15.05.2014 - The Japanese economy grew better than expected
The price of euro continues to consolidate above 1.3700. Price decline has stopped despite the negative data on industrial production, which fell by 0.3% in March, which coincided with forecasts of analysts. Today, the focus will be on data on GDP growth in the 1st quarter in France (5:30 GMT), Germany (06:00 GMT), Italy (08:00 GMT) and the Eurozone (09:00 GMT). In addition, special attention of traders will be focused on the data on the consumer price index of Eurozone in April (09:00 GMT), from which the ECB's monetary policy will depend. We maintain a long-term negative outlook for the euro.
The price of the British pound continued to decline, despite the positive data on labor market and the statement of the Bank of England. Thus, Mark Carney noted that the country's economy continues to develop but promised to keep interest rates low. The unemployment rate fell to its lowest level since February 2009 - 6.8%, in line with expectations. Today, the course of trading may be affected by the data on the index of leading economic indicators in March (09:00 GMT). We revise our medium-term outlook to negative, but we expect continued growth of price in the long term.
The Japanese yen continued to strengthen against the positive data on GDP growth in the 1st quarter to 1.5% compared with an expected 1.0%. Tertiary PMI in March rose by 2.4%, against a decline by 1.0% in February. Today the course of trading will be affected by the speech of the head of Bank of Japan and the data from the U.S. on labor market, the consumer price index in April (12:30 GMT) and industrial production (13:15 GMT). We expect the resumption of growth of USD/JPY and maintain medium and long term positive outlook.
The price of the Australian dollar fell sharply and compensated a significant portion of the previous growth. Investors continue to revise their portfolios due to the budget which plans to reduce spending and raise taxes. Furthermore, the negative impact on Australia's currency has the Chinese industry slowdown to 8.7% compared with an expected growth to 8.9%. We maintain a medium-term negative outlook for the Australian dollar.
The price volatility of the New Zealand dollar remains at a high level. The index of business activity in the country totaled 55.2 in April, against 58.4 in March. In addition, the attention of traders today was focused on the publication of the draft of the state budget, which was positively perceived by the market. We need new signals to determine future price movements, but overall downside potential of the New Zealand dollar is limited.