20.07.2015 - The fall in commodity prices adversely affected the Australian Dollar
Currency trading and the euro. The price of euro continued to decline in the last trading day of the week against the background of strong US data, which supported the US dollar. Thus, the consumer price index was 0.3% in June, in line with expectations and the number of housing starts in the US rose to 1.17 million against the expected 1.10 million. Improving macroeconomic data increases the likelihood of the Fed raising interest rates in September. Today, the course of trading will be affected by the balance of payments of the Eurozone (08:00 GMT) and the speech of US Finance minister Jack Lew (18:30 GMT). We maintain a medium-term negative outlook for the euro, but do not exclude the correction in the near future.
Currency trading and the British pound. The price of the British pound continues to consolidate despite the strengthening of the US dollar due to the strong statistics on inflation and the construction sector in the United States. Today have been published the data on the index of housing prices in the UK from Rightmove, according to which the index in July rose by 0.1%, against growth of 3.0% in the previous month. Further dynamics of the British pound will depend on investors' expectations regarding the increase in interest rates of the Bank of England and the Fed. We maintain a medium-term negative outlook, and expect falling prices in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline due to the strengthening of the US dollar against the background of the likelihood of higher interest rates of the Fed, which will lead to a further decline of the yen. It is worth noting the low demand for defensive assets like the yen, following the successful vote in the Greek Parliament on the reforms needed to obtain a third bailout package. At the moment, there is a possibility of correction after the sharp fall in prices. Today in Japan is the day off. Our medium-term outlook remains negative.
Currency trading and the Australian dollar. The price of the Australian Dollar showed increased volatility. So negative for the Australian currency was a decline in commodity prices and a sharp decline in the price forecasts for iron ore, which is the main export item of the country. On the other hand, investor sentiment improved on the background of data on the volume of new lending in China, which rose in June to 1.279 trillion against the expected 1.05 trillion. Tomorrow will be published the minutes of the previous meeting of the Reserve Bank of Australia, which can lead to increased confidence in the further easing of monetary policy in the country. Our medium-term outlook for the Australian dollar remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar is corrected upwards after some consolidation near the important level of 0.65. Support for the national currency of the country has become the positive news on lending in China. It is worth mentioning that China is a major buyer of New Zealand's exports. Rising volatility this week predicted on Wednesday after the publication of the decision of the Reserve Bank of New Zealand, which can again reduce the interest rates, which will lead to a sharp drop in prices. Our medium-term outlook remains negative.