09.07.2014 - Minutes of the Fed in the spotlight

The price of euro continued to rise gradually amid controversial statistics published yesterday. Thus, Germany's trade surplus rose in May to 18.8 bln., against the forecast of 15.7 billion. The U.S. statistics have been mixed. The situation on the labor market continued to improve. The number of vacancies in May rose to 4.64 million, which is 0.11 million better than the forecast and 0.18 more than the previous month. Index of optimism in small businesses was 95.0 in July, or 2.3 worse than the forecast, and the volume of consumer lending declined significantly in May to 19.6 billion. Further price dynamics of the pair will depend on the content of the previous U.S. Federal Reserve meeting minutes, which will be published today (18:00 GMT). We expect the resumption of the downward movement in the near future and maintain a medium-term negative outlook.

British pound compensated yesterday's losses related with the weak industrial production data in the UK. Thus, the rate in May fell by 0.7%, while analysts had expected an increase by 0.3%. At the same time, GDP growth forecast from NIESR appeared 0.2% better than the previous indicator and totaled 0.9% in June. Housing prices may affect the course of trading, but the main event of the week will take place tomorrow, when will be released the statistics on the country's trade balance and the Bank of England will make a statement on monetary policy. We are positive about prospects of further growth of the pound.

Strengthening of the Japanese yen has stopped, despite the lower growth rate of the monetary base of the country, which in June increased by 3.0% against the expected 3.1%. Yesterday's growth the Japanese yen was driven by an increase in the trade surplus of the country to 0.38 trillion in May, against 0.13 trillion in April. Tonight is expected the increased price volatility, after the release of data on internal orders for machinery, tertiary index of business activity and consumer confidence index in Japan. The price of USD/JPY is likely to resume growth after the publication of minutes of the previous meeting of the U.S. Federal Reserve. We maintain a positive medium-term outlook for the pair.

The price of the Australian dollar stabilized around a strong level of 0.94. It should be noted that the consumer confidence index in Australia rose by 1.9% in July. Traders are waiting for data on the labor market, which will be released tomorrow and are in no hurry to build up positions despite the positive sentiment on the metals markets. We maintain a medium-term negative outlook for the Australian dollar and expect the start of falling tonight.

The New Zealand dollar reached 0.88 and traders need new signals to determine the future direction of the price movement. The producer price index in China was 1.1%, while consumer price inflation fell in June by 0.2% to 2.3%. In the evening (22:30 GMT), will be published the data on the index of business activity in the manufacturing sector of the country, and tomorrow the price changes will depend on the trade balance of the country's main trading partner - China. We predict that the price will continue to trade around the current levels in the near future.

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