Currency trading and the euro. The price of euro showed a drop after in the US was published important data on the consumer price index which rose by 0.2% in August and 1.1% for the year, which is 0.3% more than the growth rate in July. This fact reinforces the confidence in the Federal Reserve raising interest rates this year. Today, volatility will remain elevated, and will have little impact on the balance of payments news from the Eurozone (08:00 GMT). On Wednesday, will be published the Fed's statement on the monetary policy and economic outlook. The probability of monetary tightening on Wednesday is minimal, but the Fed's rhetoric will influence investors' expectations for the next steps of the American regulator. Today there is a likelihood of a minor correction but the medium-term outlook remains negative.
Currency trading and the British pound. The price of the British pound has fallen sharply against the background of strengthening of US dollar in the near future may continue a downward dynamics. The price index for housing in the UK from Rightmove unexpectedly showed an increase of 0.7% in September after falling by 1.2% in August. Investors are waiting for the publication of the quarterly report on the state of the UK economy on Wednesday and news from the US, which will lead to strong movements on the market. Our medium-term outlook remains negative on the background of the expected strengthening of the US dollar and the negative impact of future exit of Great Britain from the EU.
Currency trading and the Japanese yen. The price of the Japanese yen showed less strong movement than expected. On the one hand the US dollar strengthening was negatively displayed on the yen, but on the other hand, the demand for defensive assets remained elevated due to increased probability of falling stock markets. Today in Japan is the day off and we expect increased activity tomorrow after the return of investors to the market. Traders are waiting for the publication of statements of the Bank of Japan on monetary policy on Wednesday and the likelihood of stimulus measures strengthening remains high. The growth potential in the near future is low in relation to the possible use of foreign exchange intervention and the medium-term outlook is negative.
Currency trading and the Australian dollar. The price of the Australian dollar showed a decline on Friday, but today sharply recovered positions due to a rebound on commodity markets. Tomorrow in Australia will be published the minutes of the previous meeting of the Reserve Bank of Australia, which may lead to increased volatility. The main impact in the near future will be the dynamics of the commodity markets, and changes in the US dollar price. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price drop of the New Zealand dollar showed decline on Friday, but today we have seen a sharp rise on the background of correction, as well as positive statistics on consumer confidence in the country that has increased in the 3rd quarter to 108.0, against the previous value of 106.0. This week, the focus of investors will be on the statement of the Reserve Bank of New Zealand on Wednesday night, as well as news from the US. We do not expect any easing of monetary policy this week, but the dovish rhetoric may lead to a decrease in the country's national currency. We maintain our medium-term negative outlook.