17.09.2015 - Markets are waiting for the Fed statement
Currency trading and the euro. The price of euro slightly strengthened after the publication of weak statistics on inflation in the US. It is worth noting that the steady improvement in the labor market, will have a major influence on inflation in the United States when deciding on interest rates. Thus, the rate in August was 0.1%, worse than analysts' forecasts, while core inflation was 0.1% for the month and 1.8% for the year, worse than expected figure of 1.9%. Today, investors are waiting for the Fed's decision on interest rates (18:00 GMT), but prior to its publication we should pay attention to the reports on the labor market and the housing market, as well as the US balance of payments (12:30 GMT). Our medium-term outlook remains negative, but today we can see a strong upward movement in case of saving interest rates at current levels.
Currency trading and the British pound. The price of the British pound showed steady growth and offset the losses of the previous day after a report on the labor market in the country, that has supported the British currency. Thus, the unemployment rate fell to 5.5% in July, which is 0.1% better than expected and the previous figure. Average wages also increased by 2.9%, which is 0.4% more than projected. Today, we should pay attention to the statistics on retail sales in the country, but will be activity of traders is tempered by the expectations of the Fed decision on interest rates. We maintain a negative view of the medium-term, and expect increased volatility tonight.
Currency trading and the Japanese yen. The price of the Japanese yen fell after the publication of the news regarding the credit rating downgrade of Japan by Standard & Poor's to A + from AA- previously. The reason was the weakening of the creditworthiness of the country in the last 3-4 years. Politics of Prime Minister Abe was unable to overcome deflation and revive growth. In addition, the OECD lowered its growth forecast for Japan's GDP in 2015 to 0.6%, which is 0.1% less than the previous forecast. Our medium-term outlook for the yen remains negative and we are waiting for a strong movement tonight.
Currency trading and the Australian dollar. The price of the Australian dollar continued its moderate growth against the backdrop of the weakening US dollar. Support for the Australian currency has been the stabilization of the stock market of China. Status of the Chinese economy greatly affects the Australian currency. Following the recent upward correction, quotes of the Australian dollar are likely to resume a negative trend in the near future. Tomorrow we should pay attention to the speech of the RBA, which traditionally may be negatively displayed on the Australian dollar. Today is forecasted the rise in volatility after the Fed's statement on monetary policy. In the medium term we expect a fall in the price of the Australian currency.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar has not shown strong price movement after the publication of the report on GDP growth. So, the economy expanded in the second quarter by 0.4%, which was 2 times more than the previous figure but 0.1% less than analysts' forecasts. The slowdown of the economy will probably force the Reserve Bank of New Zealand for the further easing of interest rates. We maintain a medium-term negative outlook and recommend holding short positions.