13.08.2014 - Traders are waiting for data on retail sales in the United States
The price of euro declined yesterday on the background of a significant deterioration in the index of business confidence in Germany - to 8.6 in August against 27.1 in July. A similar indicator in the Eurozone fell to 23.7 against 48.1 in the previous month. Index of optimism in small business in the United States grew by 0.7 to 95.7, and the number of vacancies has increased by 110 thousand, to 4.67 in June. Today, the focus will be on statistics on the consumer price index in Germany (06:00 GMT), industrial production in the Eurozone (09:00 GMT) and retail sales in the United States (12:30 GMT). Weak economic figures of the euro area, the Ukrainian crisis and the tightening of monetary policy of the USA, give reasons to keep medium-term negative outlook for the euro with the objectives of 1.32 and 1.28.
The price of the British pound started to grow due to technical factors, and fixation of short positions before the speech of the head of the Bank England on monetary policy (09:30 GMT). Investors expect hints on specific terms of interest rate hikes by the regulator. An important role will play today a report on unemployment in the country (08:30 GMT). Given the long-term decline of the British pound, we expect continued correction in the near future, but recommend opening positions after the speech of the head of the Bank of England. Medium-term outlook also remains positive.
The Japanese yen decline ceased and traders now expect development of the situation with Russian humanitarian aid to the war zone in the east of Ukraine. The price of the Japanese currency remains stable, despite the release of data on reduction of the country's GDP in the second quarter by 1.7%, in line with analysts' forecasts, but much worse than the growth of 1.6% in the first quarter. The minutes of the previous meeting of the Bank of Japan noted that consumption has fallen significantly more than after the previous increase of the sales tax in 1997, the negative impact of this increase will be gradually reduced, and among the risks are geopolitical tensions and problems of the Chinese housing market.
The Australian dollar strengthened after the release of data on the growth of the index of consumer confidence in the country by 3.8% in August, compared to 1.9% in July. It is worth noting that traders expect the data on industry, investments and retail sales in China (5:30 GMT), the state of the economy of which affects the prices of the main export products of Australia and export volumes. Considering tightening of monetary policy in the United States, and the statements of the Reserve Bank of Australia on overvaluation of the national currency, we maintain a medium-term negative outlook.
The price of the New Zealand dollar continues to decline gradually. Investors are awaiting news from China. On the one hand on the quotation of the New Zealand currency are under the pressure of the statement of the Reserve Bank of New Zealand on considerable potential for reducing the currency and the deterioration of macroeconomic indicators. However, analysts expect the recovery in prices for the main export commodities of the country, including milk and dairy products. We expect the decline to end in the near future.