23.04.2015 - The Reserve Bank of New Zealand has no plans to raise interest rates
Currency trading and the euro. The price of euro shows a downward trend against the strengthening of the US dollar after the release of strong statistics on the housing market in the US, where the number of home sales on the secondary market rose to 5.19 million in March, that is 0.15 million better than expected. The price of the houses continues to grow faster than the incomes of consumers. At the same time, the index of consumer confidence in the euro area deteriorated to -5 vs. predicted -3. Today, the course of trading will depend on the data on manufacturing and service PMI in the Eurozone (08:00 GMT) and statistics on the labor market in the US (12:30 GMT) and the number of new home sales (14:00 GMT). We maintain our medium-term negative outlook for the euro and recommend holding short positions.
Currency trading and the British pound. The price of the British pound strengthened after yesterday's statement by the Bank of England, where all nine members of the Monetary Policy Committee voted to keep the current settings of monetary policy and noted the positive effect on improving the economic situation in the Eurozone. At the same time, the Bank of England said that inflation is at zero, but soon resume growth. Investors took the statement as a regulator more hawkish. Today, the course of trading will be affected by retail sales in the country (08:30 GMT). Our medium-term outlook remains negative, but the price growth may continue in the near future.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline against the publication of statistics on strong sales on the secondary market in the US, which rose in March by 6.1%, to 5.19 million. It is worth noting the weak data on the manufacturing PMI in Japan, that in April was 49.7, compared with an expected 50.8. Further price movement will depend on the statistics on the labor market and new home sales in the United States. Given the strong demand for dollar from importers, the difference in interest rates of central banks and weak macroeconomic statistics in Japan, we maintain a medium-term negative outlook on the yen.
Currency trading and the Australian dollar. The price of the Australian dollar has strengthened slightly despite the weak data on China's manufacturing PMI, which fell to 49.2 in April, that was 0.3 worse than analysts' forecasts. It is worth recalling that the index below 50.0 indicates contraction in the sector. The index of business confidence in Australia totaled 0 in the first quarter of this year, against 2 in the previous period. Low prices for iron ore and other commodities that are exported by Australia, as well as the expectation of lower interest rates of the RBA give reason to expect a continuation of the downward movement of prices in the medium term.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar was unable to continue its upward movement and started to decline after the statement made by the Reserve Bank of New Zealand official John McDermott in which he said that the central bank is not considering raising interest rates and monetary policy will remain stimulating during considerable period of time. The impact of monetary policy on inflation in the near future will be minimal. We expect the price decline is likely to continue in the near future.