18.03.2016 - The dollar's decline continued yesterday

Currency trading and the euro. The price of euro continued to rise after the Fed statement on monetary policy, according to which the interest rates this year will raise 2 times, which is twice less than the in December’s forecast and the American economy will grow by 2.2% this year, which is 0.2% less than the previous forecast. Support for the euro has also become the news on core inflation in the euro area, which amounted to 0.8%, which is 0.1% better than expected. Today, the dynamics of trading can affect the data on the index of consumer confidence from the University of Michigan (14:00 GMT) and speeches by the Fed officials, which may lead to increased volatility. We maintain our medium-term negative outlook for the euro, and today we can see a drop on a background of fixation of long positions ahead of the weekend.

Currency trading and the British pound. The price of the British pound continued to rise and reached the important level of 1.4500. The reason for the growth of the weakening of the US dollar after the Fed statement. The Bank of England voted unanimously for keeping monetary policy settings at the same level and noted the steady growth of the economy at the level of the previous quarter, supported by domestic demand. After strong growth is likely to price correction, which can intensify the fixation positions before the weekend. Our forecast for the coming months remains negative due to the expectation of a referendum on the country's membership in the European Union.

Currency trading and the Japanese yen. Price Japanese yen continued to strengthen against the dollar and reached its highest level since October 2014. The reason for the growth was the weakening of the US currency after the Fed meeting. Today were published minutes of the previous meeting of the Bank of Japan in which was decided to decrease interest rates to -0.10%. It is worth noting that earlier the head of the Bank of Japan announced the possibility of lowering interest rates to 0.50%. The improvement in equity markets will reduce the demand for defensive assets. We expect the resumption of the negative dynamics of the yen in the near future and maintain the medium-term negative outlook.

Currency trading and the Australian dollar. The price of the Australian dollar continues to rise due to a number of factors including the weakening of the US dollar, rising commodities prices and the positive statistics on the unemployment rate which fell by 0.2% to 5.8%. Strengthening of the yuan also has a positive influence on the Australian currency due to the heavy dependence from the Chinese imports. On Monday will be published statistics on the index of leading economic indicators. Our medium-term outlook for the Australian dollar remains negative.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed strong growth following the Australian currency against the background of the same fundamental factors such as the weakening of the US dollar, rising commodities’ prices and the appreciation of the yuan. Strong data from the economy support the bulls, but weaker inflation may lead to a further reduction in interest rates of the RBNZ, which will put pressure on the price of the currency in the medium term. Our medium-term outlook remains negative.

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