24.06.2014 - Volatility on the currency markets decreases

The price of euro fell yesterday against the negative statistics from the Eurozone, but was able to regain its position at the moment and continues to consolidate near the level of 1.36. Thus the manufacturing PMI of the Eurozone in June fell to 51.9, compared with an expected 52.2, while the services PMI in the region was 52.8, which is 0.6 worse than the forecast. Positive data on home sales in the U.S. secondary market, which rose to 4.89 million compared with an expected 4.74 million, did not strongly influence the course of trading. Today the focus of investors will once again be on data on the housing market and consumer confidence in the U.S. (14:00 GMT). We expect that in the medium term, the euro will continue to decline.

The British pound continues to consolidate above the mark of 1.70, and is waiting for new signals for continued growth. Consistently strong performance of the UK economy continues to support the exchange rate of the national currency. Today, the increased volatility is possible after the speech of the head of the Bank of England Mark Carney at the parliamentary session on inflation (8:30 GMT). We expect that in the medium and long term growth of the British pound will continue, but its potential is limited.

The Japanese yen strengthened yesterday amid improved index of business activity in the manufacturing sector to 51.1 against 49.9. In addition, the head of the Bank of Japan said yesterday that the effect of increasing the sales tax from 5% to 8% in April, will weaken and inflation may slow to 1% in the summer, but will restore growth in the second half of the year. Large block of macrostatistics will be published on Thursday night, after which is expected the increase of volatility. We maintain our positive outlook for the medium-term and expect the resumption of growth of USD/JPY in the near future.

The price of the Australian dollar corrected downwards on background of fixing positions after yesterday's strong growth, but continues to hold at high levels due to rising prices for iron ore and copper on world markets. This week is not scheduled the release of important macro in Australia and traders will be watching the commodity prices and the data from China, which supported the currency yesterday. We expect consolidation in the near future, after which the price will probably resume its decline.

The New Zealand dollar corrected downwards, but continues to move in an uptrend. It should be noted that the growth of price slowed down and the decrease can be resumed if the representatives of the Reserve Bank of New Zealand will hint again on the need to fight the high exchange rate. Data on reduction of the index of leading economic indicators in China in May to 0.7% versus 1.0% in April not strongly affected the New Zealand currency. The quotes growth might continue for some time, but its potential is limited by the policy of the regulator.

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