10.11.2014 - The correction of the dollar has led to growth of major world currencies
The price of euro corrected upwards after the publication of data on the US labor market, which was the central event of the past week. Thus, investors decided to fix positions before the weekend. In general statistics on the labor market of the world's largest economy remains strong. Thus, the unemployment rate fell to its lowest level since 2008 - 5.8%, which is 0.1% better than expected, and the number of jobs outside the agricultural sector that rose by 214 thousand, compared with an expected 235 thousand. At the same time, wages rose by 0.1% in October, compared with an expected growth of 0.2%. Industrial production in Germany rose by only 1.4%, which is 0.7% worse than forecast. Today the course of trading may be affected by the data on the index of investor confidence in the Eurozone (09:30 GMT). Volatility will be low due to the holiday in the US and France tomorrow. Our medium-term view on the euro remains negative.
The price of the British pound is corrected upwards amid weakening of the US dollar. The growth of quotations is observed despite weak data on the country's balance of trade deficit which in September rose to 9.8 billion, against an expected growth to 9.4 billion. The slowdown in economic performance in the UK postpones the time of rising interest rates by the Bank of England. Today we expect low volatility during the trading. The key event of the week will be the publication of data on the labor market in the UK on Wednesday. Particular attention will be paid to the growth rate of wages. We maintain a positive medium-term outlook for the British Pound and expect the resumption of an upward trend.
The Japanese yen started to correct amid weakening of the US dollar. It is worth noting that the reason for the decline of the Japanese currency quotations remains ultra-loose monetary policy aimed at achieving the inflation target of 2.0%. Today, investors decided to fix positions before the publication of a large block of macro tomorrow. Despite the holiday in the US, tomorrow we may see increased volatility following the publication of data on the balance of payments of Japan, the index of consumer confidence, orders for machinery equipment in Japan. Our outlook for the yen remains negative, but after a strong decline over the past weeks, we can see the price consolidation in the near future.
The Australian dollar strengthened and continues to grow due to the weakening of the dollar against the background of fixation of positions after the release of data on the US labor market, as well as due to the news on the growth of exports in China, which is the main trading partner of Australia. Thus, the trade surplus in the US rose in October to 45.4 billion, against an expected growth to 41.6 billion and the previous value of 31.0 billion. Tomorrow we should pay attention to the data on the index of business confidence in Australia. Correctional growth of the Australian dollar may continue in the near future, but our medium-term outlook remains negative.
The New Zealand dollar continued to correct upwards due to a number of factors. Thus, investors fixed positions ahead of the weekend amid falling US dollar. On the other hand positive for investors was the news on the growth of China's trade surplus, which indicates the improvement of the economic situation of the main trade partner of New Zealand. At the moment, there is a great possibility of renewed downward movement. We maintain a medium-term negative view of the New Zealand dollar.