24.07.2014 - Reserve Bank of New Zealand once again raised the rate

The price of euro remained almost unchanged throughout yesterday's trading session after a sharp decline on Tuesday. Low volatility was explained by the absence of publications of important macro. Among the data, which were published yesterday, it is worth noting the index of consumer confidence in the euro area, which remained unchanged at -8, which is 2 points worse than the forecast. Today we should pay attention to the index of business activity in the manufacturing and service sectors of the Eurozone (08:00 GMT), data on the labor market (12:30 GMT) and new home sales in the U.S. (14:00 GMT). We m

The price of the British pound continued its decline yesterday after the publication of minutes of meetings of the Bank of England in which it was noted that the interest rate remains at 0.50%, while asset purchases at 375 billion. In addition, according to the protocols in the second half the economic growth may slow down. At the same time, the balance of retail sales rose to 21 in July against 4 in June, and the number of mortgage approvals grew by 1.4 thousand to 43.3 thousand. Today we should pay attention to data on retail sales (8:30 GMT). Despite the strengthening of the dollar, we maintain a medium-term positive outlook for the British pound.

The Japanese yen began to cheapen gradually against the strengthening of the U.S. currency and weak data on the index of business activity in the manufacturing sector of the country, which fell to 50.8, with an expected growth to 51.9. At the same time, the trade deficit grew less than expected and reached 1.08 trillion. Tomorrow the central news will be the release of data on consumer price inflation. In the medium term the yen will become cheaper on expectations of monetary easing by the Bank of Japan and the Fed policy tightening.

Growth of quotations of the Australian dollar has continued, despite our forecasts. The reason for continuing the upward movement was positive data on manufacturing PMI in China, which is a major exporter of Australian goods, to 52.0 in July, that is 1.3 better than in the previous month. In recent months we have seen the acceleration of growth in the industry of China after one of the main risk for the Australian economy was the fall of the industry of the second largest economy in the world. In the short term, growth may continue, but the medium-term outlook remains negative.

The price of the New Zealand dollar sharply declined after the decision of the Reserve Bank of New Zealand to raise interest rates to 3.50%. Trade surplus at the same time fell in June to 247 million, against an expected decline to 155 million. The main reason for the decline was the comments of the Reserve Bank of New Zealand on considerable potential for the fall of the national currency. In addition, the GDP growth forecast for 2014 was 3.7%. We look forward to continuing the downward movement, and then probably see a substantial correction.

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