20.10.2014 - ​Markets are waiting for tomorrow's statistics from China

The price of euro fell against the strengthening dollar after the release of statistics on the increase in the number of permits issued for new home construction in the United States to 1.02 million, that is 0.02 million better than the previous figure. The number of housing starts in the United States rose to 1.02 million in September, against 0.96 million in August. In addition, consumer confidence in the United States rose to 86.4, against 84.6 in the previous period. Today, trade dynamics will depend on the data on producer price index in Germany (06:00 GMT) and the euro area balance of payments (08:00 GMT). We expect continued negative trend of euro today and save midterm negative outlook.

The price of the British pound after the upward correction stabilized below 1.6100 and now continues to consolidate below this mark. Given the slowdown in the global economy and despite the decline in the unemployment rate in the country to pre-crisis levels at the Bank of England are in no hurry to raise interest rates. Strengthening of the dollar and the euro's decline, which affects the dynamics of the pound in recent years will continue to have a negative impact on the pound, but its reduction potential is limited. The house price index in the country showed an increase by 2.6% in October, which will contribute to the growth in the construction sector and reduce unemployment. We expect low volatility of trading and save midterm positive outlook for the pound.

The Japanese yen continued to fall in price on news of Japan's pension fund that manages over $ 1.2 trillion dollars. In the fund said that it will change the target parameters of investments and will invest in Japanese companies 25% instead of 12% previously and reduce investments in Japanese government bonds from 60% to 40%. Tomorrow the course of trading will be affected by the data on the index of business activity in Japan in August. Considering loosening of monetary policy in the country and strengthening of the dollar, we expect a further fall in the price of the yen and maintain midterm negative outlook.

The price of the Australian dollar continues to consolidate below the strong level of 0.88. Strengthening of the dollar against other major currencies has failed to lead to faster reduction in the price of the Australian currency. Despite statements by the Reserve Bank of Australia's overvalued currency, low iron ore prices, the fall the Australian dollar has stopped. Tomorrow we should pay attention to the publication of the previous protocols RBA meeting. Investors are waiting for the release of data on the Chinese economy tomorrow and possible new measures by the government to support the economy. Our medium-term outlook for the Australian dollar remains negative.

The New Zealand dollar after a slight decline against the strengthening dollar, continues to consolidate within the local rising channel. Beginning of the trading week will depend on the data from China, which imports most of New Zealand's exports. Increase in volatility is expected on Thursday after the publication of data on the trade balance of the country, which have a strong impact on the currency. We expect the current lateral dynamics of prices in the near future, but keep midterm negative outlook.

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