16.03.2015 - Investors are waiting for data on production in the US
The price of euro continues to decline after a minor correction. The reason for the weakening of the single European currency is the difference in the monetary policy of the ECB, which has launched a program of quantitative easing and the US, where it is expected the rise in interest rates. Today, the price dynamics will depend on the statement of the ECB President Mario Draghi (18:45 GMT), as well as statistics from the US on New York PMI (12:30 GMT) and industrial production (13:15 GMT). At the moment, we see no reason to change the negative trend to positive and recommend holding short positions. Our medium-term outlook remains negative.
The price of the pound accelerated fall after the release of data on the UK construction sector, where output fell by 2.6% in January, compared with an expected growth of 1.4%. Strengthening dollar and decline in the euro also contributed to the downfall of the British currency. Today, the course of trading will be affected by the data on the index of leading economic indicators in the UK (13:30 GMT). Given the expectation of rising interest rates the Bank of England until early next year, and the tightening of monetary policy in the United States, we maintain a medium-term negative outlook.
The price of the Japanese yen against the US dollar has stabilized despite its strengthening against most world currencies. At the moment, traders are not in a hurry to build up positions before the publication of statements of the Bank of Japan on monetary policy. It is worth recalling that a number of experts point to the low efficiency of further easing of monetary policy of the Bank of Japan. Despite the current stabilization of quotations, we maintain a medium-term negative outlook on the yen and see no reason to change the current trend.
Australian dollar price decline has stopped and showed a slight increase within the price correction. Support for the Australian currency was the correction of the US dollar, as well as statistics on sales of new cars in the country, which rose 2.9% in February, against a decline of 1.9% in January. Investors today will be restrained in the expectation of tomorrow's publication of minutes of the previous meeting of the Reserve Bank of Australia. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions in connection with the low prices of exports and weakening growth in China.
The New Zealand dollar started trading week with a slight increase, due to the price correction after strong fall at the end of last week. The national currency of the country is under the pressure of falling Australian dollar. The situation on the dairy market, which is a key export commodity group of the country, remains unstable. Volatility will be reduced before the release of data on GDP growth on Wednesday. We expect continued downward movement of prices in the near future.