16.09.2014 - Data on industrial production in the United States weakened the dollar

The price of euro yesterday fell slightly on the background of weak data on euro area trade surplus, which in July fell to 12.2 billion against the forecast of growth to 15.9 billion. Moreover dollar weakened against other currencies in the world due to the unexpectedly weak growth of indicator of industrial production, which showed a reduction to -0.1%, while analysts expected an increase by 0.4% in August. Today, we can again see a decrease in the index of business confidence of the Eurozone (09:00 GMT), also today is worth paying attention to the producer price index in the United States (12:30 GMT). We maintain a medium-term negative outlook and expect the resumption of the downward movement of prices in the near future.

The British pound continues to consolidate in a narrow range. The reason for the low volatility is the expectation of a referendum on Scottish independence on September 18th, the results of which will lead to a strong price movement. We recommend to open long position in case of Scotland staying in the United Kingdom and to open short positions in case the opposite result. The focus of investors today will be on the data on consumer price index, producer price index and the house price index (08:30 GMT). We recommend to wait for the results of the referendum on Scottish independence, and only then make a decision to buy or sell.

The Japanese yen slightly corrected and strengthened after the release of weak data on industrial production in the United States. Volatility yesterday was quite low due to the holiday in Japan. Today, the focus of investors will be on the speech of the head of the Bank of Japan Haruhiko Kuroda. Traders expect the timing signals of launching new stimulus measures for the economy, which has weakened after the increase in the sales tax in April by 3% to 8%. We expect continued devaluation of the yen in the medium term, but assume the possibility of a sharp strengthening of prices in the case of growth of investment risks in connection with the referendum in Scotland and Ukrainian crisis.

After a sharp fall in the price of the Australian dollar and the achievement of the psychologically important level of 0.90, the price started to correct downwards. Strong negative factor yesterday was the data from China, where industrial production growth slowed to 6.9% in August, which is 2.1% less than the previous month. Support for the Australian currency has been provided by the statement of the Reserve Bank of Australia which noted that risks of growth in housing prices, which increases the possibility of an earlier raise of rates by the central bank. Despite this the low iron ore prices and a slowdown in China continues to put pressure on the currency quotes. We maintain a medium-term negative outlook.

The New Zealand dollar corrected upwards following the Australian currency. Support to the quotations also had a decline of the dollar due to a technical correction and weak macroeconomic data. Despite this, the currency remains under pressure in the trade deficit of the country and the risks of further slowdown in China. We expect continuation of falling prices in the near future with a target near 0.80.

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