09.09.2014 - Strengthening of the dollar against other major currencies continues

The price of euro continued its decline against the publication of the data on reduction the index of investor confidence in the euro area, which is caused by a general deterioration in economic activity in the euro area, as well as sanctions against Russia. At the same time, Germany's trade surplus rose to 22.2 billion, against an expected growth to 17.3 billion. Strengthening of the dollar continues in connection with the soon completion of the program of quantitative easing and the improvement of macroeconomic indicators in the country. Today, little impact on the course of trading may have data on the trade balance and the state budget of France in July (6:45 GMT), as well as statistics on an index of optimism in small business USA, which has recently contributed to the strengthening of the dollar. We maintain a medium-term negative view on the euro with a target of about 1.28.

Quotes of the British pound continued to fall amid expectations of a referendum on Scottish independence, where according to sociological surveys 51% of voters ready to vote for the independence of Scotland, which may lead to a decrease in the pound to the level of 1.50 and problems with payments on the bonds of the United Kingdom. Today is expected the increase of volatility in connection with the release of statistics on the trade balance, industrial production (08:30 GMT), as well as the speech of the head of Bank England (10:45 GMT). At the moment, price per pound will continue to decline until a referendum on Scottish independence on September 18 after which we will review our medium-term outlook.

The Japanese yen continued to decline against the strengthening dollar, as well as in connection with the negative data on the country's GDP, which fell in the second quarter by 1.8%. In addition, in the minutes of the previous meeting of the Bank of Japan was stated the negative impact of geopolitical risks, the risk of deflation in the euro area, as well as deterioration in exports and industrial production. At the same time, the Bank of Japan declares future measures to soften the impact of higher sales tax. We maintain a medium-term negative outlook for the yen.

The price of the Australian dollar fell sharply after unreasonably strong growth last week. The reason for the decline was a strengthening of the dollar and the decline in the index in the business confidence of Australia to 8 in August against 10 in July. Weak Japanese data also contributed to the drop in demand for the Australian currency. Tomorrow we should pay attention to consumer confidence in Australia. We maintain our negative outlook for the medium-term with objectives of 0.92 and 0.89.

The New Zealand dollar continued its decline following the strengthening of the US dollar and the decline of the Australian currency. Tightening of monetary policy in the United States and low prices for export products in New Zealand with the growth of the trade deficit of the country led to a drop in prices of the national currency. Increase in volatility is expected tomorrow evening after the statement of the Reserve Bank of New Zealand on monetary policy. We expect the downtrend to continue, but we can see an upward correction in the near future.

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