08.10.2014 - ​IMF downgraded forecasts for GDP growth

Euro continues to consolidate below 1.27. At the end of the trading session quotes compensated morning decline associated with weak data on industrial production in Germany, which in August showed a decline of 4.0%, which is 2.6% less than the expectations of experts. Despite the increase in the number of vacancies in the United States to 4.84 million, the investors were disappointed by weaker data on consumer credit in the United States, the volume of which in August was 13.5 billion, against the expected 20.3 billion. Today, the central event of the day will be the publication of the minutes of the previous meeting of the Federal Open Market Committee of the Federal Reserve (18:00 GMT), where traders will be looking for hints on the timing of rising interest rates. In addition, today kicks off the corporate reporting season in the United States. We maintain a medium-term negative outlook for the euro.

The price of the British pound corrected upwards yesterday despite weak industrial production data of the country, which has not changed in August, despite the forecast of growth by 0.2% and 0.4% growth in the previous period. Today, the price dynamics can be affected by the data on the index of house prices (07:00 GMT) due to the fact that the construction sector has a significant impact on both the unemployment and the economy in general. Today investors will not rush to accumulate positions ahead of tomorrow's statement of the Bank of England on monetary policy. We expect price decline in the near future, but its potential remains low.

The price of yen strengthened on the background an updated IMF forecast for global growth. Thus, according to the report of the IMF, the global GDP in 2014 will grow by 3.3%, which is 0.1% less than previously expected. Japan's GDP growth forecast was lowered to 0.9%, compared to the previously expected increase by 1.6%. The reason for the revision was the negative effect of increasing the sales tax. In addition, the Bank of Japan said yesterday about maintaining the current settings of monetary policy in the country with the growth of the monetary base by 60-70 trillion yen and the target inflation rate of 2%. In addition, according to Mr. Kuroda in Q3 is expected the acceleration of the growth of the country's GDP. We maintain a medium-term negative outlook for the Japanese yen.

Australian dollar strengthened yesterday and reached 0.88, but began to correct today due to the negative statistics from China, which is a major importer of Australian commodities. Thus, the service PMI in China fell to 53.5 in September against 54.1 in the previous month. Tomorrow we should pay attention to the data on unemployment in Australia. Reduced forecasts for global GDP growth points to a further decline in prices for iron ore, which is the main export commodity of Australia. In this regard, we expect a further decline of the Australian dollar.

The New Zealand dollar began to decline following the Australian currency on the background of weak data from China. It should be recalled that earlier Reserve Bank of New Zealand intervened on the market to reduce the exchange rate of the national currency. This policy is likely to continue in the near future due to the low prices for export commodities and trade balance deficit. We expect further price decline of the New Zealand dollar and maintain a medium-term negative outlook.

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