12.12.2014 - Retail sales growth in the US the dollar has strengthened
The price of euro yesterday started to decline amid result of the second round of the program LTRO. Thus, the ECB said that the volume of transactions totaled 129.8 billion euros, billion compared to the forecast 148.2 and the previous placement of 82.6 billion. This situation points to the growth of liquidity on the market, but retains a high probability of starting the program of quantitative easing next year, which will lead to an increase in the balance of the ECB by € 1 trillion. It is also worth noting the positive statistics on retail sales in the US, which has led to strengthening of the dollar. So, in November figure rose by 0.7%, which is 0.3% better than the forecast of analysts. Today, the focus will be on the data on the level of employment in the euro area for the 3rd quarter (10:00 GMT) and statistics on producer price index (1330 GMT) and the index of consumer confidence in the US (14:55 GMT). Our medium-term outlook for the euro remains negative.
The price of the British pound yesterday corrected down against the strengthening of the US dollar after the release of data on retail sales in the United States. Despite this, the British currency quotes compensated the loss and the price has returned to the levels near 1.57. At the moment, we see potential for further reduction and probability of a trend change is growing steadily. Today, the course of trading will be affected by the data on the construction sector (09:30 GMT) and the index of leading economic indicators (10:00 GMT). Given the fact that today is the last trading day of the week, investors will not accumulate positions. We expect new incentives for opening positions.
The price of yen fell yesterday against the strengthening of the US dollar. Today, the demand for the Japanese currency rose slightly due to positive data on industrial production in the country, which in October rose by 0.4%, compared with an expected growth of 0.2%. It is worth noting that the demand for defensive assets is supported by investors' concerns about the prospects for further growth on the stock markets of the world. On Monday, will become known the results of the parliamentary elections in Japan. In case of victory of Prime Minister Shinzo Abe, who favors the further stimulating the economy, we expect further reduction of the yen. Our medium-term outlook remains negative.
The price of the Australian dollar could not continue an upward correction, and resumed its decline. The reason for the falling of the Australian currency was stronger US dollar. It should be noted that investors are also disappointed with statistics on industrial production in China. Thus, the growth rate slowed in November to 7.2%, which is 0.4% worse than forecast and 0.5% worse than the previous figure. Given the slower growth of the world economy, commodity prices continue to fall, that puts pressure on the Australian dollar. We recommend holding short positions and maintain a medium-term negative outlook.
The price of the New Zealand dollar could not continue to grow after yesterday's statement by the Reserve Bank of New Zealand that confirmed its intention on further tightening of monetary policy in the country. It is worth noting that the growth of the US dollar and statistics on reduction of the manufacturing PMI in the country to 55.2 in November against 59.3 in October have led to a resumption of the downward movement that is likely to continue in the near future with a target at 0.75. We recommend holding short positions and maintain a medium-term negative outlook for the New Zealand dollar.