12.08.2015 - Yuan continued to decline
Currency trading and the euro. The price of euro showed a high level of volatility on news on an agreement to provide Greece the third bailout package of 86 billion euros during a term of 3 years. At the same time, investors were pleased with the statistics on the index business sentiment in the euro area, which rose to 47.6 in August against the expected 43.9. Despite the positive on the euro, the price could not continue to grow and resumed falling against the strengthening of the US dollar and technical factors. Today, the course of trading will be affected by the data on the volume of industrial production in the Eurozone (09:00 GMT) and the number of open positions in the US (14:00 GMT). The mood of investors will also be affected by the speech of President of the Federal Reserve Bank of New York, William Dudley (12:30 GMT). We forecast a drop in prices in the medium term and in the near future.
Currency trading and the British pound. The price of the British pound reduced after unreasonably strong upside. At the moment, the price of the British pound continued to consolidate due to the anticipation of the important statistics on the labor market (8:30 GMT), which traditionally has a strong effect on the course of trading. In case of improving the employment situation, we are likely to see strong upward movement. Our medium-term outlook remains negative and we expect lower prices in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline today. Publication of minutes of the previous meeting of the Bank of Japan did not have a strong influence on the course of trading. Several representatives of the Bank of Japan noted the reduction of the effect of loose monetary policy. Support for the yen became the data on industrial production in Japan, which in June rose by 1.1%, which is 0.3% better than expected figure. At the moment, we see no reason to change the current negative trend and predict a further decline of price in the medium term.
Currency trading and the Australian dollar. The price of the Australian dollar continued its sharp decline following the weakening of the yuan by 1.6% today after falling by 1.9% yesterday. It is worth noting that the People's Bank of China has changed the methodology for calculating the exchange rate and will seek greater influence of market factors on the exchange rate. China is a major trading partner and consumer of Australian goods and the price of the yuan has a strong influence on the Australian dollar. The mood of investors was not improved by the news on the growth of the consumer confidence index by 7.8% in August against the fall of 3.2% in July. We expect a further fall in the price of the Australian dollar.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar reached its lowest level in six years amid the negative impact of falling prices of yuan and the Australian dollar. The country's economy is heavily dependent on exports and major trading partners are China and Australia. Tonight (22:30 GMT) will be published statistics on the index of business sentiment in the manufacturing sector of the industry in New Zealand. We recommend to hold the short positions and maintain the medium-term negative outlook.