22.08.2016 - The US dollar rose against the background of hawkish sentiment
Currency trading and the euro. The price of euro declined against the dollar after the presidents of San Francisco and New York Federal Reserve Banks made hawkish statements regarding the strength of the US economy and the likelihood of the Fed raising interest rates. The main arguments were strong indicators of the labor market and household spending. Today, investors' activity will be low due to the lack of publication of important statistics. Tomorrow we should pay attention to the data on new home sales in the US, but the central event of the week will be the speech of the Fed chief at a forum in Jackson Hole, and in the case of the Fed's chairwoman hawkish rhetoric we will see decline in the euro against the dollar.
Currency trading and the British pound. The price of the British pound resumed recent decline after rising correction. The dynamics of the local currency with a high probability will remain negative for a long period due to the effects of the country's exit from the European Union that negatively displays on the economy. Tomorrow, little impact on the dynamics of trading will have data on factory orders in the country. Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen is trying to change the negative trend after a prolonged strengthening, which was caused by increased demand for defensive assets and the weakening of the US dollar. It should be noted that the head of the Bank of Japan announced the possibility of further reduction in interest rates if necessary. Tomorrow we should pay attention to the manufacturing PMI in Japan. The most volatile day will likely be Friday, when will be published inflation data in Japan and the US GDP growth, as well as speech of the Fed chief. Our medium-term outlook remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar showed a decrease against the strengthening of the US dollar, fixing the position after a long period of growth, as well as the decline in oil prices. According to our estimates, the probability of falling Australian dollar has increased significantly recently against the backdrop of easing monetary policy and the expected decline in commodity prices. Our medium-term outlook remains negative and we expect a fall in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar is trying to resume a downward trend after a prolonged growth and price consolidation. The decline in commodity prices, strengthening of the US dollar and the recent reduction in interest rates will put pressure on the price of the local currency in the medium term. Tomorrow night will be published important data on the trade balance of the country, which will lead to increased volatility. Our medium-term outlook remains negative.