19.01.2016 - Statistics from China deteriorated

Currency trading and the euro. The price of euro slightly changed yesterday because of celebration of Martin Luther King Day in the US. Today was published data on GDP and industry in China, which pointed to a slowdown in growth rates in the country, which may weaken the US dollar. The dynamics of trading today will also affect the statistics for the euro area balance of payments (09:00 GMT), the index of business sentiment and the consumer price index in the euro area (10:00 GMT). Investors will not rush to accumulate positions ahead of the publication of the report on inflation in the United States tomorrow, that will have a strong influence on the decision regarding the Fed raising interest rates in March. We maintain a medium-term negative outlook for the euro, despite a possible rise today.

EUR/USD Index of December 7

Currency trading and the British pound. The price of the British pound continued to fall against the background of the revaluation of the investment portfolios of investors in the beginning of the year. The main reason for the decline of the British currency became fear of the negative impact of a possible exit of the UK from the European Union after a referendum on the issue. At the same time, the slowdown in economic growth negatively is displayed on the quotations of the national currency. Today, investors' activity will improve on the statistics on inflation (09:30 GMT). We maintain a medium-term negative outlook.

Currency trading and the Japanese yen. The price of the yen started to decline after the publication of statistics from China, which pointed to a deterioration in economic performance, but measures of PBOC to support the exchange rate and limit speculation was the positive for investor sentiment and reduced demand for defensive assets. After a significant strengthening of the yen, investors are likely to fix positions that will lead to the resumption of decline. Our medium-term outlook for the yen remains negative and we expect reduction it in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar showed increased volatility following the publication of statistics from China. Thus, GDP growth slowed in Q4 to 6.8%, which is 0.1% less than in the previous quarter. The volume of industrial production rose in December by 5.9% compared to the same period of 2014, which was 0.3% less than in November. At the same time, retail sales growth slowed to 11.1%, against 11.2% in November. Stabilizing the situation in the commodity markets supported the Australian currency. Tomorrow we should pay attention to data on the index of consumer confidence in Australia. Our medium-term outlook remains negative, but we may see a correction in the coming days.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed increased volatility, but has little change and as a result continued consolidation around the previous close. The dynamics of trading today will affect the statistics on the consumer price index in New Zealand (21:45 GMT). It should be noted that low inflation is pushing the Reserve Bank of New Zealand to lower interest rates, which will be negatively displayed on the price of the New Zealand dollar. Our medium-term outlook for the New Zealand dollar remains negative.

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