08.07.2015 - The demand for defensive assets support the Japanese yen
Currency trading and the euro. The price of euro continues to gradually decline against the backdrop of the negative impact of the Greek crisis. So, yesterday at a meeting of EU leaders has been declared that Greece should not expect a quick solution to the debt crisis and should provide a plan of reforms in the economy. At the same time, the dollar increased amid the data on the trade balance of the country, the deficit of which in May totaled 41.9 billion compared to the forecast of 42.5 billion. Today, the focus of investors will be on the publication of the minutes of the previous meeting of the US Federal Reserve (18:00 GMT), which may enhance investors' confidence in raising interest rates in the US in September. Our medium-term negative outlook for the euro remains unchanged.
Currency trading and the British pound. The price of the British pound yesterday has fallen sharply against the background of the negative impact of the fall of the euro, triggering by pending orders and ambiguous statistics. Thus, the volume of industrial production increased by 0.4%, against an expected decline of 0.2%, but the volume of production in the manufacturing industry fell by 0.6% against the forecast of growth of 0.1%. Today, the course of trading will be affected by the statement of the Bank of England on monetary policy (09:30 GMT) and the publication of the draft budget of the UK (11:30 GMT). We expect a fall of the British pound in the medium term due to the strengthening of the US dollar and the euro's decline.
Currency trading and the Japanese yen. The price of the Japanese yen continued to rise against the backdrop of increased demand for defensive assets in connection with the Greek crisis and the fall on the Asian stock markets. At the same time, a positive for investors has become the strong data on Japan's balance of payments, which totaled 1.64 trillion yen in May, against expectations of 1.39 trillion. Tomorrow the course of trading will be affected by the data on the volume of domestic orders for engineering products. Today is possible the weakening of the yen after the publication of minutes of the previous meeting of the Fed. We maintain a medium-term negative outlook on the yen.
Currency trading and the Australian dollar. The price of the Australian dollar fell to a six-year low amid falling Chinese stocks and reduced prices of iron ore. It is worth noting the strong influence of China on the Australian economy. Tomorrow is forecasted a strong price movement that will be caused by the publication of important statistics on the labor market in the country. Our medium-term negative outlook for the Australian currency remains unchanged due to the expectation of easing the monetary policy of the Reserve Bank of Australia, the strengthening of the US dollar and lower commodity prices.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to decline gradually within the downward trend. The main reasons that puts pressure on the New Zealand currency remains the expectation of further monetary easing by the RBNZ, low export prices and the fall of the Australian dollar. We see no reason to change the negative trend and increase in the near future is possible only within the correction.