17.02.2015 - China will celebrate the New Year
The price of euro fell yesterday on news about another failure of the negotiations between Greece and its creditors. We recall that the before February 28, Greece must extend a loan agreement for 172 billion euros, but the Greek finance minister refused this step on the terms offered by the Eurogroup. It should be noted that the statistics on the euro area trade surplus pleased investors. Thus, the figure rose to 23.3 billion euros, against the forecast of 21.3 billion euros. Today, in the center of attention will be the summit of finance and economy ministers of the Eurozone, as well as data on the index of business confidence in the business circles of Germany and the Eurozone (10:00 GMT). We also recommend to pay attention to the statistics on the index of business activity in the manufacturing sector of New York (13:30 GMT). Our medium-term outlook for the euro remains negative.
The price of the British pound fell yesterday following the euro. Investors decided not to accumulate positions before publishing a large block of statistics on inflation (09:30 GMT), the reduction of which will encourage the Bank of England to keep the current policy settings. In case of rising inflation we can expect an earlier increase in interest rates, which will strengthen the price of the British currency. It is worth noting that on Wednesday will be published important statistics on the labor market in the country. We maintain our medium-term negative view on the British pound, but we expect strong growth of volatility in which quotations may grow to 1.55 in the near future.
The price of the Japanese yen has not changed much yesterday. On the one hand, investors reacted positively on data on GDP growth in the 4th quarter by 0.6%, which is 0.3% worse than the forecast, but significantly better than economic recession by 0.5% in the 3rd quarter of last year. Demand for yen was also supported by concerns about Greece's negotiations with its creditors, the failure of which will lead to the strengthening of the Japanese currency as a safe asset. Investors expect the statement of the Bank of Japan tomorrow, after which volatility is likely to grow. We maintain our medium-term negative outlook on the yen.
The price of the Australian dollar rose slightly after the publication of minutes of the previous meeting of the Reserve Bank of Australia, at which it was decided to reduce the interest rate by 0.25% to 2.25% due to the fall in interest rates in the world, weak economic growth and increasing the risk of unemployment in the country. Investors expect a hint of a possible further reduction of interest rates in the minutes, but did not find them there. We maintain our medium-term negative outlook on the Australian dollar and see no reason to change the trend in the near future.
The price of the New Zealand dollar continues to consolidate near the important level of 0.75. At the moment, we do not see drivers for the price movement. Chinese markets will be closed until 24 February in connection with celebrating the New Year. Macroeconomic indicators are improving, but the New Zealand dollar remains under the pressure of low export prices. We recommend to wait for the new signal for opening positions, but maintain a medium-term negative outlook.