25.06.2014 - Data on the housing market in the U.S. have strengthened the dollar
An attempt of the price growth euro yesterday has failed again. The growth of quotations was prevented by data from the U.S. Thus, new home sales in the U.S. rose at a record pace over the past 6 years and have made 504 thousand houses in May, with an expected growth to 442 thousand. We recall that the housing market is the key to the U.S. economy, as it gives a significant number of jobs and stimulates the development of a large number of other sectors of the economy. The consumer confidence index also rose in June to 85.2 that is 1.6 better than the forecast. Today, the mood of traders will depend on the data on durable goods orders and the final report on the dynamics of the U.S. GDP in the first quarter (12:30 GMT). We maintain a medium-term negative outlook, but assume continued growth in the short term.
The price of the British pound fell yesterday after the statement by the head of the Bank of England Mark Carney at the parliamentary session on inflation. In his speech, Mr. Carney said that terms of the rate increase will depend on the macroeconomic data and the pace of their increase. In addition, the increase will be limited and gradual. According to him, wage growth was worse than expected, and the strength of the pound is not supported by the growth of competitiveness. Today the course of trading may be influenced by the data on the balance of retail sales in the country (10:00 GMT). We revise our forecast and expect that in the medium term, the price will continue to move near the current levels.
Despite the strengthening of the dollar yesterday, the price of USD/JPY was unable to continue to grow and retreated down to the previous levels. Strengthening of the Japanese yen was contributed by the Prime Minister Abeâs speech, about a third "arrow" of reforms - reduction of corporate taxes. The dynamics of trading today will be affected by data from the U.S. and we expect that, despite the possibility of falling the price of USD/JPY in the near future, the price of a pair will grow in the medium term.
The Australian dollar resumed its decline against the weakness of the iron ore market in the world, as well as negative data from China, where the index of leading economic indicators declined to 0.7% in May, against growth of 1.0% in April. It should be noted that in Australia, was published the growth forecast of resource exports by 2.6%, which is expected due to the increase in production, but not to the growth of export prices. We assume the possibility of correcting the price today, but keep medium-term negative outlook on the national currency of Australia.
The price of the New Zealand dollar continued to decline following the Australian currency against the background of weak data from China. We recall that China is a major trading partner of New Zealand. The main export item of the country is food. Tomorrow night expected to be published the report on the trade balance of New Zealand, which traditionally will increase the volatility on the market. In the medium term the price will probably continue to decline.