25.08.2016 - Investors are waiting for the Fed’s chairwoman speech tomorrow
Currency trading and the euro. The price of euro showed decline against the US dollar after was published statistics on new home sales in the US, which rose to its highest level in nearly 10 years. It is worth noting that data on GDP growth in Germany in the second quarter by 0.4%, which is 0.1% better than expected, could not change the mood of investors. Today, the focus will be on the statistics on the volume of durable goods orders in the US (12:30 GMT), but investors' activity will be constrained by the expectation of future speech of Janet Yellen on economic symposium in Jackson Hole. In case of the Fed chief’s hints about raising interest rates this year, the euro will show a strong decline. Our medium-term outlook remains negative and we expect the growth of volatility tomorrow.
Currency trading and the British pound. The price of the British pound continued to rise against the background of euro selling in the pair EUR/GBP and despite the reduction in the number of mortgage lending approvals in the UK to 37.7 thousand in July, against 39,8 thousands in June. Today will be published data on the balance of retail sales in the UK (10:00 GMT), but more important is the preliminary report on the growth of GDP, the release of which is scheduled for tomorrow. The main influence on the course of trading in the coming months will have the news regarding the country’s exit from the EU's plans and the dynamics of the US dollar. Our medium-term outlook for the British pound remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen showed a slight decrease on the background of the statistics on the growth of prices for corporate services in the country at 0.4% in July, which is 0.3% more than the forecast of analysts. An additional factor that has led to a decrease in the Japanese currency became speculation about the possibility of hawkish rhetoric of the head of the Fed while tomorrow's speech in Jackson Hole. After a long consolidation, we expect a rise in volatility tomorrow, which in addition to external factors can be caused by the publication of data on the consumer price index. Our medium-term outlook remains negative for the yen, but the fall on the stock markets can lead to a sharp increase in demand for defensive assets.
Currency trading and the Australian dollar. The price of the Australian dollar showed a slight increase due to the news about the availability of abundant liquidity from the People's Bank of China, to support growth in the world's second largest economy, which is the main buyer of Australian exports. The impact on the dynamics of prices will be the prices for commodities, as well as the dynamics of the US dollar, the volatility of which according to our estimates will grow strongly tomorrow. Our medium-term outlook remains negative and we expect a strong movement in the coming days.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to consolidate in anticipation of the new signals. The amplitude of price fluctuations is reduced, leading to a strong movement after the current consolidation. Given the recent publication of negative statistics on the trade deficit and the likely continuation of the reduction of the Reserve Bank of New Zealand’s interest rates, we expect a fall in the price of New Zealand currency in the medium term and in the near future.