24.02.2016 - The pound fell to its lowest level in 7 years
Currency trading and the euro. The price of euro has stabilized after the recent fall. It is worth noting that yesterday was published statistics on Germany's GDP, which grew by 1.7% per year, which coincided with forecasts of analysts. Sales of homes on the secondary real estate market in the US rose to 5.47 million in January that is 0.10 million more than the forecast of analysts. At the same time, support for the euro became weak data on consumer confidence in the US from the Conference Board, which fell to 92.2 in February from 97.8 in January. Today, the dynamics of trading will depend on the US service PMI (14:45 GMT) and new home sales in the US in January (15:00 GMT). Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound fell to its lowest level in 7 years after the statements by representatives of the Bank of England with respect to the central bank's plan of action in case of a country leaving the European Union. In the case of such a decision in a referendum on June 23, the Bank of England may lower rates and expand the program of quantitative easing, which will be negatively displayed on the cost of the British currency. Today, it is worth paying attention to the data on the balance of retail sales (11:00 GMT). On speculation regarding the results of the referendum, quotations of the pound may continue to fall, but we expect the resumption of growth of the British currency before and after the referendum.
Currency trading and the Japanese yen. The price of the Japanese yen continued to strengthen against the background of the next wave of demand for defensive assets, which was due to the fall in oil prices after the statement of the representative of Saudi Arabia concerning the fact that the country does not intend to reduce the volume of oil production. Investors continue to monitor the situation in the commodity and stock markets, which greatly affects the price of the yen. In addition, on Friday will be published important preliminary report on US GDP growth for the 4th quarter of last year. We forecast a drop in the yen in the medium term, after the stabilization of commodity and stock markets.
Currency trading and the Australian dollar. The price of the Australian dollar shows a drop following commodities prices. It is worth noting that the recent growth to its highest level in 6 weeks, investors decided to fix positions. In addition, today was published statistics on the wage index for the 4th quarter, which increased by 0.5% that is 0.6% worse than expected. We expect a further fall in the Australian currency rates against the background of a possible easing of monetary policy of the RBA and the negative dynamics of commodity prices.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar also negatively reacted to the fall in commodity prices and the strengthening of the US dollar. Tomorrow night will be published important statistics on the trade balance of the country, which traditionally leads to an increase in volatility. Given the expected decline in interest rates in connection with the RBNZ low inflation and weak trade data, we keep negative medium-term outlook for the New Zealand dollar and look forward to the price reduction in the near future.