13.10.2014 - The dollar weakened against major currencies
The price of euro adjusted upwards amid weakening US dollar in connection with the investors' concerns about the negative impact of weak economic performance in China, Japan and the euro area, which may lead to a drop in exports of the United States. Keeping rates at the minimum level cannot help to cope with the negative outside of the USA. Today in the United States is the day off and after the decline of the previous trading sessions, we can see the upward price correction of euro. Today we should pay attention to the news of the meeting of finance ministers of the Eurozone. Despite the current upward movement of prices, we maintain a medium-term negative outlook for the euro and recommend holding short positions. Be careful with the currencies trading, remember about risks.
Currencies trading and British pound. The British pound corrected upward after it showed a drop in the last trading session of the week. Statistics from the UK, which was published on Friday, turned out to be controversial. Thus, on the one hand the country's trade deficit narrowed to 9.1 billion in August, that is 0.5 billion better than expected and the index of leading economic indicators rose 0.4% in August compared to growth of 0.1% in the previous period. On the other hand, the volume of construction fell by 3.9% in August, despite the forecast of growth in the sector by 0.5%. Today we expect a low volatility, but tomorrow it is worth paying attention to data on inflation in the country. We maintain our positive medium-term outlook for the pound.
Currencies trading and Japanese yen. The Japanese yen continued to strengthen in connection with the weakening of the US dollar amid fears of investors about the negative impact of weak growth in the world on the economy of the United States, as well as in connection with the increasing demand for deffensive assets as the yen. Analysts gradually reduced forecasts for global economic growth, which leads to a revision of investment portfolios towards safer assets. Today in Japan and the United States is the day off and price volatility will be reduced. We maintain a medium-term negative outlook for the yen, but admit the possibility of its further strengthening.
Currencies trading and Australian dollar. The price of the Australian dollar today began to sharply correct upwards not only due to the weakening US dollar, but also thanks to the data from China. Thus, the trade surplus in China fell in September to 31.0 billion, compared with an expected 41.2 billion, but it is worth noting the growth of exports by 15.3% and imports by 7%, which indicates a steady increase in domestic demand in China and the growth of orders for Chinese products abroad. Tomorrow we should pay attention to the data on the index of business sentiment in Australia. We maintain a medium-term negative outlook for the Australian dollar.
Currencies trading and New Zealand dollar. The price of the New Zealand dollar began to rise today following the Australian dollar. This growth is corrective and is supported by data on the growth of imports and exports in China, which is the main importer of New Zealand goods. In addition, the US dollar declines amid concerns about the negative impact of analysts' weak performance in the world on the American economy. We expect low volatility this week and maintain a medium-term negative outlook for the New Zealand dollar.