15.01.2015 - ​US retail sales have unexpectedly fallen

The price of euro continued its downward movement yesterday against the background of the decision by the European Court, according to which the ECB will be able to buy the assets to support the growth of the regional economy and to combat low inflation. At the same time, the fall was restrained by weak data on retail sales in the US, which in December fell by 0.9%, compared with an expected growth of 0.2%. Analysts had expected that people will spend more due to the reduction in fuel costs, but consumers have decided to increase savings. Overall, in 2014, retail sales rose by 4%. Today is worth paying attention to the statistics on the trade balance of the Eurozone (10:00 GMT), the Producer Price Index in the US and data on the labor market in the US (13:30 GMT). Our medium-term outlook remains negative and we recommend holding short positions on the euro.

The price of the British pound rose sharply yesterday amid a weakening US dollar after the release of weak statistics on retail sales in the United States. At the same time, further growth of quotations is limited by drop in the index of leading economic indicators of Great Britain by 0.3% in November. The price of homes in the UK increased by 11% compared to the same period of last year, which coincided with analysts' expectations. Until the end of the week the dynamics of prices of the British pound will depend on the data from the US and euro movement. We are waiting for confirmation of the signal for the opening short-term long positions, but maintain a medium-term negative outlook for the pound.

The Japanese yen resumed its decline against the US dollar amid falling retail sales in the United States, which has led to a weakening of the dollar. The producer price index in Japan in December was 1.9%, which is 0.3% less than the forecast. Domestic orders for engineering products in Japan in November rose by 1.3%, which is 3.5% worse than the forecast. Demand for yen is still supported by investors' concerns about the political crisis in Greece, as well as a slowdown in the world economy as a whole. We recall that the World Bank has reduced the forecast for global GDP growth to 3.0% in 2015, which is 0.4% less than the previous forecast. We maintain our medium-term negative outlook on the yen, but we can see its strengthening until the end of the month.

The Australian dollar has shown a steady growth after the data on the labor market in Australia. Thus, the number of employees increased by 37.4 thousand in December, compared with an expected growth of 5.3 thousand. At the same time, the unemployment rate fell by 0.1% to 6.1%. The falling US dollar has also supported the growth of quotations. Improvement in the labor market reduces the potential fall of the Australian currency, but we continue to maintain a medium-term negative outlook.

The New Zealand dollar has stabilized above 0.77 after US retail sales fell led to a decline of the US dollar. At the same time, the data on lending in China showed a slowdown in the credit market to 697 billion, against the expected 855 billion. The fall of the New Zealand currency is likely to continue in the near future and in the medium term against the strengthening of the US dollar and the weak statistics on the trade balance of the country.

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