16.03.2016 - Volatility will rise after the Fed statement
Currency trading and the euro. The price of euro continues consolidation today due to the expectation of the Fed's monetary policy. Positive data on inflation and the labor market in the country has lead to increased probability of raising interest rates at the next Fed meeting. Today we do not expect a change in monetary policy settings in the United States, but the head of the Fed rhetoric may point to further tightening by the regulator, which will lead to an increase in the US dollar and the fall of euro. Today is also necessary to pay attention to the important statistics on the consumer price index, housing market (12:30 GMT) and industrial production in the US (13:15 GMT). Our medium-term outlook for the euro remains negative and we expect strong price movement today.
Currency trading and the British pound. The price of the British pound continued to fall after the poll results were published, according to which 52% are in favor of the UK exit from the EU and only 45% will vote against such a decision. It is worth noting that the results of the polls in the coming months will have a strong impact on the course of trading and volatility will remain high. Today, it is worth paying attention to statistics on the labor market in the UK (09:30 GMT). Our outlook on the British pound in the coming months remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen has weakened against the dollar after the Bank of Japan's head gave a speech during which he said that the easing of monetary policy should lead to a decrease in the yen. At the same time Haruhiko Kuroda said that interest rates may be lowered to -0.5%. In addition, the dynamics of trading will be affected by the expectations of today's statements by the US Federal Reserve on monetary policy. We forecast a drop in the price of the yen in the medium term, and after a long consolidation there is a high probability of strong price movement.
Currency trading and the Australian dollar. The price of the Australian dollar is reduced due to the weakening of oil prices, which has traditionally had a strong impact on the national currency of a country that depends on exports of raw materials. At the same time, the quotations of the currency are under pressure of expected today statement of the Fed on monetary policy. Today we expect increased volatility following the publication of statistics on the labor market in the country that can support the Australian dollar quotes. We maintain our medium-term negative outlook for the Australian dollar and the likelihood of its decline in the near future has increased significantly.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar today showed strong decline due to falling commodity prices, the expectation of the Fed's hawkish rhetoric during today's statement and publication of data on balance of payments of the country. Thus, in the 4th quarter current account deficit totaled 2.61 billion vs. predicted 2.97 billion. Tonight (21:45 GMT) will be published data on the GDP of New Zealand for the 4th quarter, which may also lead to strong movements on the market. Our medium-term outlook remains negative.