Volatility of the euro yesterday increased significantly due to weak data on the labor market in the United States, where the number of applications for unemployment benefits rose by 21 thousand, to 311 thousand. Decline of the dollar against the euro was short-lived and quotes returned to previous levels. Is also worth noting that the euro area GDP remained unchanged in the second quarter, while analysts had expected an increase of 0.1%. German GDP fell by 0.2%, compared with an expected fall of 0.1%. Today in the euro area is not expected to be released an important macro, and in France and Italy today, is a day off. The course of trading today can be affected by the data from the United States on producer price index (12:30 GMT), industrial production (13:15 GMT) and consumer confidence (13:55 GMT). On Monday, we should pay attention to the trade balance of the euro area. We expect the fixation of positions before the weekend. The medium-term outlook remains negative.
The price of the British pound stabilized after sharp decline yesterday. We recall that the reason for the decline was the comments of the head of the Bank of England regarding the fact that wage growth in the UK will be a key indicator to start raising interest rates. At the same time, wage growth forecast this year was reduced 2 times to 1.25%. Today, the central event of the day will be the publication of preliminary data on GDP of the UK (08:30 GMT). On Monday will be published data on the index of housing prices in the country. Upside potential of pound has dropped significantly on the background of statements regarding the possibility of a later increase in interest rates. Downward movement is likely to continue in the coming days, but we expect the beginning of upward correction in the near future.
The price of the Japanese yen slightly strengthened yesterday, despite the weak data on internal orders for machinery. Thus, the rate in June rose by 8.8% compared with an expected growth of 15.5%. Geopolitical trends continue to significantly affect the dynamics of the performance of the Japanese yen. Considering loose monetary policy of the Bank of Japan and the expectation of new stimulus measures, we maintain a medium-term negative outlook for the Japanese currency.
The price of the Australian dollar rose slightly against the weakening dollar after the publication of weak data on the labor market in the United States. On Monday in Australia will be published data on sales of new cars. Pressure on the Australian currency quotes have statements by the Reserve Bank of Australia on overvalued currency and a significant potential for reduction, as well as the tightening of monetary policy of the Fed, which leads to the strengthening of the dollar. We maintain a medium-term negative outlook for the Australian currency.
The price of the New Zealand dollar fell after yesterday's growth on the background of a weak labor market data in the United States. Today, the dynamics of trading again will be affected by the data from the United States. After a significant drop following the statement by the head of the Reserve Bank of New Zealand regarding considerable potential of the fall of the currency, we expect price correction, but in the medium term, quotes will likely continue to consolidate around current levels.