24.07.2015 - The data from China weighed on the Australian dollar

Currency trading and the euro. The price of euro yesterday showed growth against the backdrop of continuing fixation of position after a strong decline of the euro in the past week. As a result, the quotations reached the psychologically important level at 1.1000 and will likely continue to consolidate near this mark in the near future. Support for the US dollar yesterday was the publication of statistics on the number of initial unemployment claims, which fell to its lowest level since 1973. Today, the course of trading will depend on the data on manufacturing and service PMI in the Eurozone (08:00 GMT), the manufacturing PMI in the US (13:45 GMT), and important statistics on sales of new homes in the US in June (14:00 GMT), which we forecast will lead to the strengthening of the dollar. We maintain a medium-term negative outlook for the euro and we recommend to open short positions.

Currency trading and the British pound. The price of the British pound yesterday showed a sharp decline against the publication of data on retail sales in the country, which unexpectedly fell by 0.2%, against an expected increase of 0.4%. We recall that retail sales are a key indicator to assess the current state of the economy. Today, the dynamics of trading will be affected by the news on the number of mortgage lending approvals in the UK (08:30 GMT) and housing data in the US (14:00 GMT). Our medium-term outlook remains negative.

Currency trading and the Japanese yen. The price of the yen has stabilized after the recent strengthening on the background of fixing positions among investors after the strong price reduction of the Japanese currency. Support for the yen was the data on the trade balance of the country, the deficit of which totaled 0.25 trillion yen, in line with analysts' forecasts. Today was published strong data on manufacturing PMI of the country which in July rose to 51.4 against the forecast of 50.5. During the next week, the central event that will affect the course of trading will be the Fed's statement on monetary policy. Our medium-term outlook remains negative.

Currency trading and the Australian dollar. The price of the Australian dollar fell sharply today after the publication of statistics on China's manufacturing PMI, which fell to 48.2, compared with an expected increase to 49.8. It should be noted that this indicator has a strong influence on the prices of raw materials and therefore the value of the Australian dollar. Given the fall in the price of iron ore, copper, gold and oil, we expect a further decrease of quotations of the Australian dollar in the medium term and recommend holding short positions on the Australian dollar.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar after yesterday's growth has changed the direction of movement, which now has strengthened amid the weak statistics on industrial production in China and the data on the trade balance in New Zealand. Thus, the trade deficit totaled 60 million, compared with an expected surplus of 100 million, and the previous figure of 371 million surplus. Our medium-term outlook is negative due to the low prices of exports and the expectation of monetary policy easing of the Reserve Bank of New Zealand. We recommend to keep the short positions.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.