18.03.2015 - Fed statement may strengthen the US dollar
The price of euro continues to consolidate above the level of 1.05. Investors expect today's publication of economic forecasts and the Fed's statement on monetary policy (18:00 GMT). Data on the housing market in the US published yesterday was contradictory. Thus, the number of housing starts fell by 0.18 million to 0.90 million, but the number of permits issued for construction of houses has increased by 0.03 million to 1.09 million. At the same time, the index of business confidence in the Eurozone rose to 62.4 euro area in March, against the expected 58.2. Today, the course of trading will also affect the data on the trade balance of the Eurozone (10:00 GMT). We maintain our medium-term negative outlook for the euro and the expected growth volatility.
The price of the British pound continues gradual decline and investors expect strong price movements in connection with the release of important statistics on the labor market in the country (09:30 GMT), which may lead to a change in the local negative trend to positive. Also today, the draft budget will be published UK (12:30 GMT), that can also affect the course of trading. Today is forecasted a strong rise in volatility due to news from the UK and the US, and we recommend to wait for an confirmation of the signal for opening new positions.
The Japanese yen continues to move within a narrow range due to the expectations of today's Fed statement on monetary policy. In case of refuse of the regulator from the wording of the "patience", the price of the Japanese yen will continue to fall. It is worth noting that the positive data on the country's trade deficit which totaled 0.64 trillion yen in February, against the expected 1.21 trillion, could not change the current dynamics. We maintain our medium-term negative outlook on the Japanese yen and expect a strong price movement today.
The Australian dollar resumed its decline and according to our forecasts can reach the target level of 0.75 in the near future. Statistics on the index of leading economic indicators in the country, which rose in January by 0.3%, which is 0.2% better than the previous figure, could not change the course of trading. Investors are still negative evaluate the impact of the economic slowdown in China and commodity prices on the national currency of the country. RBA also said noted the Australian dollar overvaluation. We maintain our medium-term negative outlook and recommend holding short positions.
The price of the New Zealand dollar continued to decline amid expectations of today's Fed statement on monetary policy (18:00 GMT), which may lead to a further strengthening of the US dollar. At the same time, the country's trade deficit totaled 3.19 billion, that is 0.07 billion worse than analysts' forecasts. The course of trading at the end of the day will also be strongly influenced by news on the GDP growth in the 4th quarter. We expect increased volatility and a further fall in prices is more likely.