11.06.2014 - RBNZ may again raise the rates
of euro continued to decline yesterday after the statement of the head of the
central bank of Finland and the ECB Governing Council member Liikanen, who has
declared readiness of ECB to take additional measures to deal with the long
period of low inflation in the Eurozone. Among the methods of fighting
deflationary risks Liikanen called providing cheap loans to banks for up to
2016. Data on the growth of industrial production in France by 0.3% in April,
coincided with forecasts and did not affect the course of trading. At the same
time, wholesale inventories in the U.S. rose in April by 1.1%. After a strong
decline of the euro, we expect an upward correction, but keep a long-term
The price of the British pound fell following the euro. Data on industrial production in the country coincided with analysts' forecasts. The growth rate in April was 0.4%. Annual growth in industrial production by 3.0% appeared to be the greatest since 2011. Data on the labor market in the UK, which will be released today at 08:30 GMT, will lead to increased volatility. We predict that the price may fall to 1.67, but keep a long-term positive outlook.
The price of Japanese yen has stabilized around the level of 102.20. Investors ignored data on the growth of prices for corporate services to 4.4% in May and lower index of business sentiment in large industrial companies in Japan to -13.9, with an expected growth to 14.1. Monetary policy of the Bank of Japan remains ultra-soft, which gives reason to expect a further weakening of the yen against the U.S. dollar in the medium and long term.
The Australian dollar continued to strengthen amid rising consumer confidence index in June by 0.2%, against a decline of 6.8% in May. Tomorrow will be published data on unemployment in Australia, which traditionally will increase volatility on the market. Growth potential is very limited and we expect the resumption of the downward movement in the medium term.
IMF declared a large-scale growth of the economy of New Zealand, which positively affects the dynamics of the New Zealand dollar. Among the risks to the economy remains a slowdown in China and Australia. At the same time high demand for risky assets and the country's historically high volumes of trade help to strengthen the national currency. Despite this, growth is limited by the policy of the Reserve Bank of New Zealand that declares its readiness to interventions to reduce the exchange rate. Today at 21:00 will be published a statement of the Reserve Bank of New Zealand in which may be announced the next interest rate hike by 0.25%. We expect lower prices in the near future.