19.08.2014 - Data on the housing market supported the the United States Dollar
The price of euro fell again yesterday against the strengthening dollar. The reason for the increased demand for the American currency became positive data on the index of business activity in the housing market, which has grown to 55, which is 2 better than expected. It should be noted that the quotes of euro fell before the release of data from the United States, due to lower trade surplus in the euro area to 13.8 billion, against the forecast of 14.9 billion. Today the course of trading can be affected by the balance of payments statistics in the euro area (08: 00 GMT), consumer price inflation and the housing market in the United States (12:30 GMT). We maintain a medium-term negative outlook for the euro with the objectives of 1.32 and 1.28.
The price of the British pound after a sharp rise following a statement by the head of Bank England concerning the fact that the interest rates may be raised regardless of wage growth in the UK. Today the dynamics of prices will depend on the statistics on inflation in the country (08:30 GMT). After a long decline, we can see the continuation of the upward correction of the price of the British pound in the near future. We also maintain our medium-term positive outlook.
Japanese yen resumed its decline against the strengthening of the dollar. In addition, the absence of deterioration in the situation in Iraq, Gaza, and Ukraine does not increase the demand for defensive assets, such as yen. Loose monetary policy of the Bank of Japan, which in autumn can start additional programs to stimulate the economy, as well as the strengthening of the dollar against the background of monetary tightening and strong macroeconomic indicators lead to a reduction of the Japanese yen in the medium term.
The Australian dollar started to rise after the publication of minutes of the previous meeting of the Reserve Bank of Australia. Thus in the minutes was noted that rates will remain at the same levels, economic growth will slow in the short term and inflation will remain restrained. Despite today's upward momentum, the growth potential of the Australian currency is limited, and we maintain a medium-term negative outlook.
The price of the New Zealand dollar fell sharply today after the publication of the forecast of the Treasury regarding reduction the country's positive balance of the country's budget in 2015 fiscal year to 297 million, against a previous forecast of 372 million. Moreover, the producer price index for output fell by 0.5% in the second quarter against the expected growth of 0.8%. We forecast that the price drop will stop in the near future in the short term price of New Zealand dollar will continue to consolidate around current levels 0,84-0,85.