22.12.2014 - Traders will fix positions before the holidays
The price of euro on Friday continued to decline and updated the yearly low versus the greenback against the publication of data on the euro area balance of payments a surplus of which fell in October to 20.5 billion, compared with an expected 27.8 billion. It is worth noting that the quotes of the euro still weighs by the US Federal Reserve statement of intention to tighten monetary policy next year amid high probability of starting the program of quantitative easing in the Eurozone. Today, the course of trading will be affected by the data on changes in the number of unemployed in Germany (8:55 GMT), the index of consumer confidence in the Eurozone (15:00 GMT) and existing home sales in the US (15:00 GMT). Our medium-term outlook for the euro remains negative with a target at 1.20.
The price of the British pound after the decline caused by the Fed statement regained some positions and quotes now continue to move within the corridor 1,5550-1,5800. Today, the volatility will be limited by the expectations of tomorrow's publication of a number of important data on balance of payments, GDP growth and business investments. Despite this, the increased activity of traders is expected after the publication of minutes of the previous meeting of the Bank of England, which is likely to lead to growth of quotations of the pound. Recently, an increasing number of representatives of the Bank of England favor the policy strengthening of the regulator. We recommend to wait for the new incentives to open positions.
The price of the Japanese yen has stabilized despite the strong rise of the US dollar after Fed statement and after the Bank of Japan kept its plans to purchase assets for 80 trillion yen to support the economy of the country and achieve the inflation rate of 2.0%. It is worth noting that the rise in oil prices slightly decreased demand for defensive assets. Tomorrow is a day off in Japan, and the publication of a large block of macroeconomic statistics at the end of the week will be neutralized by the holidays in Europe and North America. We expect low activity of traders throughout the week. Our medium-term outlook for the yen remains negative.
The price of the Australian dollar continues to consolidate below 0.8200 despite the strong growth in the shares of mining sector. Despite the strong growth of oil quotations, expectations for growth of the Chinese economy remain restrained, which in turn puts pressure on expectations about the price of iron ore and other commodities, as well as the trade balance of Australia. This week, we expect low activity due to the large number of holidays. Our medium-term outlook remains negative.
The New Zealand dollar weakened today after the publication of statistics on consumer confidence. So, in the 4th quarter of this year decreased to 114.8 against 116.7 in the previous period. It is worth noting that this is the minimum value since the first quarter of 2013. The main reason for the weakening of quotations remains country's trade deficit, caused by the fall in export prices. Positive data on the growth of the country's GDP last week failed to change the downward trend of the New Zealand dollar. We maintain our medium-term negative outlook and recommend holding short positions.