25.11.2014 - Today will be published preliminary data on US GDP growth
The price of euro yesterday showed corrective gains, which was supported by the positive statistics index business sentiment in Germany to 104.7, against the forecast of 103.0. It should be noted that this figure was down for 6 months. The reason for the improving sentiment became weakening of the euro and the fall in oil prices. Today, the course of trading will be affected by the data on GDP growth in Germany in the 3rd quarter (07:00 GMT), as well as news on retail sales in Italy (09:00 GMT). Particular attention should be paid to statistics on the US GDP growth (13:30 GMT) and the consumer confidence index (15:00 GMT). Despite the decrease in potential drop in the near future, we keep negative medium-term outlook for the euro and recommend holding short positions.
The British pound yesterday showed a slight increase on the weakening of the US dollar and the absence of publication of important macroeconomic data. Stopping of the reduction and long-term price consolidation indicates the decrease of potential for further falling and weakness of bears. Today, we are likely to see increased volatility in prices in connection with the speech of the head of the Bank of England at the parliamentary session on inflation (10:00 GMT). The course of trading may also be affected by the data on the number of permits issued for mortgage lending in the UK (09:30 GMT). The construction sector is one of the main drivers of growth in the UK economy in recent years. We expect a decline in prices in the near future, but its potential remains low.
The Japanese yen strengthened after publication of minutes of the previous meeting of the Bank of Japan which stated that further easing of monetary policy may have a more negative impact on the economy than positive. Despite the recent decline in GDP figures in Japan, the government has kept assessment of the economy in the country. The most important day this week will be Friday, when will be published data on unemployment, consumer price index, retail sales and industrial production in the country. We maintain our medium-term negative outlook on the yen.
The Australian dollar was unable to continue growth after news of lower interest rates in China, which should support the growth of the economy. The country's economy continues to be under the pressure of such negative factors as insufficient levels of employment, the decline in investment in the mining sector, weak growth in the construction sector in Australia and low commodity prices. The main risk for the Australian dollar is the deterioration of the situation in the construction sector in China. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions.
The New Zealand dollar continues to decline for the second trading session amid falling export prices, which could not continue to grow, despite the statement by the People's Bank of China on the lowering of interest rates. At the same time, a negative for quotations were the news about the decline in the index of inflation expectations in the country for the next 2 years to 2.1% against the previous estimate of 2.2%. This fact reduces the likelihood of higher interest rates of the Reserve Bank of New Zealand, who had previously planned to increase the rate of 1.0% per year. We maintain our medium-term negative outlook on the New Zealand dollar.