24.11.2014 - The price of Euro corrected after a sharp decline on Friday
The price of euro fell to two-year low after the ECB President Mario Draghi on Friday declared readiness for more active actions in case of reducing inflation in the euro area, which may contribute to a fall in prices of petroleum products. The most important statistics this week will be published on Friday, when will be released the data on unemployment in the euro area and the consumer price index. Today we should pay attention to the statistics on the index of business confidence in Germany in November (09:00 GMT) and services PMI in the US (14:45 GMT). We forecast that the program of asset purchases and weak economic data from the euro area will lead to further decline in the euro. Today we can see a small correction after the sharp fall on Friday. Our medium-term negative outlook remains unchanged.
The price of the British pound stabilized above 1.56 after 2 of 9 members of the Monetary Policy Committee of the Bank of England voted to raise interest rates and the likelihood of its increase in next year has grown. On Friday it became known that the UK net borrowing in October fell to 7.1 billion, against 10.6 billion in September. Today, we expect low volatility, and tomorrow will increase the activity of traders after the meeting of parliament on inflation. The fall of prices may continue in the short term.
The Japanese yen, after strengthening, continues to consolidate within a narrow side trend. The reason for optimism of investors have become polls of voters who pointed to support of policies of Prime Minister Shinzo Abe, who promotes the active support of the economy by buying assets. Today in Japan is the day off, but tomorrow is expected the increase of volatility in relation to the publication of the minutes of the previous meeting of the Bank of Japan and the speech of the Bank of Japan's head Haruhiko Kuroda. We forecast a further weakening of the Japanese currency in the medium term.
The price of the Australian dollar showed strong growth on Friday against lowering interest rates by the central bank of China, which was caused by a number of indicators that point to a slowing economy. Stimulation of the Chinese economy will positively affect commodity prices which show a steady decline in recent years. This week is not expected the publication of important statistics on the Australian economy and the course of trading will depend on the data from the US and the dynamics of prices for iron ore. We maintain our medium-term outlook for the Australian dollar, but there is a decrease of the potential for reducing of prices.
The New Zealand dollar showed a correctional movement after the strengthening of the Australian dollar and due to the decrease in interest rates of the central bank of China. China remains the main trading partner of the country and stimulating of its economy should improve the trade balance of New Zealand, which is the main cause of the fall of quotations of the New Zealand dollar. Positive for investors was the publication of statistics on the growth of tourist in the country, the number of which increased by 8%. We maintain our medium-term negative outlook on the New Zealand dollar, but note a decrease in the potential for further reduction.