15.10.2014 - The British pound has overcome the strong level of 1.60
The price of euro continued to fall yesterday in connection with the negative data on industrial production in the euro area, which showed a decline of 1.8% in August, which is 0.3% below the forecast of analysts. It should be noted that the index of business confidence in Germany showed a negative value for the first time since the end of 2012 and totaled -3.6, compared with an expected decline to 0.2. Similar index in the euro area fell to 4.1, which is 3.0 worse than analysts' expectations. At the same time, the index of small business optimism in the United States decreased to 95.3 in October, against 96.1 in the previous period, which stopped fall of the euro. It should be noted that due to lower growth forecasts for the global economy, investors prefer assets in dollars. Today the course of trading will be affected by the speech of Mario Draghi (18:00 GMT), retail sales and producer price index in the United States (12:30 GMT), and the publication of the Beige Book (18:00 GMT). We maintain a medium-term negative outlook for the euro and recommend holding short positions.
The British pound accelerated decline after the release of statistics on the consumer price index, that in September fell to 1.2%, which is 0.2 '% worse than the forecast and 0.3% less than the previous figure. The main reason for the decrease in the index has become lower fuel prices. Quotations of the pound are under the pressure of reduced forecasts for global growth and weak data from the Eurozone. Today is expected the increase of volatility in connection with the publication of data on the labor market in the UK (08:30 GMT). Despite the decrease in quotations below the critical level of 1.60, we expect the resumption of the price growth in the medium term.
The Japanese yen stopped to strengthen against the dollar growth. Despite the increase in risk on the markets associated with reduced forecasts for global growth, investors continue to negatively assess the outlook for the Japanese yen due to the divergence of monetary policy of the Fed, which is going to raise interest rates next year, and the Bank of Japan, which may soon launch new measures to support the economy. Despite the growth of demand for defensive assets as the yen, we expect further devaluation of the Japanese yen and maintain a medium-term negative outlook.
The fall of the Australian dollar has stopped this morning after a strong fall on the eve. The reason for growth of optimism was the data on consumer confidence in October, which rose by 0.9%, against a decline of 4.6% in September. New car sales in Australia increased by 2.9%. Despite the positive data, the Australian currency remained under the pressure of lower export prices and a slowdown in China. Reserve Bank of Australia is still considers national currency to be overvalued. We maintain a medium-term negative outlook and recommend holding short positions in the Australian dollar.
The price of New Zealand dollar fell against the strengthening dollar. Investors are negative about the prospects of the national currency of New Zealand on concerns about the growth of the Chinese economy and the world economy as a whole. Country's trade deficit and the intervention of the Reserve Bank of New Zealand for the depreciation of the New Zealand dollar lead to a further drop in prices. We maintain a medium-term negative outlook and recommend holding short positions.