21.10.2014 - ​China's GDP growth was minimal in 5 years

The price of euro yesterday showed growth despite the negative data for the euro area balance of payments, which fell to 18.9 billion in August, against 21.6 billion in July. Also PPI in Germany has not changed in September, analysts were expecting a growth of indicator by 0.1%. The reason for the growth of the euro was a decline in the dollar on expectations the publication of data on the consumer price index in the United States, which is likely to slow given the decline in fuel prices. Decline in inflation may lead to later raise interest rates by the Fed. Despite this, the American economy shows better results than the European, and the ECB's monetary policy is aimed at the growth of liquidity in the long run will lead to the fall of the euro. Today we should pay attention to data on home sales in the secondary market of the USA (14:00 GMT). We maintain a medium-term negative outlook for the euro.

The British pound extended gains against the weakening of the dollar, as well as in connection with data on house prices in the country, which showed an increase of 2.6% in October from 0.9% in September. According to analysts the price of housing in the UK will continue to grow and will rise to 30% in the next 5 years. The construction sector is one of the key for the British economy and investors are positive about the improvement in this segment. We maintain our positive medium-term outlook and low volatility today.

The price of Japanese yen could not continue the downward trend yesterday that was caused by the decision of the pension fund of Japan to change the parameters of the investment policy - to increase investments in Japanese companies to 25%, and reduce the volume of investments in government securities to 40%. In addition, the dollar has weakened, and the business activity index in August fell by 0.1%, compared with an expected decline of 0.3%. Tomorrow we expect increased volatility due to the publication of data on the trade balance of Japan in September. Given the ultra-loose monetary policy of the Bank of Japan and the strengthening of the dollar, we maintain a medium-term negative outlook for the yen.

The price of the Australian dollar rose despite weak data on the growth of China's GDP in the 3rd quarter by 7.3%, which is 0.1% better than analysts' forecasts, but the lowest level in 5 years. At the same time, the volume of industrial production increased to 8.0% in September, against the previous figure of 6.9%. It will be recalled that the state of the industry in China affects the demand for iron ore and other export commodities of Australia. Tomorrow we should pay attention to the data on the index of leading economic indicators and consumer price inflation in the country. We maintain a medium-term negative outlook for the New Zealand dollar.

The New Zealand dollar continued to rise following the Australian currency. Investors reacted positively to the news on the growth of industrial production in China, but despite that the trade balance of New Zealand is under the pressure of weak demand and falling prices for New Zealand exports. It will be recalled that the main export articles are agricultural products. We expect growth of the price you soon, but keep medium-term negative outlook.

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