23.05.2016 - The yen strengthened on the first day of the week

Currency trading and the euro. The price of euro is consolidated against the US dollar after the recent decline, which was due to an increased probability of the Fed raising interest rates at the next meeting of the Federal Open Market Committee, which will take place in June. Previously was published statistics on the growth of inflation, and the Fed minutes showed the willingness to tighten monetary policy in the near future. This week, the central event will be the publication of the preliminary US GDP growth statistics. Today, we recommend paying attention to the data on the manufacturing and service PMI in the Eurozone (08:00 GMT), the US manufacturing PMI from Markit (13:45 GMT) and the index of consumer confidence in the Eurozone (14:00 GMT). Despite the possibility of the euro correction, we expect the fall in prices in the coming weeks and the medium term.

Currency trading and the British pound. The price of the British pound has fallen sharply against the publication of the results of the next survey on the UK’s exit from the EU, where 41% support this idea, while 38% oppose it. The referendum will be held in a month and up to this point, we expect to see increased volatility and unpredictable price movements. According to our forecasts more likely will be the resumption of British currency growth after the referendum. On Thursday, the dynamics of trading will affect the publication of preliminary data on GDP growth in Q1. We expect strong movements of the British currency price in the near future.

Currency trading and the Japanese yen. The price of the Japanese yen showed gains against the US dollar, after the recent weakening. This fact is explained by the publication of data on trade balance whose surplus in April totaled 0.43 trillion yen against the forecast of 0.27 trillion yen. At the same time, exports from the country fell by 10.1%, which is 0.1% worse than expected. Japan manufacturing PMI fell to 47.6 against expectations of 48.3. We maintain our medium-term negative outlook on the Japanese yen against the background of the expected rise in the US dollar and a soft monetary policy of the Bank of Japan.

Currency trading and the Australian dollar. The price of the Australian dollar has stopped the decline and at the moment the probability of correction has increased. This process is due to technical factors, and the desire of investors to fix positions after a long decline. At the same time the pressure on the Australian dollar may have a drop on commodity markets. Tomorrow the course of trading will affect the speech of the Reserve Bank of Australia’s chairman Glenn Stevens. Our medium-term outlook remains negative, but the probability of a minor correction has increased in recent days.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar is corrected upwards within the local sideways trend. Investors are waiting for new signal for opening positions. On Tuesday night will be published important data on the trade balance of the country in April, which greatly affects the course of trading. This indicator in recent months is volatile. Our medium-term outlook remains pessimistic due to the expected growth of the US dollar and a possible easing of monetary policy of the Reserve Bank of New Zealand.

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