25.05.2015 - Inflation in the US has led to an increase in the dollar
Currency trading and the euro. The price of euro after some consolidation has continued to fall against the backdrop of statistics on the core consumer price index in the US, which showed an increase of 0.3% in April, which is 0.1% above expectations. Rising inflation is a factor that increases the likelihood of an earlier raising of interest rates of the Fed. In addition, investors' attention is focused on the situation with the Greek debt crisis. Today in the United States and in the euro area is the day off and activity of investors on the market will be minimal. 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 is trying to change the negative trend to the positive and shows a decline amid the growth of quotations of the US dollar and the fall of the euro. The main factor that affects investors' expectations regarding the British currency is the probability of raising interest rates by the Bank of England. Today, in the UK a is a day off, and tomorrow will be published news on the balance of retail sales in the country. The central event of the week will be the statistics on GDP growth in the first quarter, which will be published on Thursday.
Currency trading and the Japanese yen. The price of the Japanese yen showed a slight fall today in connection with the further strengthening of the US dollar. Also today, was published the data on the trade balance deficit which in Japan was 0.21 trillion yen in April against expectations of 0.38 trillion yen. In the previous period the figure was at 0.01 trillion yen. GDP growth indicates a positive effect of loose monetary policy, which gives reasons for further stimulation of the economy. Our medium-term outlook remains negative and we are waiting for a drop in prices of the yen in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar continues to decline due to a number of fundamental factors. Thus, previously the Reserve Bank of Australia cut interest rates to 2.0%, the US dollar began to strengthen after a substantial downward correction, which in turn lowered the cost of commodities, the price of which has a strong influence on the Australian currency. We are likely to expect a further fall in prices and maintain the medium-term negative outlook.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar fell against the background of the US dollar after the release of statistics on inflation in America. Factors which continues to put pressure on quotations of the New Zealand currency is the expectation of lower interest rates by the Reserve Bank of New Zealand support economic growth. Today will be the published statistics on the trade balance of New Zealand (22:45 GMT), which will increase the volatility of the market. Our outlook remains negative with the immediate target of 0.72.