Currency trading and the euro. The price volatility of the euro has shown growth, but as a result renewed decline against the US dollar. It should be noted that the reason for the growth of the euro was the weakening of the US currency after on Friday was released statistics on retail sales in the US, which showed zero growth vs. an expected increase by 0.4% and the previous growth by 0.8%. Today, the dynamics of trade can affect the data on the index of business activity in the manufacturing sector of New York (12:30 GMT). Tomorrow will be published important statistics on consumer prices in the US that can greatly affect investors' expectations regarding the timing of the Fed raising interest rates. We forecast a decline of the euro in the near future and medium term.
Currency trading and the British pound. The price of the British pound continued its decline amid negative expectations of pressure on the country's exit from the EU, which will hit the UK’s economy. In addition, on Friday was released the data on production in the construction sector of the country, which fell by 0.9% in June against the expected growth of 0.9%. Investors are waiting for the publication of reports on inflation in the UK tomorrow and the labor market in the country on Wednesday. Our medium-term outlook remains negative and the potential of a possible correction is low.
Currency trading and the Japanese yen. The price of the Japanese yen remained virtually unchanged despite the unexpectedly weak performance of the Japanese economy in the second quarter. Thus, the country's GDP showed zero growth, which is 0.2% worse than expected. The reason for this result was the decrease in personal spending and exports. On the dynamics of trading today will also affect news on industrial production for June. Earlier, the Japanese government decided on stimulation measures for 28.1 trillion yen, which should speed up inflation, but at the moment, the yen continues to rise against the background of a strong interest in defensive assets. Our medium-term outlook remains negative for the yen, and the potential for further strengthening has decreased.
Currency trading and the Australian dollar. The price of the Australian dollar fell against the US dollar on the background of weak statistics from China, which is the main trading partner for Australia. Thus, the volume of industrial production grew by 6.0% in July, which is 0.2% less than the forecast. Rising oil prices may not lead to a change of the negative dynamics. Tomorrow will be released minutes of the previous meeting of the Reserve Bank of Australia on monetary policy, which may enhance expectations of further lowering the key interest rate at the time of the next meeting. Investors also expect important statistics on employment in the country, which will be published on Thursday. Our medium term forecast is negative.
Currency trading and the New Zealand dollar. Price of the New Zealand dollar fell following the Australian currency. Investors fixed position after a strong growth in the previous weeks. Strong influence on the course of trading this week will be have the release of the report on unemployment in New Zealand on Tuesday night. The recent decline in the interest rate of the Reserve Bank of New Zealand coupled with expectations of further easing of monetary policy will continue to put pressure on the price of the local currency. Our medium-term outlook remains negative.