22.04.2016 - Speech of Mario Draghi has led to a strong euro movements
Currency trading and the euro. Price of euro showed a strong rise in volatility yesterday after the statement by the ECB on monetary policy. Thus, interest rates have remained unchanged and for a long time rates will remain at the same level or will be reduced. At the same time, Mr. Draghi noted the necessity of waiting for the results from the previous steps of the ECB. The new measures are possible only in case of a significant worsening of inflation and the situation in the financial sector. Support for the US dollar yesterday became strong data on the number of initial unemployment claims in the US which fell to 247 thousand against the forecast of 265 thousand. Today, trading will affect the news on the manufacturing and service PMI in the Eurozone (08:00 GMT) and US manufacturing PMI, calculated by Markit (13:45 GMT). Our medium-term outlook for the euro remains negative due to the divergence of monetary policy in the US and the Eurozone.
Currency trading and the British pound. The price of the British pound showed strong growth of volatility yesterday after the euro. The pressure on the British currency provided data on retail sales in the country, which fell by 1.3% in March that is 1.2% worse than the forecast. In February, retail sales fell by 0.5%. According to our estimates, the potential of the pound price increase in the near future is low, and the more likely scenario in the near future will be a decrease of the British currency against the background of the pessimistic expectations regarding the results of the referendum on the country's exit from the European Union structure.
Currency trading and the Japanese yen. The price of the Japanese yen insignificantly strengthened after the recent decline against the US dollar, which was due to positive data on the labor market in the United States. Also today, investors in Japan were disappointed by the data on the manufacturing PMI, which fell in April to 48.0, against 49.1 in March and forecast of 49.6. The next week is forecasted the growth of volatility amid the Fed statement on monetary policy. Our medium-term outlook for the yen remains negative and its growth can only be supported by the reduction on the stock markets.
Currency trading and the Australian dollar. The price of the Australian dollar after consolidation for several days, started a decline that was caused by the correction on commodity markets. According to our estimates, the rally on the commodities markets will end soon, and there is a significant probability of correction that will have a negative impact on the dynamics of the Australian dollar, due to the strong dependence of the economy from the mining sector. Our medium-term outlook remains negative and next week we should pay attention to the data on inflation in the country.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar fell after the Australian currency against the background of negative dynamics at commodity markets. Next week will be published statistics on the trade balance in New Zealand, which can support the growth of the price as well as the statement of the Reserve Bank of New Zealand, where investors can find hints on future plans for interest rates in the country. We expect increased volatility in the next week and maintain the medium-term negative view on the New Zealand dollar.