10.03.2016 - The RBNZ reduced its interest rate
Currency trading and the euro. The price of euro started to decline amid expectations of today's ECB decision on interest rates (12:45 GMT), and a press conference by ECB President Mario Draghi (13:30 GMT), during which he is likely to announce the strengthening of incentives that lead to a sharp decline in the euro against the US dollar. It is expected that interest rates will be lowered to -0.40% and the volume of monthly asset purchases in the euro area will grow from 60 billion euro to 70-80 billion euro. Other news today will not have much impact on investor sentiment. We maintain our medium-term negative outlook on the euro and expect a strong movement today.
Currency trading and the British pound. The price of the British pound is falling against the strengthening of the US dollar and an expected weakening of the euro. In addition, investors do not have the drivers for the growth of price and to the market returned speculations regarding the issue of the country exiting the Eurozone after the referendum on 23 June. Yesterday was published statistics on the volume of industrial production, which showed an increase by 0.3% in January from -1.1% in December and was the first increase in the index for 3 months. We maintain our medium-term negative outlook and expect the fall in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen is falling today on the background of strengthening the US dollar before the ECB’s statement on monetary policy in connection with the rise in oil prices, which reduces the demand for defensive assets. Tomorrow in Japan will be published statistics on the index of business sentiment in large industrial companies that can influence the dynamics of prices. We expect strong price movements today and maintain the medium-term negative outlook on the yen.
Currency trading and the Australian dollar. The price of the Australian dollar continued to rise against the background of rising oil prices, which supported other commodities, the export of which is of key importance to the Australian economy. It is worth noting that in the case of a change in the dynamics of the market of commodities, the Australian currency is likely to show a strong decline in the absence of new drivers for growth. Strong influence on the mood of investors will have statistics on industrial production in China, which will be published on Saturday. Our medium-term outlook remains negative and we expect the resumption of the negative dynamics in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar today showed a sharp decline after the Reserve Bank of New Zealand decided to reduce the interest rate by 0.25% to 2.25%. In addition, lowering of interest rates may continue due to the deteriorating global economic outlook, slowing growth in China and other developing countries. In connection with this step, we expect the fall of the price of the New Zealand dollar in the near future and maintain the medium-term negative outlook.