11.08.2016 - RBNZ lowered the interest rate by 0.25%

Currency trading and the euro. The price of euro showed an increase amid the weakening of the US dollar after on Tuesday was published weak data on labor productivity in the United States. It should be noted that the statistics on the growth of the number of open vacancies in the US, which rose to 5.62 million in June against the forecast of 5.52 million was not able to change the mood of investors. Investors today will not accumulate positions ahead of the publication of statistics on the growth of GDP and industrial production in the euro area, as well as US retail sales, which can greatly affect expectations about the timing of the Fed raising interest rates. Our medium-term outlook for the euro remains negative and we expect the resumption of the fall in the coming days.

Currency trading and the British pound. The price of the British pound fell after the Bank of England could not buy the necessary amount of bonds within the quantitative easing program that is aimed to support the British economy. In addition, the Bank of England study pointed to the negative impact of the recent results of the referendum on the country's exit from the EU on capital expenditures, the dynamics of employment and trade. This trend will continue over the next year. Tomorrow we should pay attention to a report on production in the construction sector. Our medium-term outlook for the pound remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen stopped rise against the US dollar after the recent strengthening. Decreased activity is due to the holiday in Japan. Strong influence on the course of trading in the coming weeks will have the demand for defensive assets that can grow in the case of the fall on the stock markets. In the absence of important events in Japan, investors will keep an eye on external factors. Our medium-term outlook remains negative and we expect the resumption of the yen reduction in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar showed a rise in volatility after the Reserve Bank of New Zealand lowered its interest rate by 0.25% to 2.00% and stated the need to reduce the local currency. It is worth noting that the New Zealand and Australian economy are closely connected. Tomorrow the volatility will be increased in connection with the publication of important statistics on industrial production and retail sales in China, which is the main buyer of Australian exports. Our medium-term outlook for the Australian dollar remains negative.

Currency trading and the New Zealand dollar. Price of the New Zealand dollar today demonstrated a strong movement after the Reserve Bank of New Zealand decided to lower the interest rate by 0.25% to 2.00% in order to stimulate the growth of inflation and to reach its target range of 1-3% compared to the current 0.4%. Some experts predicted reduction of the rate at 0.50%, but this move could accelerate the growth of prices on the housing market, which is a risk to the financial system. Also, the bank said about the need to reduce New Zealand currency. We forecast a drop in the New Zealand dollar in the near future and medium term.

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