23.07.2014 - The euro hastened the fall
of euro has fallen sharply to eight-month low after a long consolidation.
Significant fundamental events that could lead to such a drastic movement did
not happen and that is why the sharp drop is explained by technical factors.
U.S. data yesterday showed the consumer price index increase in June by 0.3%,
which coincided with forecasts. Fuel prices showed the greatest growth. At the
same time, the number of home sales on the secondary market rose to 5.04
million against the forecast of 4.98 million. Today the course of trading may
be influenced by data on consumer confidence in the euro area (14:00 GMT), as
well as news from Gaza and Ukraine. We maintain a medium-term negative outlook
The price drop of British pound has slowed, despite the decline in the balance of production orders to July 2, against the forecast of 9. At the same time, public sector net borrowing were below expectations and totaled 9.5 billion, which is 0.8 billion less than the forecast. Today we should pay attention to data on mortgage lending (8:30 GMT) and retail sales in the country (10:00 GMT). The British pound is supported by strong economic indicators of the country and in the medium term is likely to continue to grow to the levels of 1.72 and 1.73.
The price of the Japanese yen stabilized due to lack of important macro and decrease of fears concerning the situation in Ukraine. Traders are also not in a hurry to open positions before the release of trade balance data and manufacturing PMI in Japan, which will be published tonight. Tightening of monetary policy in the U.S. and the probable further injections of liquidity in Japan gives reason to keep medium-term negative outlook for the Japanese yen.
Australian dollar strengthened today due to several factors. On the one hand the consumer price index in the second quarter increased by 0.5%, in line with analysts' forecasts, on the other - the national currency of Australia have been supported by positive corporate reporting of mining companies. Despite the upward movement in the last few days, we expect the price correction in the near future and maintain a medium-term negative outlook for the Australian dollar.
The price of the New Zealand dollar rose slightly on the background of positive dynamics of the Australian currency. After a long consolidation within the corridor 0,8660-0,8720 we expect growth of price volatility. Catalyst for the beginning of the movement can become statistics on the trade balance of the country and the decision of the Reserve Bank of New Zealand on interest rates, which will be published tonight. We expect growth of volatility and recommend waiting for a signal to open positions.