09.04.2015 - The US dollar rose after the publication of minutes of the Fed meeting
The price euro continued to decline on weak retail sales data in the euro area, which fell in February by 0.2% vs. forecasted 0.1%, and reduction of industrial orders in Germany by 0.9% against the expected growth of 1.5%. In addition, after the publication of minutes of the Fed meeting, the likelihood of higher interest rates in June increased. Today the dynamics of trading will depend on the statistics on the trade balance and industrial production in Germany (06:00 GMT) and data on the labor market in the US (12:30 GMT). We still recommend holding short positions and maintain a medium-term negative outlook due to the program of quantitative easing in the euro area and the expectation of monetary tightening in the United States.
The price of the British pound showed decline amid increased demand for the US dollar after the publication of minutes of the Fed meeting. In addition, investors are more optimistic about the outlook for the labor market than after data on new jobs in the US on Friday. Today is forecasted increased volatility after the release of statistics on the trade balance of Great Britain (08:30 GMT) and the decision of the Bank of England on interest rates (11:00 GMT). At present time, the pound is under the pressure of reduction of the euro and the US dollar strengthening. We maintain our medium-term negative view of British currency, but the downside potential is limited.
The Japanese yen has shown moderate growth after improving sentiment towards the US dollar, which was caused by the publication of minutes of the previous meeting of the US Federal Reserve. Today, the course of trading will be affected by the news on orders for machinery equipment in Japan (06:00 GMT) and data on the US labor market (12:30 GMT), the improvement which will lead to another fall in the yen. Our medium-term outlook remains negative and significant growth of the yen is possible only in case of increased demand for defensive assets.
The price of the Australian dollar continues to move inside the local uptrend, but today quotes could not continue to grow due to the strengthening of the US currency. We recall that a better attitude towards the Australian dollar was due to the saving of the RBA interest rates unchanged at 2.25%. Despite this, we expect easing of monetary policy in the future. Falling prices for export commodities like iron ore also adversely affect the medium-term prospects for the Australian currency. We maintain our medium-term negative outlook and recommend holding short positions.
The New Zealand dollar continues to consolidate near the level 0.7500 today showed a decrease due to the increasing demand for the US dollar. Dynamics of prices of the New Zealand currency depends on the external influence of China and Australia, which have a negative impact on the currency, but at the same time statistics for GDP growth in New Zealand is a positive factor and support investor confidence in the future growth of the New Zealand dollar. We expect strong price movement after the current consolidation of price and recommend to wait for a signal for opening positions.