20.03.2015 - Volatility of the last day of the week decreased
The price of euro yesterday showed a decline after a sharp rise on Wednesday. The reason for the decrease was the revaluation of the Fed's statement on monetary policy. It should be noted the negative impact of some politicians’ statements during a summit of EU countries regarding the restructuring of the Greek debt, which in the coming months may accelerate the downward movement of the euro. US balance of payments showed an increase in the deficit to 113 billion, which is 10 billion worse than analysts' expectations. Today, the focus will be news from the EU summit and the data on the balance of payments of the Eurozone (09:00 GMT). We expect lower volatility and maintain a medium-term negative outlook for the euro.
The price of the British pound fell sharply yesterday after strong growth in the medium, which was caused by the Fed's statement on monetary policy. Quotes returned to the levels close to local minimums and stabilized there. Today, the volatility will be significantly reduced and the course of trading will be affected by the news from the EU summit, as well as statistics on public sector net borrowing in the UK in February (09:30 GMT). Due to the decline in the euro and strengthening of the US dollar, we maintain a medium-term negative view of the British currency.
The Japanese yen has resumed falling against the strengthening of the US dollar. Today, the price has stabilized after the statement of the Bank of Japan's chairman Haruhiko Kuroda. So, Mr. Kuroda pointed to the decline of deflationary expectations against the background of easing monetary policy in the country. Inflation continued to rise gradually and the pace will depend on oil prices. We expect lower volatility in the coming days. Our medium-term outlook for the yen remains negative, but that can change in case of increased demand for defensive assets.
Australian dollar price increased due to the fact that the RBA has not declared the still high rate of national currency during his speech. In addition, the decline of the US dollar has led to a strengthening of the Australian dollar. It is worth noting that the control of the Reserve Bank of Australia noted the positive effect of reducing the currency on the economy and stressed that the regulator is considering the possibility of further interest rate cuts. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions.
The price of the New Zealand dollar resumed growth after yesterday's correction caused by the strengthening of the US dollar. It is worth noting that investors have become positive for data on GDP growth in 2014 at 3.5% and 0.8% in the 4th quarter compared to the previous period. The improvement in the trade balance of the country also supports investors. According to our estimates, the growth of the New Zealand currency will continue in the near future, but volatility will be significantly reduced. We expect additional signal to determine the medium-term forecast.