12.08.2016 - Data from China was worse than expected

Currency trading and the euro. The price of euro showed decline against the US dollar amid expectations of the publication of important statistics on retail sales in the US (12:30 GMT). In addition, today, will be released reports on industrial production and GDP growth in the euro area (09:00 GMT), as well as the index of US consumer confidence from the University of Michigan (14:00 GMT). On the dynamics of the euro at the moment affect investors' expectations regarding the timing of the Fed raising interest rates, as well as speculation about the effects of the UK’s exit from the EU. Our medium-term outlook remains negative and we expect a continuation of the current decline in prices.

Currency trading and the British pound. The price of the British pound continued to decline after a minor consolidation, which was caused by the strengthening of the US dollar, as well as the pressure of deteriorating fundamentals in the UK, which will continue in connection with the exit of the country from the EU. Today, it is worth paying attention to the data on the volume of industrial production in the UK’s construction sector in June (08:30 GMT). On the one hand the construction industry, which was one of the drivers of growth for the UK economy will show weak results, but the effect of the referendum results will be shown in later months. Our medium-term outlook remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen declined against the US dollar, due to lower demand for defensive assets, which is caused by rising oil prices, as well as on the background of a stronger US dollar. Yesterday in Japan, was the day off today, and today investors returned to the market, which has led to an increase in activity. On Monday will be published important data on the growth of Japan's GDP in the second quarter and the volume of industrial production in the country in June. Given the ultra-loose monetary policy of the Bank of Japan in comparison with its tightening by the Fed, we expect the fall of the Japanese yen in the medium term.

Currency trading and the Australian dollar. The price of the Australian dollar today showed a negative dynamics due to the rise of the US dollar and the publication of weak data from China, which is the main trading partner for Australia. Thus, industrial production rose in July compared with the same period last year by 6.0%, which is 0.2% less than the forecast. During the same period, the volume of investment in fixed assets grew by 8.1% against the expected 8.9%. Growth in retail sales slowed to 10.2%, which is 0.3% less than the forecast. According to our forecasts, the fall of the Australian dollar will continue in the medium term.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar drops after the recent decision of the Reserve Bank of New Zealand to cut interest rates by 0.25% to 2.00%. This step traditionally has a negative impact on the dynamics of the currency. In addition, the central bank of the country noted the likelihood of further monetary easing in the near future. Additional pressure on the New Zealand Dollar was weaker data from China and the strengthening of the US currency. Next week will be released an important report on the labor market in the country. Our medium-term outlook remains negative and the current decline is likely to continue.

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