24.11.2015 - Preliminary data on the US GDP growth will increase market activity
Currency trading and the euro. The price of euro corrected upwards after reaching the lowest level since April, which was caused by the increase in the probability of the Fed raising interest rates in December. The euro was supported by yesterday’s positive data on manufacturing and service PMI in Eurozone, which rose in November by 0.5 each, to 52.8 and 54.6. At the same time, statistics from the US did not meet the expectations of experts and US manufacturing PMI fell to 52.6, which is 1.5 worse than the previous indicator, and existing home sales fell to 5.36 in October, against 5.55 in September. Today, the dynamics of trading will be affected by the data on GDP growth in Germany in the third quarter (07:00 GMT) and preliminary data on US GDP growth for the same period (13:30 GMT). In addition, we should pay attention to the data on the index of US consumer confidence from the Conference Board (15:00 GMT). We maintain a medium-term negative outlook on the euro and recommend holding short positions.
Currency trading and the British pound. The price of the British pound continued its decline against the strengthening of the US dollar, but the rate of decline has slowed down yesterday on the background of a slight correction of the dollar. It is worth noting that today will be a meeting of the British Parliament on inflation (10:00 GMT), at which will be stated predictions on consumer price index in the country, which affect market expectations about the timing of rising interest rates by the Bank of England. Also, the dynamics of trading will be affected by the important news on the balance of retail sales in the UK (11:00 GMT). Our medium-term outlook remains negative and we expect increased volatility today.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened today against the background of the dollar's decline after strong growth in previous days, as well as in connection with the publication of positive statistics on Japan's manufacturing PMI, which in November rose to 52.8 against 52.1 expected. This fact indicates that the acceleration of growth in the manufacturing sector, which is key to the economy of Japan. Tomorrow we should pay attention to the minutes of the previous meeting of the Bank of Japan, and increased volatility is expected today after the release of the preliminary report on the growth of US GDP in the third quarter (13:30 GMT). Our medium-term outlook remains negative due to the difference in the monetary policy of the Fed and the Bank of Japan.
Currency trading and the Australian dollar. The price of the Australian dollar is corrected upwards after the recent sharp fall. The main factors that continue to put pressure on the Australian currency remains lower commodity prices, slowing growth of the Chinese economy and the strengthening of the US dollar. The weakening of the Australian dollar partially offset the negative impact of these factors for the economy and for further stimulus, the Reserve Bank of Australia may continue to lower interest rates. Today, the dynamics of trading will be affected by the speech of the RBA chairman Glenn Stevens (9:05 GMT). We expect falling prices in the medium term and in the coming weeks.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar has stabilized around the level of 0.65 after the recent decline caused by technical factors, and the strengthening of the US dollar. Today, the dynamics of trading will be affected by the news from the United States, and tomorrow evening will be published statistics on the trade balance in New Zealand, which traditionally has a strong influence on the course of trading. The expected decrease in interest rates of the Reserve Bank of New Zealand in December and a possible tightening of monetary policy in the United States, are the reasons to save medium-term negative outlook.