18.05.2016 - Market attention will be paid to the Fed meeting minutes
Currency trading and the euro. The price of euro showed decline today after yesterday was published positive data in the US. Thus, the consumer price index rose by 0.4% in April, against the forecast of increase by 0.3%. This fact reinforces the likelihood of the Fed raising interest rates in earlier periods. In addition, the number of housing starts in the US rose to 1.17 million vs. expected 1.12 million. The volume of industrial production in the US unexpectedly rose by 0.7% last month, after declining by 0.9% in March. Today, the dynamics of trading will affect the data on consumer price index in the euro area (09:00 GMT) and the publication of the previous Fed meeting minutes (18:00 GMT), which has traditionally had a strong influence on the course of trading. Our medium-term outlook remains positive for the euro.
Currency trading and the British pound. The price decline in the British pound resumed in connection with the strengthening of the US dollar, after publication of data on inflation in America. Today, the dynamics of trading will affect the news on the labor market in the UK (08:30 GMT). It is worth noting that according to opinion polls the majority of voters in the UK support the country's membership in the European Union. In this regard, we recommend the use the fall of the British currency to accumulate long positions, but in the coming weeks speculations on the referendum issue may intensify that may lead to a sharp fall of the British currency.
Currency trading and the Japanese yen. Price of the Japanese yen significantly strengthened after the publication of preliminary data on the growth of the country's GDP. So, the Japanese economy in the first quarter expanded by 0.4%, which is 0.3% more than the forecast of analysts. This fact will ease the pressure on the Japanese authorities on the need to launch more stimulus measures. Tomorrow the summit of G-7 countries will start, where will discuss currency regulation, which can lead to an increase in the volatility of the yen. Our medium-term outlook for the Japanese currency remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar after the recent upward correction resumed falling, despite the positive statistics on the index of leading economic indicators by 0.2%, compared with a decrease of 0.1% in the previous period. The negative for the Australian currency was slowing wage growth to 0.4%, which is 0.1% less than the previous value and the analysts' forecasts. In case of the fall in commodity markets, reducing the Australian currency will accelerate. We maintain our medium-term negative outlook, but do not rule out an upward correction.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar keeps consolidating, and may continue to decline in the near future. It is worth noting that the producer price index at output in New Zealand fell to -0.2% against the forecast of growth of 0.4% in the first quarter. Low inflation is one of the incentives to reduce the RBNZ interest rates, which will be negatively displayed on the price of the local currency. Our medium-term outlook for the New Zealand dollar remains negative.