21.07.2015 - Falling gold has a negative impact on the Australian dollar
Currency trading and the euro. The price of euro continues to fall within the local downtrend. At the moment, the main influence on the course of trading has expectations of tighter monetary policy of the Fed. At the same time it is worth noting that the IMF has confirmed the payment on loan by Greece, which is the basis for the resumption of cooperation between the Fund and Greece. The German Central Bank published a report according to which the country's economic growth is likely to accelerate in the second quarter amid rising consumption. Negative for the euro has become the weak data on the balance of payments surplus which fell to 18.0 billion in May against the forecast of 23.1 billion. Today, in the euro area and in the United States will not be published vital statistics, and we forecast a decrease of price volatility. We expect a high probability of decline of the euro in the medium term to 1.05.
Currency trading and the British pound. The price of the British pound continues to consolidate against the background of lack of drivers for a strong movement. Investors are waiting for the publication of the results of voting on monetary policy in the UK, which will be released on Wednesday. According to the head of the Bank of England interest rate rise time is coming, but we do not expect monetary tightening control this year. Today, it is worth paying attention to statistics on the net borrowing of the public sector of the UK (08:30 GMT). Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline gradually due to reduced demand for the yen as a defensive asset and expectations of rising interest rates, by the US Federal Reserve this year. Soft monetary policy of the Bank of Japan is the main incentive for the reduction of quotations of the yen. Yesterday in Japan was a holiday, and today the dynamics of trading will influence the Minutes of the previous meeting of the Bank of Japan in which it was noted that at this time the effect of monetary easing is reduced. Tomorrow will be published the report on the index of business activity in Japan. Our medium-term outlook remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar continues to consolidate and according to our forecasts will show strong price movement in the near future. Negative for the Australian currency was the fall in iron ore prices and a sharp decline in gold prices to their lowest levels in more than 5 years. The Reserve Bank of Australia noted that a further reduction in interest rates is necessary and is probable. Inflationary pressures are subdued and wage growth remains low. Tomorrow is forecasted the increase in volatility after the statements of the RBA. We expect a fall in price of the Australian dollar, and recommend holding short positions.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar rose slightly against the background of the comments of the Prime Minister of New Zealand on the currency falling by 25% for the year, which was more rapid than previously expected. It is worth noting that the main factors that put pressure on the New Zealand currency remains the strengthening of the US dollar, low prices for dairy products, which is the main export item and expectation of lowering interest rates of the Reserve Bank of New Zealand tomorrow night. Our medium-term outlook remains negative and we recommend holding short positions.