20.05.2015 - Japan's GDP grew by 0.6% in the first quarter
Currency trading and the euro. The price of euro fell sharply against the US dollar after the publication of unexpectedly strong statistics on the US housing market. Thus, the number of housing starts in the country in April rose to 1.14 million, against the expected 1.02 million. This figure is the highest since 2007. At the same time, the number of building permits rose to 1.14 million vs. expected 1.06 million. At the same time, the euro area's trade surplus totaled 19.7 billion in March against 22.6 in February. Today, the central event will be the publication of the minutes of the previous meeting of the Fed (18:00 GMT). Investors will also wait for news on the negotiations of Greece with the creditors. We maintain a medium-term negative outlook on the euro and predicts its fall soon.
Currency trading and the British pound. The price of the British pound continued its decline against the publication of weak statistics on the consumer price index, which fell by 0.1% in April, which was 0.1% less than the forecast. This fact reduces the possibility of raising interest rates by the Bank of England this year. It should be noted that the strengthening of the dollar against the background of strong data on the housing market in the country also increased the downward momentum. Today's vote on monetary policy (08:30 GMT), probably will not have a strong influence on the course of trading and markets are waiting for the publication of minutes of the Fed meeting (18:00 GMT). Our medium-term view remains negative, but in the near future quotations may return to the level of 1.58.
Currency trading and the Japanese yen. The price of the Japanese yen continued to fall against the strengthening of the US dollar. Positive statistics on GDP growth of 0.6% in the first quarter of this year, against an expected increase of 0.4% could not lead to a significant growth of the Japanese currency. The main driver of GDP growth was the domestic demand. The improved growth performance of the economy makes it possible to continue the incentive programs of the government and the Bank of Japan. We maintain a medium-term negative outlook and expect the negative momentum in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar will continue to fall in connection with the publication of minutes of the Reserve Bank of Australia meetings, which has led to an increase in confidence of traders to further reduction of interest rates of the regulator to support of credit market and stimulating demand in the country. In addition, the growth of the US dollar has accelerated the rate of decline and this negative trend is likely to continue in the near future, despite the possibility of a slight correction. Support for the Australian currency was the release of a report according to which the consumer confidence index in Australia rose by 6.4% in May, against a decline of 3.2% in April. We maintain a medium-term negative outlook for the Australian dollar, and recommend holding short positions.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar has stopped falling after approaching a local minimum around 0.7340. The weakening of the Australian dollar and the growth of the US currency continues to adversely affect the attitude of investors to the New Zealand dollar. Tomorrow is forecasted the increase in volatility following the publication of the draft of annual budget. We maintain our negative view on the New Zealand currency, but do not exclude the price correction in the near future.