10.06.2014 - Volatility on the markets remains low
First trading session of the week ended with lower euro on weak statistics and low trading volumes on the market. For example, in Germany and France and other European countries was a bank holiday, and the index of investor confidence in the Eurozone dropped by 4.3 points to 8.5. Analysts had expected growth of rate to 13.5. Today we should pay attention to data on industrial production in France in April (6:45 GMT) and Italy (08:00 GMT), as well as statistics on wholesale inventories in the U.S. (04:00 GMT). Today, the euro can correct upwards, but in the medium and long term decrease of quotes is likely to continue.
The price of the British pound slightly decreased on the background of low activity of traders. Retail sales in the UK in May grew by only 0.5%, compared with the previous figure of 4.2%. Data on the volume of industrial production in the country (8:30 GMT) can alter the course of trading today. Strong economic data from the United Kingdom, give reason to anticipate continued growth in quotes in the medium and long term, but today we can see the continuation of a downward correction.
Despite the large block of macro statistics, which was published yesterday, the price of the Japanese yen has not changed. The undoubted positive has become the GDP growth of 1.6% in Q1which is 0.2% more than analysts predicted. Today we saw a strengthening of the yen, despite the growth of the monetary base in May by 3.3%, which is 0.1% more than the forecast and reduced tertiary index in April by 5.4%, which is 2.1% more than analysts' forecasts. In April, many indicators showed unusual result, which was associated with an increase in the sales tax in the country by 3% to 8%. We forecast growth of quotations of USD/JPY in the long and medium term.
The Australian dollar has strengthened its position, which was caused by the growth of China's trade surplus in May to 35.9 billion against the forecast of 22.6 billion. We recall that most of products Australia sells to China. In Australia, yesterday was a day off and the activity of traders in this background was low. Support for the national currency of Australia was provided by data on the index of business confidence, which has made 7 points in May. Tomorrow we should pay attention to consumer confidence index for June (00:30 GMT). In the medium term, more probable will be a correction in prices of the Australian dollar.
The New Zealand dollar continues a gradual decline. After upward correction, traders fix their position. The main event of this week, which can affect further price movement will be a statement of the Reserve Bank of New Zealand on monetary policy (Wednesday 21:00 GMT). Growth potential of a pair is very limited due to the readiness of the regulator to currency interventions to deal with the high exchange rate. We are waiting for further decline in the New Zealand dollar prices in the medium term.