintain our medium-term negative outlook.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar fell against the background of weak statistics from China. At the same time investors are waiting for the statement of the Reserve Bank of New Zealand on monetary policy, which will be published tomorrow night. Given the strong decline in inflation by 0.1%, is possible the further reduction of RBNZ’s interest rates, which will be negatively displayed on the quotations of the national currency.

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