Currency trading and the euro. The price of euro showed a slight increase against the US dollar on the background of correction, as well as the publication of weak statistics in the United States. Thus, the service PMI in February, according to preliminary estimates showed a drop to 49.8, against 53.2 in January. A value below 50.0 indicates contraction activity in the sector. At the same time, sales of new homes in the US totaled 494 thousand in January against the forecast of 522 thousand. Today, the dynamics of trading will affect the data on consumer price index in the euro area (10:00 GMT) and the volume of durable goods orders in the US (13:30 GMT). The investors are in no hurry to build up positions ahead of tomorrow's publication of the preliminary report on US GDP for the 4th quarter. In addition, the dynamics of trading can affect the news of the summit of G-20. Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound continued to decline, and reached its lowest level in seven years amid investor concerns about the UK’s exit from the European Union that will lead to further reduction of price by 10-15%. According to our estimates, this scenario is unlikely, and despite a likely decline in the near future, we recommend to look for the point to open long positions. Today, the dynamics of trading will affect the publication of the second preliminary report on GDP growth in the 4th quarter (09:30 GMT). We expect strong price movement in the medium term and recommend to wait for the moment for opening long positions.
Currency trading and the Japanese yen. The price of the Japanese yen after the recent strengthening amid the weakening of the US dollar began to fall against the backdrop of technical factors, as well as due to lower demand for defensive assets after the recent increase in oil prices. Tomorrow will be published important statistics on inflation in Japan, but a strong movement is predicted after the report on the growth of US GDP in the 4th quarter. Our medium-term outlook for the yen remains negative and we recommend accumulating long positions on the pair USD/JPY.
Currency trading and the Australian dollar. The price of the Australian dollar has stabilized against the background of the positive effect of the oil price recovery. Today was published data on private investment in Australia, which rose in Q4 by 0.8% against the forecast of decline by 0.3%. The potential of the Australian currency growth is limited due to the low prices of commodities and a possible decrease in interest rates of the RBA to maintain economic growth and inflation in the country. Our medium-term outlook remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar bounced up due to rising commodities prices and a slight weakening of the US dollar. Tonight (21:45 GMT) will be released a report on the trade balance of the country, which may lead to strong price movements. We see no reason to change the negative dynamics of quotations, and expect the decline in the medium term and in the near future.