25.01.2016 - The US dollar rose against the euro and yen
Currency trading and the euro. The price of euro continued to decline against the background of hints of the ECB President Mario Draghi on the possible easing of monetary policy in the euro area after the meeting in March. Low oil prices have a negative impact on inflation. In addition, investor sentiment deteriorated due to the instability in the financial markets. Despite the decrease in the likelihood of further increases in interest rates of the Fed in March, the divergence in monetary policy of the Fed and the ECB will continue to put pressure on the price of the euro. Our medium-term outlook remains negative and we recommend accumulating short positions.
Currency trading and the British pound. The price of the British pound strengthened last week against the background of correction after a strong reduction of the previous weeks. Growth strengthened due to fixing short positions. The market ignored the weak data on retail sales in the country, which in December fell by 1.0%, against growth of 1.3% in November. Positive for the British currency was the news on the net public sector borrowing, which in December totaled only 6.9 billion against 12.9 billion in November. Our medium-term outlook remains negative, and growth is possible only within the correction.
Currency trading and the Japanese yen. The price of the Japanese yen continued to decline due to a number of factors, among which is a correction after a significant strengthening, weakening demand for defensive assets due to rising oil prices and an increase in stock indexes and the expectation of additional measures to stimulate inflation in Japan by the National Bank of the country. We recall that the Bank of Japan meeting will be held on January 28-29. Today was published statistics, according to which in December, the trade surplus totaled 0.04 trillion yen, against the forecast of 0.08 trillion yen. We maintain a medium-term negative outlook on the yen and expect further fall in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar showed strong growth against the background of a sharp correction in commodity markets, as well as by improving sentiment about the situation in China. Today, the price growth stopped and we can see a pullback after the strong upward momentum. Negative for investors was the news on the index of business sentiment in Australia that in December was 3 compared to 5 in November. Further movement of prices will depend on the situation on the commodity markets. Despite the possible continuation of growth in the near future, our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar rose last week following the Australian currency, as well as a positive effect of improving sentiment in the commodities market in China. This week is expected increased volatility due to the statement of the Reserve Bank of New Zealand, which will be held on Wednesday. According to our forecasts, interest rates will remain stable, but the regulator may hint at their reduction at the next meeting, which will be negatively displayed on the price of the national currency. Our medium-term outlook remains negative.