19.05.2015 - Euro drops before the publication of the minutes of the Fed
Currency trading and the euro. The price of euro continued to fall against the background of speculations about a possible Greek default. European officials are skeptical about the possibility of a consensus in the near future. At the same time, Greek banks after 3 weeks may be left without liquidity due to lack of assets that can be used as collateral in the framework of the Emergency Liquidity Assistance. Today, the dynamics of trading on the market will depend on the data on the index of business confidence, the trade balance and consumer price index of the Eurozone (09:00 GMT). In addition, in the United States will be published data on the housing market (12:30 GMT). Our medium-term outlook remains negative for the euro, but growth may continue in the near future.
Currency trading and the British pound. The price of the British pound continues to decline gradually on the background of fixing position after strong growth last week. It is worth noting that the main driver of growth is the weakening of the dollar against the backdrop of weak macroeconomic data in the United States. Today, the focus of investors will be on the statistics on inflation (08:30 GMT). Faster inflation increase the likelihood of earlier increases in interest rates of the Bank of England. It should be noted that investors' activity will be constrained by the expectation of tomorrow's publication of minutes of the Fed meeting, in which will be assessed the impact of the deterioration of macroeconomic indicators in the country. Our medium-term outlook for the British pound remains negative, but growth may continue in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline after yesterday's publication of weak data on industrial output, which fell in March by 0.8%. At the same time, the strengthening of the US dollar before tomorrow's release of minutes of the previous meeting of the Federal Reserve will stimulate the fall of the Japanese yen. Tonight (23:50 GMT), volatility will increase in connection with the publication of preliminary data on GDP growth in Japan in the first quarter. We maintain a medium-term negative outlook on the yen due to the loose monetary policy of the Bank of Japan, as well as the expectation of monetary tightening by the Fed.
Currency trading and the Australian dollar. The price of the Australian dollar showed a slight decrease against the publication of weak data on the index of leading indicators, which fell in March by 0.1%, against growth of 0.5% in February. At the same time, the minutes of the previous meeting of the Reserve Bank of Australia noted that the regulator does not give guidance on future policy on interest rates. Tomorrow we should pay attention to the statistics on consumer confidence in the country. The impetus for the growth rates in recently was the fall of the US currency and rising prices for raw materials. We maintain a medium-term negative view on the Australian currency, but we can see continued growth in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand Dollar was under the influence of statistics on the index of producer prices for input and output, which in Q1 decreased by 1.1% and 0.9%. On the other hand, have been published studies according to which inflation expectations for the 12 months is 1.32%, versus the previous estimate of 1.11%. This fact has reduced the likelihood of interest rate cuts of the Reserve Bank of New Zealand in the near future. We expect a continuation of the downward dynamics of the New Zealand dollar in the near future.