23.10.2014 - ​The price of the US dollar strengthened despite the inflation data

The price of euro continued to fall yesterday amid reports that 11 banks in the euro area will not pass the stress tests. Stress test results will be published tomorrow. In addition, statistics on the consumer price index in the United States has supported investors. Thus, the index rose by 0.1% in September, despite the fact that analysts expect that figure will not change. Today traders will be watching the data on production and service PMI in Germany (07:30 GMT) and the Eurozone (08:00 GMT). We should also pay attention to the data on the labor market in the United States (12:30 GMT), the manufacturing PMI (13:45 GMT) and the index of leading economic indicators of the USA (14:00 GMT). We maintain a medium-term negative outlook for the euro and recommend holding short positions.

The price of the British pound fell following the euro and continues a gradual decline. Reasons for the decline were also the news from the Bank of England, where 7 of the 9 members of the Monetary Policy Committee voted to keep the current interest rate of the Bank of England. Today, trade dynamics will depend on the data on retail sales, the number of permits issued for mortgage lending (08:30 GMT) and the balance of production orders in the UK (10:00 GMT). We maintain a medium-term positive outlook despite the possibility of a drop in prices of the British pound in the near future.

The Japanese yen compensated previous gains on strengthening of the US dollar after the publication of data on consumer price inflation in America. Investors reacted positively on the data on the growth of Japanese exports, but this fact was not able to keep the yen from another reduction. Today was published statistics on the manufacturing PMI in Japan, which rose to 52.8, which is 0.7 better than the forecast of analysts. Despite this, the national currency of Japan in the near future is likely to continue to decline. We maintain a medium-term negative outlook for the Japanese yen.

The price of the Australian dollar fell slightly and continues to move within the side corridor. The index of business sentiment in Australia for the 3rd quarter remained unchanged at 6. At the same time, investors were pleased by the statistics on the growth of the manufacturing PMI in China by 0.2 to 50.4 in October. Tomorrow the dynamics of trading will be affected by the data on the index of leading economic indicators of China in September. Given the low prices of exports of Australia and the Reserve Bank of Australia's statements on the need to reduce the national currency, we maintain a medium-term negative outlook and recommend holding short positions.

The New Zealand dollar fell sharply after the publication of statistics on the consumer price index whose value has fallen to the lower limit of the corridor set by the central bank. Thus, the figure was 0.3%, which is 0.2% below the forecast of analysts. Tonight (21:45 GMT), we expect a strong increase in volatility in connection with the publication of data on the trade balance of the country. Given the use of interventions to deal with the high prices on the national currency of New Zealand and the deterioration of the trade balance of the country, we keep medium-term negative outlook and recommend holding short positions.

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