10.12.2015 - The dollar weakened before the Fed meeting
Currency trading and the euro. The price of euro yesterday showed growth amid fixing of short positions on the euro due to expectations the US Federal Reserve meeting next week, after which the price can show a strong movement. It is worth noting that the further dynamics of the euro will depend on the Fed's rhetoric and plans for the further increase in interest rates. In any case, immediately after the rate increase, we can see a strong upward momentum, after which the decline of the euro will resume. Today, the dynamics of trading will affect data on the number of initial unemployment claims in the US (13:30 GMT) and the report on the federal budget of the USA (19:00 GMT). Tomorrow will be published an important statistics on retail sales in the United States. We expect increased volatility in the coming days and maintain a medium-term negative outlook.
Currency trading and the British pound. The price of the British pound strengthened yesterday against the weakness of the US dollar in anticipation of today's statement of the Bank of England on monetary policy (12:00 GMT), in which can be specified the regulatorâs plans about raising interest rates. In addition, price movements will be affected by the news on the trade balance of the country (9:30 GMT). After the recent growth, today we can see a price correction after the rising momentum. Our medium-term outlook remains negative and volatility will remain high due to the expectation of the Fed's decision on interest rates.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened yesterday in connection with the closing of long positions of the US dollar before the Fedâs statement on monetary policy, which will be published on December 16 as well as in connection with the completion of the year. In the near future the yen price dynamics will depend on the movement of the US dollar. The volatility is increased, but our medium-term outlook remains negative and we look forward to the resumption of sustained fall of the yen at the end of this month.
Currency trading and the Australian dollar. The price of the Australian dollar showed strong growth after the release of statistics on the labor market in Australia, where the unemployment rate fell by 0.1% and 5.8% against the forecast of growth to 6.0%. At the same time, employment increased by 71,400, compared with an expected decline of 10.0 thousand. It is worth noting that the increase was due to sectors not related to mining sector, which indicates an increase in the stability of the Australian economy. In spite of this, we maintain a negative medium-term outlook for the Australian dollar, and expect a high level of volatility in the coming weeks.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar rose strongly after Reserve Bank of New Zealand lowered interest rates for the fourth time this year to spur inflation in the country, which is 0.4%, well below the target range of 1-3%. The prices for the main export commodities remained low, despite the recent improvement of the situation. It is worth noting that the Reserve Bank of New Zealand, said about the possibility of further interest rate cuts next year if necessary. We maintain a medium-term negative outlook and are waiting for a signal to sell.