25.07.2014 - U.S. labor market continues to please investors

Volatility of the euro yesterday rose strongly against the release of a number of important macro in the euro area and the United States. Thus, support for the European currency was provided by data on unemployment reduction in Spain by 1.4% in Q1 to 24.5%, the growth manufacturing PMI of the euro area by 0.1 to 51.9, and services PMI by 1.6 to 54.4 in July. Growth of the euro has stopped due to the strengthening of the U.S. dollar, after it became known that the number of initial unemployment claims dropped to its lowest level since February 2006 and amounted 284 thousand vs. forecasted 310 thousand. Housing market data disappointed investors as new home sales fell to 406 thousand against the expected 485 thousand. Dynamics of trading today will depend on the data on consumer confidence index (10:00 GMT) and business confidence in Germany (12:00 GMT), as well as statistics on durable goods orders in the U.S. (12:30 GMT). Medium-term outlook for the euro rem

The price of the British pound continued to decline due to weak retail sales in the country, which increased by 0.1%, which is 2 times worse than the forecast. At the same time accelerated decline due to the strengthening of the U.S. dollar after the publication of positive data on the labor market in the country. Today the course of trading can be affected by the preliminary data on the growth of the UK's GDP in the second quarter. Investors will also be monitoring the situation in Ukraine and the Gaza Strip. Fall of the British pound is likely to continue in the near future, but we maintain a positive outlook for the medium-term.

The Japanese yen weakened against the strengthening of the U.S. dollar, as well as weak data on the country's exports, which fell by 2.2% in June compared with the same period of the last year. During the same period, exports increased by 8.4% due to rising energy prices and falling yen. The consumer price index in June was 3.3%, in line with expectations. Given expectations of further monetary easing in Japan in autumn and the forecasted strengthening of the U.S. dollar, we maintain a medium-term negative outlook for the yen.

Growth of quotations of the Australian dollar, caused by positive statistics on the industry in China, was short-lived and the price rolled back. Bears were supported by a decrease in the price of gold, as well as reports of a possible strike on the key Australian Port Hedland’s terminals through which goes the supply of iron ore. On Monday, we should pay attention to statistics on new home sales in Australia. We maintain a long-term negative outlook with the objectives of 0.92 and 0.89.

The price of the New Zealand dollar stabilized after yesterday's sharp drop caused by the statement of the Reserve Bank of New Zealand to the significant potential for reducing the New Zealand dollar. Also yesterday, for the fourth consecutive time the RBNZ raised interest rates by 0.25% to 3.50%. Today it became known that the index of business confidence in the country fell to 39.7 in June, against 42.8 in May. We expect the price correction in the near future, after which the decline may resume.

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