24.06.2015 - Price trend of the euro has changed to negative

Currency trading and the euro. The price of euro yesterday showed strong decline. Investors reduced their positions in anticipation of reaching a consensus on reforms in Greece. Most investors realize that potential growth on an agreement between the lenders and Greece will be a short-term and decline of the euro will resume in connection with the strong fundamental factors as the program of quantitative easing in the Eurozone and the expectation of rising interest rates in the United States. So, yesterday, a member of the Federal Open Market Committee of the Federal Reserve Jerome Powell said that the conditions necessary for the rise in interest rates will be reached in September and an additional increase is forecasted in December. Statistics on sales of new homes in the US also supported the dollar. Thus, the figure rose to 546 thousand, compared with an expected 524 thousand. Today, the course of trading will be affected by the important statistics on the index of business sentiment in Germany (08:00 GMT) and final data on US GDP growth for the 1st quarter (12:30 GMT). Our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound declined following the European currency, as well as due to the strengthening of the US dollar. In addition, yesterday was published weak data on the balance of production orders, which totaled -7 vs. expexted 1. The main reason for the decline was the decrease in the index of export orders balance to -17, against the strengthening of the British pound against the euro. Today, little impact on the course of trading will have data on the number of permits issued for mortgage lending in the UK (08:30 GMT). Our medium-term outlook remains negative and we expect a price drop of the pound in the near future.

Currency trading and the Japanese yen. The price of the Japanese yen continued to rise yesterday against the strengthening of the US dollar due to the increasing probability of the Fed raising interest rates in September. In addition, strong statistics on sales of new homes in the US has increased optimism about the dollar, which was partially offset by weak data on the volume of orders for durable goods in May, which fell by 1.8% that is 1.2% worse than analysts' expectations. Today have been published the minutes of the previous meeting of the Bank of Japan in which were noted concerns about the negative impact of slowing growth in China for the Japanese economy. Our medium-term outlook for the yen remains negative.

Currency trading and the Australian dollar. The price of the Australian dollar continues to decline gradually due to the strengthening of the US dollar, as well as the negative influence of adverse factors, including lower prices for iron ore and other export commodities, as well as the expectation of monetary easing by the Reserve Bank of Australia. Stronger statistics on the manufacturing sector in China, which was published yesterday, improved investor sentiment, but according to our forecasts, the fall in the price of the Australian dollar will continue in the near future and in the medium term.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to move inside the downward trend, which is associated with a reduction in the interest rates of the Reserve Bank of New Zealand and the expectation of further easing of monetary policy in the country. In addition, the strengthening of the US dollar will put pressure on quotations of the New Zealand currency. Today, we expect increased volatility. We still recommend investors to hold short positions and maintain the medium-term negative outlook for the New Zealand dollar.

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