21.11.2014 - The Japanese yen strengthened before the long weekend
The price of euro consolidated yesterday near the levels of the previous day, and continues to remain above the level of 1.25. Quotations increase was stopped by weak data on production and services PMI in the Eurozone that have fallen by 0.2 and 1.0 to 50.4 and 51.3 respectively. The number of initial unemployment claims in the US rose to 291 thousand, which is 5 thousand worse than the forecast of analysts. Housing sales on the secondary market increased to 5.26 million in October, against 5.18 million in September, indicating the increase in activity on the housing market, which is the key for the US economy. Today, the central event will be the speech of the ECB President Mario Draghi at the European Banking Congress (08:00 GMT). Throughout the day will not be published important macroeconomic statistics, and we expect a decline in volatility. Our medium-term outlook on the euro remains negative.
The British pound continues to strengthen gradually against the US dollar. The reason for yesterday's growth became retail sales in the UK, which showed an increase of 0.8%, which twice as many as the forecast of analysts. The highest growth was recorded in the sales of non-food stores. Also the balance of production orders rose to 3 against the forecast of -3. Today will be published statistics on public sector net borrowings (09:00 GMT), but the course of trading is projected with low volatility. We expect that in the near future quotations will likely continue to decline.
The price of the yen rose against the US dollar in relation to the fixation of positions, after the strongest decline since 1995 in five weeks. Investors decided to fix positions before the weekend. In addition, the finance minister noted too rapid decline of the national currency. Traders expect the appointment of elections in Japan on December 14 and in the case of support of Prime Minister Shinzo Abe, stimulating of the economy will continue, which will lead to a further weakening of the national currency of Japan. On Monday in Japan is a holiday. We maintain a medium-term negative view on the Japanese yen.
The price of the Australian dollar corrected upwards, but was unable to continue the growth and resumed the downward movement. Quotes of the national currency of Australia are under the pressure of weaker growth of industry of China, which is the main consumer of Australian iron ore and other commodities. Moreover, employment in the country is growing slowly. On the next week is not expected the publication of important macroeconomic data and we anticipate that price will continue to fall. Our medium-term outlook also remains negative.
The price of the New Zealand dollar corrected upwards after it declined for a few days after auction on milk production, the price of which is still at a low level, and also in connection with weak data on Chinese industry. The price growth of the New Zealand currency is also limited by policy of the Reserve Bank of New Zealand, which in case of growth can enter the market with interventions, as it happened before. We expect a further fall in prices on the New Zealand dollar, and we believe that the increase in prices is limited by an important level of 0.80. Our medium-term outlook is negative.