12.08.2014 - ​Investor sentiment have slightly improved

The price of euro after the correction again started to decline. At the beginning of the session investors were pleased with the news of a temporary cease-fire in the Gaza Strip, the success of the Kurdish forces in Iraq and the end of the aviation exercises near the Russian borders of Ukraine, and in the evening it became known on the agreement of the humanitarian mission of the Red Cross in the war zone in Ukraine. Today, the course of trading may be affected by the data on the index of business sentiment Eurozone (09:00 GMT), the index of small business optimism USA (11:30 GMT), the number of open positions (14:00 GMT) and report on United States federal budget (18:00 GMT). The overall situation has not changed with respect to the euro, and we expect further downward momentum in the medium term.

The price of the British pound stabilized above the strong level of 1.6770 yesterday and rose slightly on the background of positive statistics on the growth of the index of leading economic indicators by 0.6% in June, which is 0.1% better than in the previous month. UK retail sales in July fell by 0.3%, which is 0.5% better than in May. Tomorrow is expected the increase of volatility of the British pound, in connection with the publication of statistics on unemployment in the country. The potential for further reduction is minimal and we expect the resumption of growth of quotations in the near future in case of positive data on the labor market.

The price of the Japanese yen continues to decline amid falling geopolitical tensions in the world. Thus, the American airstrikes significantly improved the situation of the Kurdish forces, in the Gaza Strip once again has been established a cease-fire, and in the Ukraine will be sent the humanitarian mission of the Red Cross. It should be noted that the attack on a humanitarian mission in Ukraine may lead to the intervention of Russian troops in Ukraine, which will greatly enhance the geopolitical tensions and can lead to direct military conflict. Today, the course of trading may be affected by the data on industrial production in Japan (4:30 GMT), and tomorrow will be published data on the growth of GDP for the second quarter and the minutes of the previous meeting of the Bank of Japan. We maintain a medium-term negative outlook for the yen.

Fall in the price of the Australian dollar has slowed down today due to the positive statistics on the growth of the index of business sentiment in Australia up to 11 in July compared to 8 in June. At the same time, the index of the requested house prices rose to 1.8% vs. the forecast of 1.1%. Tomorrow we expect increased volatility after the release of statistics on industrial production and investments in China, which is the main importer of Australian goods. Due to the tightening of monetary policy and the Fed's weak macroeconomic data in Australia, we keep a medium-term negative outlook for the Australian dollar.

Strengthening of the dollar continues to negatively impact the quotes of the New Zealand dollar, which retains a negative trend following a statement of the Reserve Bank of New Zealand concerning the overvaluation of the national currency and the considerable potential of a fall. In addition, macroeconomic indicators point to a worsening of the situation on the labor market and in trade balance. Despite the low potential for further fall we can see a continuation of the downward movement in the near future.

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