12.09.2014 - Investors are waiting for further reduction of the yen
The price of euro strengthened slightly again yesterday amid stable inflation in Germany and France, where despite the decline in energy prices have risen the price for industrial goods, which was associated with the end of summer sales season. Statistics on the labor market in the United States disappointed investors. Thus, the number of initial unemployment claims rose to 315,000, against analysts' forecast 305,000. Today, trade dynamics will depend on the statistics on industrial production and employment in the euro area (09:00 GMT), as well as retail sales (12:30 GMT) and the index of consumer confidence in the United States (13:55 GMT). Our medium-term outlook for the euro remains negative.
British Pound continues to grow gradually, due to weaker-than-expected data on the labor market in the United States. At the moment, the price dynamics of the British pound depends on the news regarding the expectations of the result of the referendum on Scottish independence, which will be held on 18 September. If people will vote for rejection of the independence of the country, we recommend to open long positions and wait for the growth of quotations. Today we should pay attention to statistics from the United States and the data on the construction sector (08:30 GMT) and the index of leading economic indicators. We expect the result of a referendum on Scottish independence and then will make a mid-term prognosis.
The Japanese yen continued to fall after comments from Bank of Japan Haruhiko Kuroda, which increased confidence in the easing of monetary policy to stimulate the economy after the meeting of the Bank of Japan on 31 October. Today it was announced that industrial production in Japan for July rose by 0.4%, which is 2 times better than analysts' expectations. On Monday, is a banking holiday in Japan. We expect preservation of the current negative trends in the medium term.
The price of the Australian dollar continues to fall rapidly amid falling prices for iron ore in the world and fears that the weak inflation in China will reduce demand for commodities. Yesterday's data on reduction of the unemployment rate to 6.1% failed to change the mood of investors. Today at the end of the day we can see the price correction on the background of fixing of short positions ahead of the weekend. Our medium-term outlook remains negative with the objectives of about 0.90 and 0.89.
The price of the New Zealand dollar continues to decline steadily. Current trend is supported by the fall of the Australian dollar and speculation about the future prospects of the Chinese economy, which is a major importer of goods from New Zealand. Increase in the index of business sentiment in the country's industry by 3.0 to 56.5 could not improve the mood of investors. We expect a further decline of the currency price, but note the reduction potential of falling prices.