Currency trading and the euro. The price of euro continued to consolidate against the background of weak statistics in the euro area and the United States. Thus, the manufacturing PMI in the euro zone fell by 0.2 to 51.5, and in the US to 50.5, against 50.8 previously. Consumer confidence in the Eurozone in the current month totaled -7, which is 2 better than expected. Today, the dynamics of trading will affect the data on GDP growth in Germany for the 1st quarter (06:00 GMT), the index of economic sentiment of the Eurozone (09:00 GMT) and new home sales in the US (14:00 GMT). We expect a further decline in the euro in the medium term, but in case of the publication of strong data on the growth of the German economy, we can see a correction.
Currency trading and the British pound. The price of the British pound showed decline yesterday amid speculation on the country's possible exit from the EU. Publication of various surveys on this subject will keep volatility high. Today, it is worth paying attention to statistics on the balance of retail sales in the UK in May (10:00 GMT), and on Thursday will be released a preliminary report on the growth of UK GDP in Q1. We expect the growth of the British currency after the referendum on June 23 and expect increased volatility until this event.
Currency trading and the Japanese yen. The price of the Japanese yen continued to strengthen against the US dollar after at summit of G-7 did not support Japan's intention to deal with the strengthening of the yen via interventions. The current strengthening may continue in the near future. Strong volatility is expected on Friday after the release of data on the consumer price index in Japan and on the growth of the preliminary US GDP data. According to our estimates, the yen will decline against the US dollar in the medium term, despite the probable strengthening in the coming days.
Currency trading and the Australian dollar. The price of the Australian dollar fell after the head of the Reserve Bank of Australia Governor Glenn Stevens gave a speech during which said about low inflation and improvement in the labor market. It should be noted that the local currency quotes are under pressure of rapid falling of prices for iron ore and other commodities, which this year have shown a strong speculative growth. In the near future the price dynamics will depend on the situation on the commodity markets and the movement of the US dollar. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. Price of the New Zealand dollar showed a strong decline in sideway trend. The pressure on price has had a decline in commodities’ prices and the negative trend of the Australian dollar. In the coming days, the volatility may increase in connection with the publication of statistics on the trade balance in New Zealand (22:45 GMT) and the presentation of the draft of annual budget tomorrow night. We maintain our medium-term negative outlook for the New Zealand dollar.