17.03.2016 - The dollar fell after the Fed statement
Currency trading and the euro. The price of euro shows growth amid weakening of the US dollar after yesterday was published a statement and the Fed's forecasts. Thus, interest rates have remained at the level of 0.25-0.50%, in line with expectations, but the forecast for US GDP growth has been lowered to 2.2% in 2016, which is 0.2% less than expected in December, at the same time, unemployment according to the Fed estimations will fall to 4.7% this year. It is worth noting that the Fed plans to raise interest rates twice this year, against the forecast of 4 increases in December. This fact was expected by the market, but the price of the dollar fell on given news. It is also worth noting the growth of core consumer price index in the US by 0.3% in February that is better than the expected growth by 0.2%, as well as data to reduction of the volume of industrial production in the last month by 0.5% against growth of 0.8 % in January. Today, the market will continue to assess the Fed's statement and affect of the course of trading will have data on the trade balance and the consumer price index in the euro area (10:00 GMT). Our medium-term outlook for the euro remains negative, despite the recent growth.
Currency trading and the British pound. The price of the British pound yesterday showed strong growth against the background of the weakening US dollar and short covering, reinforcing the upward momentum. Today the British Pound volatility will be saved in connection with the decision of the Bank of England on interest rates and the publication of minutes of the previous meeting of the Monetary Policy Committee of the Bank of England (12:00 GMT). It should be noted that the reason for the recent decline have become results of a survey according to which 52% in the UK are willing to vote for the country's exit from the European Union. This fact will continue to put pressure on the British currency in the coming months.
Currency trading and the Japanese yen. Japanese yen price greatly strengthened amid the weakening of the US dollar after the Fed's statement on monetary policy. Dynamics of price has not changed despite the weaker data on the trade balance of the country where a surplus was 0.17 trillion yen in February against the forecast of 0.24 trillion yen. Exports in the country fell by 4.0%, which was 5 consecutive decline. Tomorrow will be published the minutes of the previous meeting of the Bank of Japan. We maintain our medium-term negative outlook on the yen, despite the current strengthening.
Currency trading and the Australian dollar. The price of the Australian dollar showed strong growth against the background of weakening US currency. Additional incentives to increase were the growth in oil prices, as well as the publication of positive statistics on the labor market in Australia. Thus, the unemployment rate in February unexpectedly fell by 0.2% to 5.8%, vs. expected 6.0%, while employment grew by 0.3 thousand compared with the expected growth of 11 600 and a decline of 7.4 thousand in January. The potential for further growth is low and we expect the resumption of the negative dynamics in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed strong growth due to several factors, including the weakening of the US dollar, rising commodities prices and the positive statistics on the GDP of New Zealand whose growth was 0.9% in the 4th quarter of last year against the forecast of 0.7%. The potential for further increase is limited, but for the opening of new short positions we need to wait for the signal. We maintain our medium-term negative view on the New Zealand dollar.