19.08.2016 - Volatility will fall before the weekend
Currency trading and the euro. The price of euro continued its gradual rise against the US dollar amid a low probability of increasing the Fed's interest rate in September, which is negative for the US dollar, as well as the lack of inflation in the US in July, which restrains the US regulator from monetary tightening during the next meeting of the Fed at the end of September. Yesterday were published the minutes of the previous meeting of ECB where traditionally noted the willingness of the central bank of the Eurozone to strengthen incentives if necessary. In addition, the impact of the UK’s exit from the EU will have a limited impact on the economy of the Eurozone. Today will not be published important statistics that can significantly affect the mood of investors, but investors can fix positions before the weekend after a strong growth this week. Our medium-term outlook for the euro remains negative and we look forward to the beginning of the correction in the near future.
Currency trading and the British pound. The price of the British pound has stabilized after the strong growth of the previous days. Growth is limited because of negative influence of the UK’s exit from the EU,, leading to a deterioration in the growth outlook for the British economy. According to or estimates, the growth potential of the pound is limited against the background of expected continuing deterioration of macroeconomic indicators in the country. Our medium-term outlook remains negative and we look forward to the resumption of the negative dynamics within a downtrend.
Currency trading and the Japanese yen. The price of the Japanese yen is consolidating after previously strengthened against the weakening US dollar. The focus of investors is still on expectations for further Fed moves on monetary policy. Support for the yen may be a drop on the stock markets, which will increase the demand for defensive assets. Volatility today will be reduced due to lack of vital statistics. Our medium-term outlook remains negative due to the likely use of foreign exchange intervention in case of further growth of the Japanese currency.
Currency trading and the Australian dollar. The price of the Australian dollar continued to rise against the weakening US dollar and rising crude oil, which was positively displayed on the price of commodities, which greatly affects the trade balance. Investors also positively took the data on the labor market, according to which the unemployment rate fell by 0.1% to 5.7%. On Monday will be published data on the index of leading economic indicators, but the price will be more dependent on the situation on the commodity markets. Our medium-term outlook remains negative and the growth potential in the near future has declined.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to consolidate. Support for the currency recently has become rising prices for dairy products, which is a key export commodity. In addition, the increase was due to a decline in the US dollar. Given the high probability of reducing the interest rate of the Reserve Bank of New Zealand till the end of the year, we remain a medium-term negative outlook and expect to change of the local positive trend to the negative in the near future.