13.06.2014 - ​Bank of Japan once again left the monetary policy unchanged

Amid rising volatility, the price of the euro continued its gradual growth. Yesterday the quotes of euro were supported by the data on the growth of industrial production in April by 0.8%, with an expected growth of 0.5%. On the other hand statistics from the U.S. was worse than expected. Thus, the number of initial applications for unemployment insurance in the U.S. rose to 317 thousand, that is 11 thousand worse than was expected and retail sales rose in May by only 0.3%, which is 0.2% worse than the forecast. Data on business inventories, which rose in April by 0.6%, indicating the weak demand and shows the risks of an economic slowdown. Today is expected the increase of volatility euro after the publication of reports on the trade balance and the level of employment in the euro area (09:00 GMT). Despite the current strengthening of the euro, we expect the resumption of the downward movement in the medium term.

On Monday, the central banks of Japan, England and Germany will present their regular reports. In addition, the course of trading on the first session next week will be affected by consumer price inflation in the euro area and U.S. industrial production.

Demand for the British pound rose strongly due to expectations of higher interest rates by the Bank of England. The bank representatives say that the economic indicators in the coming months will have a key influence on the future monetary policy of the country and that the rate hike can come earlier than is expected on the market. We recall that the data released on Wednesday showed the reduction of unemployment by 0.2% to 6.6% in April. The key event of the day today will be the release of data on the index of leading economic indicators (09:00 GMT). We expect continued growth of the British pound with a target of about 1.70.

Bank of Japan left monetary policy unchanged that resulted in a correction of the Japanese yen, after rising in the previous days. Today is also worth paying attention to data on industrial production in the country in April. Due to the increase of the sales tax by 3% to 8%, we see a slowdown in the industry by 2.8% in this period. We expect resumption of growth of USD/JPY in the medium term and maintain a long-term positive outlook due to the persistence of ultra-soft policy of the Bank of Japan, against reduction of the quantitative easing program of the U.S. Federal Reserve.

After a sharp decline in the Australian dollar after yesterday's release of data on the labor market in Australia, the price of the Australian dollar resumed the growth. It is worth noting that the increase in quotations is despite the continued fall in iron ore prices, which have already reached $ 92 per ton. Trading dynamics may change after the release of statistics from China on industrial production, the volume of investments and retail sales (5:30 GMT). Despite the recent growth, we maintain a medium-term negative outlook for the Australian dollar.

The New Zealand dollar has shown a sharp increase in prices after the statement of the Reserve Bank of New Zealand on increase of interest rates by 0.25% to 3.25% and the rate growth forecasts by 1% in the next 12 months. In addition was noted the negative impact of high exchange rate of the construction sector and foreign trade. At any time, the head of the RBNZ may re-announce the course to deal with the high cost of the national currency and quotes again will start falling. We expect a decline in the New Zealand dollar prices in the coming days within a correction after the strong growth.

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