11.03.2016 - The euro unexpectedly rose after the press conference of Mario Draghi
Currency trading and the euro. The price of euro yesterday fell after the announcement of the ECB's lowering of interest rates, where the deposit rate fell by 0.10% to -0.40%, the refinancing rate was reduced by 0.05% to 0.00%. It is worth noting that after the speech of Mario Draghi, the euro began to grow in spite of the increase in the asset purchase program by 20 billion euro to 80 billion euro per month. Within the program will also buy corporate investment grade bonds. Since July, four long-term refinancing programs with a term of 4 years will be launched. Despite the news reason for the decline was the statement if the ECB’s chairman that the interest rates will not decrease in the future, leading to speculation about reduction of instruments to fight deflation. Despite the recent growth, the ECB's monetary policy has been softened and in case of the Fed's hawkish rhetoric in the statement, which will be published on March 16, we can see a strong decline of the European currency. Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound showed strong growth of volatility yesterday, amid the euro’s fluctuations. Following the recent increase, the upward momentum may lead to a further increase in prices, but its potential is limited. Today will be published statistics on the trade balance, consumer expectations on inflation and the country's volume of production in the construction sector. Risks associated with the referendum on Britain's membership in the European Union that will take place on June 23 will put pressure on the price of the pound in the coming months, after which growth can resume.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened yesterday amid the US dollar's decline against the euro after the press conference of the ECB President Mario Draghi. Today, the yen resumed the fall on the background correction, as well as in connection with the publication of negative statistics on the index of business sentiment in large industrial companies of Japan, which fell in Q1 to -7.9, versus growth forecast to 4.2. Strong influence on the dynamics of the yen on Monday, will provide data on industrial production in China, which will be released over the weekend. We maintain our medium-term negative outlook on the yen.
Currency trading and the Australian dollar. The price of the Australian dollar after the recent correction almost regained positions. Investors continue to assess the possibility of reducing the RBA interest rates to support economic growth in the country. The investors are in no hurry to open new positions before the publication of important data on industrial production in China, which traditionally have a strong influence on the course of trading. Our medium-term outlook for the Australian currency remains negative and we are waiting for the price reduction in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar recovers positions against the background of the weakening of the US dollar yesterday. Earlier this week, the RBNZ decided to lower interest rates by 0.25% to 2.25%, which was the reason for the sharp decline of the local currency. Also today, was published data on the index of business sentiment in the manufacturing sector of the industry in New Zealand, which fell against the backdrop of the deteriorating situation in the dairy sector. Our medium-term outlook remains negative and we expect a further fall in prices.