20.09.2016 - The market is consolidating before tomorrow's statements of central banks
Currency trading and the euro. The price of euro indicates consolidation before the Fed statement on monetary policy tomorrow. The likelihood of interest rates hike in the US remains low, despite the strong data on the labor market and inflation. On the other hand, the head of the Fed rhetoric may indicate a tightening of monetary policy by the end of the year, leading to a sharp fall in the euro. Today, the dynamics of trade will slightly affect important data on the housing market in the US (12:30 GMT). We maintain our medium-term negative outlook and expect strong price movements in the near future.
Currency trading and the British pound. The price of the British pound continues to consolidate after a minor correction yesterday. Investors are waiting for important statement from the Fed, which will greatly enhance the volatility on the market and can be a trigger for further reduction in price against the background of the expected exit of Great Britain from the EU. Tomorrow will be published a quarterly report on the state of the UK economy. The growth of quotations in the near future is possible only within the correction. Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen significantly strengthened in recent days due to the speculations regarding the possibility of a reduction in further stimulating inflation in Japan. On the other hand, some investors expect new stimulus from the Bank of Japan. Tomorrow will be published on the statement of Bank of Japan on monetary policy, which will lead to an increase in volatility, but the activity will be constrained by the expectation of further steps the Fed on monetary policy. Potential strengthening of the yen is limited due to the ability to use foreign exchange intervention to weaken the yen, and we maintain a medium-term negative outlook.
Currency trading and the Australian dollar. The price of the Australian dollar has stabilized after the recent growth and in the near future will probably show strong price movement. The publication of the minutes of the previous meeting of the Reserve Bank of Australia could not greatly affect the course of trading. The document marked a strong recovery in the housing sector and the negative impact of the high exchange rate of the Australian dollar. Tomorrow will be published data on the index of leading economic indicators, but the focus will be on the Fed statement. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar rose slightly. Investors are trying to assess the impact of tomorrow's publication of statements by the Federal Reserve and the Reserve Bank of New Zealand on monetary policy. We expect saving the settings of monetary policy of the Reserve Bank of New Zealand without any changes, but there is a high probability of hints about the future decline in interest rates in the country. Our medium-term outlook remains negative and volatility will significantly increase tomorrow.