13.11.2014 - The data on industry in China disappointed investors
The price of euro yesterday was unable to continue the growth and quotes resumed a downward movement on the background of data on industrial production in the euro area, which grew by 0.6% in September which agreed with analysts' forecasts. Insignificant influence on the movement of the dollar had data on wholesale inventories, which rose by 0.3%, which is also in line with expectations. Today trading dynamics will depend on the statistics of the consumer price index for October in Germany (07:00 GMT) and in France (07:00 GMT). Also the course of trading may be affected by the publication of the economic bulletin of the ECB (09:00 GMT) and data on the US labor market (13:30 GMT). Due to the loose monetary policy of the ECB and the strengthening of the US dollar, we reserve the medium term negative outlook for the euro.
The price of the British pound yesterday showed a decrease on the background of the statement of the Bank of England on inflation in which was noted a reduction of growth forecasts of the economy in 2015 and 2016. Thus, according to the Bank of England forecasts the economy will grow in 2015 by 2.9% and in 2016 by 2.6%, which is worse than the previous forecast of growth of 3.1% and 2.8% respectively. At the same time, it has been noted a high probability of reducing inflation to 1% or less in the next 6 months. Therefore we do not expect rising interest rates in the first half. It is worth noting that the unemployment rate in September was about 6.0%. Negative situation in the Eurozone will continue to put pressure on the pound quotations. In connection with the last inflation report we deteriorate the forecast on British pound and look forward to continuing negative dynamics in the coming months.
The price of the yen continues to move near a seven-year low amid speculation about the possibility of early elections in Japan and the postponement of the second increase of the sales tax from 8% to 10%, which is expected in October 2015. Moreover, the yen declines on the background of increasing its asset purchase program to 80 trillion yen in a year in connection with the growth of activity of exporters. It is worth noting the growth of industrial production in September by 2.9% against the expected 2.7%. We maintain a medium-term negative outlook on the yen and see no reasons to change the current trend.
The price of the Australian dollar showed growth in the last trading session, but today's data from China has led to fixation of positions and before long we may see continued downward movement of prices. Thus, the growth of industrial production in October slowed to 7.7%, which is 0.3% worse than the forecast, growth in fixed asset investment also slowed to 15.9%, against 16.1% growth in September. Retail sales in China in October, showed an annual increase of 11.5%, versus the expected 11.6%. These indicators and the crisis in the construction sector of China will put pressure prices of Australian exports of goods in the medium term. We maintain a medium-term negative outlook for the Australian dollar.
The price of the New Zealand dollar after a confident increase this week, has stopped the growth on the background of statistics of from China. Currently quotations are consolidated below the level of 0.79. Despite the weak data from China, investors were cheered by statistics on an index of business sentiment in the manufacturing sector of the country's industry, which rose to 59.3 in October, against the previous figure of 58.5. Despite the growth of quotations of the New Zealand currency, we estimate the potential growth as a minimal and maintain a medium-term negative outlook.