09.12.2014 - Statement by the Minister of Finance of Japan supported the Japanese yen

The price of euro yesterday showed growth against the background of statistics on reduction of volume of purchases of mortgage bonds to 3.126 billion euros against 5.078 billion previously. In addition, the volume of industrial production in Germany rose in October by 0.2%, in line with expectations, while the index of investor confidence in the euro area in December rose to -2.5, that was better than the previous figure -11.9. Today, it is worth paying attention to data on trade balance of Germany (07:00 GMT) and France for October (7:45 GMT). Special attention should be paid to statistics on wholesale inventories in the US (15:00 GMT). We maintain our medium-term negative outlook for the euro and admit the possibility of its growth only within the correction.

The British pound yesterday showed strong growth with the absence of important macroeconomic data. The reason for the increase of quotations became technical factors. Thus, the price adjusted upwards after reaching a 15-month low. The Bank of England published a report, according to which a gradual increase in the cost of borrowing should not affect the recovery of the UK economy. Today will be published important data on industrial production in the United Kingdom (09:30 GMT), which can lead to a strong price movement. We look forward to continuing the downward price movement in the near future.

The price of the Japanese yen strengthened against the weakening of the US dollar as well as in connection with the statement of Finance Minister Taro Aso, in which he noted that the economy is not in recession, despite the publication of GDP data showing that in the 3rd quarter the country's economy declined by 0.5%. We recall that in addition to reducing consumption in the country against the background of the sales tax, the negative was the fall in investments. According to our estimates the strengthening of the yen is only a correction and its fall will resume in the near future. Our medium-term negative outlook remains unchanged.

The price of the Australian dollar continues to fall and is trading around the level of 2010 year. The main reason for the decline is the fall in commodity prices, which are the main export goods of Australia. So, yesterday the negative became the data showing that imports into China declined by 6.7%. Today have been published data on the index of business confidence in Australia, which decreased by 4 to 1 in November. Tomorrow is expected the increase in volatility after the publication of statistics on inflation in China. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions.

The price of the New Zealand dollar after the sharp decline continues to consolidate below 0.7660. The reason for the weakness of the national currency of the country remains the fall in commodity prices and agricultural products. Growth of price volatility is expected tomorrow after the publication of data on inflation in China, as well as in connection with the statement of the Reserve Bank of New Zealand on monetary policy, which is likely to lead to another reduction in prices. Our medium-term outlook remains negative and we keep the medium-term negative outlook.

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