11.03.2015 - Data from China disappointed investors
The price of euro continued to fall amid growing concerns about the relationship of Greece and creditors. Greek factor will continue to put pressure on the euro quotes during the next 4 months. Starting the program of quantitative easing also negatively affect the European currency. Statistics from the US showed a growth in the number of vacancies to 5 million, that is 0.12 million better than the previous figure. Today is expected the increase of volatility in connection with the speech of Mario Draghi (08:00 GMT), as well as the publication of the stress tests of major US banks (20:30 GMT). At the moment, we see no reason to change the negative dynamics of prices and save medium-term negative outlook on euro.
The price of the British pound continued to consolidate around the previous close levels. The speech of the Bank of England Governor Mark Carney did not have a strong effect on the dynamics of prices, despite the words on the possible lowering inflation target. Strengthening of the dollar on expectations the Fed raising interest rates in summer continues to put pressure on the British currency quotes. Today we expect a strong price movement after the publication of data on industrial production in the UK (09:30 GMT) and the forecast on GDP growth in the country (15:00 GMT). The potential for further drop fell, but the negative dynamics of the euro is a strong bearish factor. We recommend to wait for signals to open new positions.
The Japanese yen has strengthened within correction after a strong reduction of the previous days. The volume of domestic orders for engineering products fell by 1.7%, against forecasted decline of 3.9%. Demand for the yen is rising against the background of Greece talks with lenders regarding the restructuring of the country's debt. The yen is traditionally considered defensive asset and may show growth against the background of the deteriorating situation with the Greek debt crisis and the conflict in the east of Ukraine. Today, the course of trading will be affected by the news on the results of stress tests in the US (20:30 GMT). We maintain our medium-term negative outlook on the yen, but we can see it’s strengthening in the near future.
The price of the Australian dollar continues downward movement against the strengthening of the US dollar, falling prices for iron ore, gold and copper, which are key export commodities of the country. Today was published statistics on consumer confidence index, which fell 1.2% in March, after increasing by 0.8%, which was caused by a decrease in the interest rate of the Reserve Bank of Australia. The volume of industrial production in China in January showed a slowdown to 6.8%, which is 0.9% worse than forecast, and investment growth fell to 13.9%, which is 1.8% less than the previous figure. We expect a further fall in the price of the Australian dollar in the medium term.
The New Zealand dollar continued its decline after the Australian currency, as well as in connection with the publication of weak statistics from China's industrial production and investment. It is worth noting that retail sales in China in January showed a decrease in growth to 10.7% per annum, which is 1.2% less than the previous value. Falling prices for dairy products, which is a key export commodity group negatively impact the investor confidence. Today is expected the increase in volatility after the statement of the Reserve Bank of New Zealand on monetary policy (20:30 GMT). Our medium-term outlook remains negative and we recommend holding short positions.