23.09.2015 - Demand for US Treasuries has led to an increase of the dollar
Currency trading and the euro. The price of euro continued to decline against the background of growing demand for defensive assets like the dollar due to the fall in equity markets and increased interest in bonds. In addition, the president of the Federal Reserve Bank of Atlanta, said about the likely increase in interest rates of the Fed this year, which also supported the bears in euro. Today, the mood of investors will depend on the data on manufacturing PMI in the Eurozone (08:00 GMT) and the US (13:45 GMT). We expect the euro to fall soon, but do not exclude the short-term price correction in the near future.
Currency trading and the British pound. The price of the British pound accelerated decline yesterday on a number of factors. On the one hand, the negative was the strengthening of the US dollar, but at the same time, the weak statistics from the UK has led to sales of the British currency. Thus, the net borrowing of the public sector rose sharply to 11.3 billion in August against the expected 8.7 billion. The balance of production orders UK was -7 in September, but analysts expected 0. After a strong decrease, the price may correct upwards slightly, but the medium-term negative outlook remains unchanged.
Currency trading and the Japanese yen. The price of the Japanese yen after the recent decline today showed growth due to weak data from China, which stimulates the demand for defensive assets. It should be noted that the volatility of the yen remains low due to holidays in Japan. Tomorrow, investors return to the market, which may lead to strong price movements. In addition, tomorrow will be published statistics on the index of business activity in Japan. Our medium-term outlook remains negative.
Currency trading and the Australian dollar. The price of the Australian dollar accelerated decline in connection with the release of negative statistics in China, where manufacturing PMI from Caixin fell in September to 47.00, against the forecast of 47.6. This fact usually has a negative impact on commodity currencies. Statistics on the growth of leading economic indicators in Australia in July, which rose by 0.3%, failed to change the negative trends on the market. Our medium-term outlook remains negative and we recommend holding short positions.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continued its negative trend and approached the local minimum in connection with the strengthening of the dollar and the negative impact of weak statistics from China. It is worth noting that today will be published important statistics on the trade balance of the country (22:45 GMT), which in recent months has had a negative impact on the dynamics of the New Zealand currency. We maintain a medium-term negative outlook and recommend holding short positions, but do not exclude short-term price correction today.