19.10.2016 - Data on inflation in the US supported the dollar

Currency trading and the euro. The price of euro failed to extend gains after in the US was published the data on the consumer price index, the growth of which in September was 0.3%, which coincided with forecasts of analysts. Rising inflation and the positive statistics on the US labor market encourage the Fed to raise interest rates, which is negatively displayed on the euro price. The likelihood of higher interest rates in December is about 70%. At the same time we do not expect such a move in November, ahead of the presidential elections in the United States. Today will be published important data on the housing market in the US (12:30 GMT). In addition, we should pay attention to the publication of the Beige Book (18:00 GMT). We expect the fall of the euro in the near future and medium term.

Currency trading and the British pound. The price of the British currency could not continue to grow after the US dollar positively reacted to the data on the growth of inflation in the US. It is worth noting that the UK consumer price index rose to 1.0% in September against the previous level of 0.6% and 0.9% forecast. This trend may continue in the coming months against a background of the devaluation of the pound after the decision on the exit from the EU, as well as in connection with the oil price recovery. Today, volatility may rise after the release of a report on the labor market in the country (08:30 GMT). Our medium-term outlook for the British pound remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen continued to consolidate after have been published conflicting data in China. Investors continue to closely monitor investor expectations about the Fed raising interest rates in December and a decline in Japan early next year. index of business activity in all sectors of the economy showed growth by 0.2% in September, as expected. In case of the stock markets fall, the demand for yen will grow. The current consolidation may continue in the next few days, but in the medium term we expect a fall in the price of the yen.

Currency trading and the Australian dollar. The price of the Australian dollar stopped growing after in China was published the data on the growth of GDP, which was 6.7% in Q3, in line with expectations. At the same time, the volume of industrial production was 6.1% in September, which is 0.3% less than the forecast. With the recent growth, we can see the price correction. Tomorrow will be published important news on the labor market in Australia, which recently supported Australian currency. Our medium-term outlook remains negative and we expect a decrease in the near future.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar stabilized near the important level of 0.7200. Investors reacted to the contradictory statistics in China. It is worth noting the negative impact of falling prices for dairy products, which is the main export group. According to our estimates, the low level of inflation in the country will encourage the Reserve Bank of New Zealand to lower interest rates, which will be negatively displayed on the quotations of the local currency. We forecast a drop in the near future and medium term.

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