11.11.2014 - The US dollar strengthened after a minor correction
The price of euro after ascending correction on the background of fixing positions, resumed falling due to increased investors' interest in the US dollar, which was caused by reaching historic highs on stock indexes of the country. The course of trading yesterday was influenced by the data on the index of investor confidence of Eurozone, which totaled -11.9, which was worse than the forecast of analysts by 5.0. Today in France and the United States is a day off, which will lead to lower volatility on the market. Despite this, the dynamics of trading can be affected by the by the data on the index of optimism in the US small business (12:30 GMT). We maintain a medium-term negative outlook for the euro and recommend holding short positions on the euro.
The price of the British pound continues a gradual decline after corrective rally yesterday. Demand for the dollar increased, leading to a reduction of the British currency. Yesterday was not published an important macroeconomic statistics, and today it was reported that retail sales in October, has not changed. Investors are in no hurry to build up positions before the publication of data on the labor market tomorrow. We forecast growth in demand for British currency in the near future and maintain a medium-term positive outlook, but assume the possibility of falling prices in the near future.
The price of the Japanese yen after yesterday's correction resumed a downward movement. The dynamics of trading is still affected by a decision on increasing the volume of purchases of government securities up to 80 trillion that will increase the money supply and therefore will continue to have a negative impact on the quotes of the national currency. On the other hand, investors prefer to invest in dollar assets on the background of the maximum values of the US stock market and the tightening of the monetary policy of the Fed. Statistics from Japan have been mixed. Thus, the current account surplus in Japan rose in September to 0.41 trillion, while consumer confidence index fell to 38.9 in October, that is 1.0 worse than in September. We confirm our negative medium-term outlook for the Japanese yen.
The Australian dollar resumed its decline against the strengthening of the US dollar. Stimulus for the sale of the Australian currency was also the statistics on the index of business confidence of the country, which fell to 4 in October against the previous value of 5. The index of house prices rose in Q3 by 1.5%, which is 0.4% less than the previous index and 0.1% worse than the forecast. Tomorrow we should pay attention to the data on consumer confidence in the country. We keep negative medium-term forecast due to the deterioration in the trade balance of the country and the strengthening of the US dollar.
The New Zealand dollar has corrected following the major currencies against the strengthening of the US dollar. News about signing a free trade agreement between China and South Korea was not displayed on the price dynamics of the New Zealand currency. Today is expected the increase in volatility after the publication of the report on the financial stability of the Reserve Bank of New Zealand and the speech of its head Graeme Wheeler (20:00 GMT). We maintain a medium-term negative outlook and recommend holding short positions.