16.05.2014 - Controversial statistics from the U.S. has led to an increase in market volatility
of euro after the strong decline on positive data on the U.S. labor market has
returned to previous levels. The consumer price index in the euro area totaled
0.7% in April, coinciding with analysts' expectations, and the euro area GDP in
the 1st quarter of the year increased by 0.2%, against the forecast of 0.4%
growth. Weaker in this period appeared the French (0.0%) and Italian economy
(-0.1%). German GDP grew by 0.8%, which is 0.1% better than expected. Today the
course of trading may be influenced by data on the trade balance of the
Eurozone (09:00 GMT). We expect additional measures to deal with low inflation
The price of the British pound also declined amid rising dollar, but won back the lost positions and began to grow. The index of leading economic indicators rose in March by 0.3%, against 0.4% in February. Due to the lack of important macro today, the course of trading will be again influenced by the U.S. data - statistics on the housing market (12:30 GMT), and the Consumer Confidence Index (13:55 GMT). We expect continued growth of the pound in the long term but in the medium term, the price may continue to decline.
The price of yen continued to strengthen against the weakening U.S. dollar, after the release of weak data on industrial production in the U.S., its decline was due to a reduction in the energy sector amid improved weather conditions. The course of trading today will be affected by data on industrial production in Japan (04:30 GMT). We expect a recovery of USD/JPY growth in the near future and maintain medium and long-term positive outlook for the pair.
The price of the Australian dollar keeps moving in the corridor 0,9320-0,9400. The course of yesterday was influenced by increased volatility of the U.S. dollar associated with positive data on the labor market and the fall in industrial production in the country. Today the course of trading will also be affected by data from the U.S. We expect a decline in the national currency of Australia in the medium term due to the possibility of taking measures to deal with low inflation.
The price of the New Zealand dollar corrected downwards and continued to move through the corridor 0,8600-0,8690. The dynamics of the pair can negatively be affected by the data on reduction of foreign direct investment in China by 0.5% to 5.0% in April. On Monday, we should pay attention to the producer price index in New Zealand. Further growth of the New Zealand dollar is limited and we expect new signals for opening positions.