12.01.2016 - Markets continue to monitor the situation in China

Currency trading and the euro. The price of euro weakened in the first day of the week in connection with the fixing of positions by investors after strong growth earlier and due to the strong report on the US labor market, which was published on Friday. It is worth noting that the strong employment data in the United States increases the probability of the Fed raising interest rates in March, which will strengthen the dollar. At the same time it should be noted that the data on the index of investor confidence in the euro area showed a decrease to 9.6 in January against 15.7 in December. Today, we should pay attention to the speech of the deputy chairman of the Fed Stanley Fischer (10:30 GMT) and data on small business optimism in the US (11:00 GMT). Our medium-term outlook for the euro remains negative with the potential of reach parity against the US dollar.

Currency trading and the British pound. The price of the British pound yesterday showed a minor correction, but then resumed its decline and in the near future is likely to continue negative trend. Today will be published an important report on the volume of industrial production (09:30 GMT). The effect on the mood of investors will also have the statement of the head of the Bank of England Mark Carney (14:15 GMT). Our medium-term outlook for the British pound remains negative, but at any time we can see a correction on the background of fixing position after a heavy fall.

Currency trading and the Japanese yen. The price of the Japanese yen continues to consolidate after the strong growth caused by the increased interest of investors in the defensive assets in connection with the publication of weak statistics in China, the decline on the stock markets of the country and the weakening of the yuan. Geopolitical tensions in the Middle East and the Korean Peninsula will have less impact on investor interest in the yen. Japan's current account surplus in November was 1.42 trillion yen, against the forecast of 1.52 trillion yen. The consumer confidence index in December rose to 42.7, which is 0.1 more than the previous record. We look forward to strong price correction after a significant decrease of the yen earlier and maintain a medium-term negative outlook.

Currency trading and the Australian dollar. The price of the Australian dollar resumed its decline after correction due to the fall in commodity markets. A slight stabilization on the Chinese stock market supported investors, but the situation remains fragile, that adversely affects the course of trading. Strong influence on the course of trading on Thursday will have the statistics on the labor market in Australia that can support the national currency and can lead to a correction after a strong decline. We maintain a negative medium-term outlook for the Australian dollar.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar has stabilized after the strong decline in the previous days. The main reasons for the fall was unreasonably strong increase in the end of last year, the fall on the Chinese stock market and the weakening of the yuan, as well as the negative situation on the commodity markets. The weak performance of the trade balance and low inflation may lead to a further reduction in interest rates of RBNZ. Our medium-term outlook remains negative and we recommend holding short positions.

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