11.01.2016 - The decline of euro may resume
Currency trading and the euro. The price of euro stopped growing against the background of the lack of incentives for the fall of the US dollar. The situation in China continues to be volatile, but we do not anticipate movements similar to those that were during the last week. Today will be published statistics on the index of investor confidence in the Eurozone (09:30 GMT). Tomorrow the course of trading will affect the data from China and the speech of the deputy head of the Federal Reserve, Stanley Fischer. We expect the resumption of the negative dynamics of the euro in the near future and in the medium term due to the tightening of US monetary policy and its weakening in the euro area.
Currency trading and the British pound. The price of the British pound continues to gradually decline against the background of investors' confidence in saving parameters of the monetary policy of the Bank of England. In addition, many investors prefer to get rid of the British currency in connection with the expected speculations regarding the referendum on the exit of the UK from the European Union, which is negatively displayed on the price of the national currency. Today, investors' activity is low, and tomorrow we should pay attention to data on industrial production of the country. We maintain a medium-term negative outlook, but do not rule out a correction after a strong decline.
Currency trading and the Japanese yen. The price of the Japanese yen showed a strong decline against the background of the fall on the Chinese market and investors' fears about the state of the second-largest economy in the world. The demand for protective assets remains high, but according to our estimates the impact of geopolitical tensions in the Middle East and the Korean Peninsula will be temporary and the fall of the yen will be resumed amid a stronger US dollar. Our medium-term outlook remains negative, despite the opportunity to continue strengthening in the near future.
Currency trading and the Australian dollar. The price of Australian dollar shows a weak correction after the sharp fall in the previous days, which was due to the fall on the Chinese stock market as a result of deteriorating macroeconomic indicators. Tomorrow dynamics of trading will affect the news on China's trade balance. Low commodity prices and the strengthening of the dollar will continue to put pressure on prices in the near future and medium term, and we still recommend investors to hold short positions and maintain the medium-term negative outlook for the Australian currency.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued to decline against the background of the revision of the investment portfolio at the beginning of the year, as well as the negative impact of the news from China, which is a key trading partner. It is worth noting that the trade deficit, low prices for dairy products, the possibility of further reduction in interest rates RBNZ continue to put pressure on the price of New Zealand currency. Our medium-term outlook remains negative and we recommend holding short positions.