10.09.2015 - The Reserve Bank of New Zealand lowered interest rates to 2.75%
Currency trading and the euro. The price of the euro has strengthened in recent years, but then returned to the important level of 1.12 and continues to consolidate within a side corridor. It should be noted that support for the dollar yesterday was the news on the growth of the number of open positions on the US labor market to 5.75 million vs. expected 5.30 million. Today, we should pay attention to the statistics on the number of initial unemployment claims in the US (12:30 GMT). The price movement is constrained by the expectation of the Fed's decision on interest rates, which will be announced on September 17. In case of rate hike we will see the fall of the euro, but further dynamics will depend on rhetoric of regulator on the timing of further interest rate rises. Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound continues to consolidate above the important level of 1.5350 after a decline caused by weak statistics on the trade balance and industrial production. Thus, the trade deficit in July unexpectedly rose to 11.1 billion vs. expected 9.5 billion. Industrial production for the same period fell by 0.4% against the expected growth of 0.1%. These factors have a strong negative impact on the British pound. Today, investors are waiting for the statements of the Bank of England on monetary policy, which may lead to a strong price movement. We maintain a medium-term negative view on the British currency.
Currency trading and the Japanese yen. The price of the Japanese yen fell today after the announcement of the Bank of Japan on the success of the ongoing monetary easing measures on the economy. Inflation according to Mr. Kuroda will reach the target level of 2.0% until the autumn of next year, but the price of oil will have a strong influence on this indicator. Besides that, the representative of the ruling party said on the need to increase asset purchases by 10 trillion yen. The negative movement has also increased due to the weak statistics on volume of domestic orders for machinery, which fell by 3.6% in July against the forecast of growth by 3.4%. Our medium-term outlook for the yen remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar rose today against the background of positive statistics on the labor market in Australia, where the unemployment rate fell to 6.2%, which is 0.1% better than analysts' expectations. At the same time, support for the currency are the statements Premier of China as to what the government has taken the necessary measures to stabilize the markets and to reduce the possibility of any systemic risks. Our medium-term outlook for the Australian dollar remains negative, but soon is possible the correction of prices.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a strong decline after the statement of the Reserve Bank of New Zealand that has cut interest rates by 0.25% to 2.75%. In addition, the regulator noted the need for the further reduction of the national currency at low prices of export products and to sustain economic growth. Given these facts, we still recommend holding short positions and maintain the medium-term negative outlook for the New Zealand currency.