25.07.2016 - Volatility in the beginning of the week will be reduced
Currency trading and the euro. The price of euro shows a negative dynamics against the US dollar amid growing probability of the Fed raising interest rates this year. The reason for these dynamics is improving macroeconomic data in the US, as well as reduced fears about the consequences of the UK’s exit from the EU. The central event of this week will be the Fed's decision on interest rates, which will be published on Wednesday. We do not expect any changes in monetary policy parameters, but special attention should be paid to the rhetoric of the Fed. Today, little impact on the course of trading will have data on the index of business sentiment in Germany from the Ifo (08:00 GMT). Our medium-term outlook remains negative and we expect further reduction of quotations in the near future.
Currency trading and the British pound. The price of the British pound slightly corrected after the recent decline. The probability of resumption of growth in the coming months is minimum, and the upward movement is possible only within the correction due to the influence of the negative effects of the country's exit from the EU. Today, will be released the data on the balance of production orders in the country in July (10:00 GMT), which can affect the course of trading. Particular attention should be paid to this week's preliminary statistics for GDP growth in the UK in the second quarter, which will be published on Wednesday. We maintain our medium-term negative outlook.
Currency trading and the Japanese yen. The price of the Japanese Yen continued its decline against the US dollar, despite the publication of statistics on the trade balance of Japan, surplus of which totaled 0.33 trillion yen against the expected 0.24 trillion yen. The volatility this week will be increased in connection with the statements of the Federal Reserve on Wednesday and the Bank of Japan on Friday. In case of monetary easing by the Bank of Japan, the yen will continue to fall. We maintain our medium-term negative outlook on the Japanese currency.
Currency trading and the Australian dollar. The price of the Australian dollar continued consolidation in anticipation of the new signals. Investors will not rush to build up positions before the publication of the Fed's statement on monetary policy. The strong influence of the dynamics in the coming weeks will also have the situation on commodity markets, which traditionally has a significant impact on the Australian currency. Our medium-term outlook remains negative and we expect a further decline.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to consolidate within a narrow range after the decline of the previous days. Investors are waiting for the publication of important statistics on the trade balance in New Zealand (22:45 GMT), which may provoke a strong price movement after a long consolidation. The negative situation on the commodity markets and uncertainty about global GDP growth will constrain the positive movement of the New Zealand dollar. In addition, speculation about a possible reduction of the RBNZ interest rates will continue to adversely affect the course of trading. Our medium-term outlook remains negative.