21.01.2016 - Investors are waiting for the statement of Mario Draghi
Currency trading and the euro. The price of euro reduced with the improvement in investor sentiment due to a stabilization in commodity markets. Despite this, the price of the dollar was negatively affected by the data on basic consumer price index, which in December rose by 0.1%, vs. expected 0.2%. At the same time, the number of housing starts in the US in December totaled 1.15 million, compared with an expected 1.19 million. Today, the central event of the day will be a press conference of Mario Draghi (12:45 GMT) after the interest rate decisions of the ECB. The head of the ECB may hint to increase of the quantitative easing program, which will lead to lower prices of euro. We maintain a medium-term negative outlook on the European currency.
Currency trading and the British pound. The price of the British pound has stabilized after the publication of conflicting macroeconomic data block on the labor market in the UK. Thus, the unemployment rate decreased by 0.1% to 5.1%, but the average wage growth in November slowed to 2.0%, which was the minimum value in 2015. In recent time, the dynamics of the British currency is under the pressure from fears of the country's exit from the European Union, that is possible after the referendum on the issue, which will take place in 2016-2017. We maintain a medium-term negative outlook on the British currency, but in the near future will see a substantial correction after the strong decline.
Currency trading and the Japanese yen. The price of the Japanese yen weakened today against the US dollar due to the correction in oil prices after the sharp fall in the previous days. At the same time adviser of Prime Minister Shinzo Abe said about emergence of the necessary conditions for easing of monetary policy in the country, which was negatively displayed on quotes of the yen. Thus, such measures can be taken at a meeting of the Bank of Japan on January 28-29. The main factor that affects the price of the Japanese currency is a demand for defensive assets, which has grown in recent years due to the deterioration of the situation in China and falling oil prices. We maintain a medium-term negative outlook on the yen.
Currency trading and the Australian dollar. The price of the Australian dollar was unable to continue the growth caused by rising oil prices which occurred within the correction. Negative for investors was the data on new home sales in Australia, which in November fell by 2.7%, against a decline of 3.0% in October. The negative situation in China, where continues decline in equity markets and the fall in commodity prices puts pressure on the currency quotes and according to our forecasts the decline will continue in the medium term, and growth is possible only within the correction.
Currency trading and the New Zealand dollar. The price of the New Zealand Dollar corrected up after yesterday's fall, which was caused by weak data on inflation in the 4th quarter, which slowed to 0.1%, against 0.4% previously. This fact will encourage the Reserve Bank of New Zealand to lower interest rates, which will be negatively displayed on the price of the currency. This decision can be made as early as next week, but the regulator may postpone its decision until the next meeting. Sentiment in the manufacturing sector of the country in December rose to 56.7, against 54.9 previously, which supported the bulls. We maintain a medium-term pessimistic outlook and recommend holding short positions.