26.05.2016 - Optimism regarding the referendum in the UK supports the pound
Currency trading and the euro. Price of euro showed growth against the US dollar on the background of correction, positive news about the consensus on the providing of financial aid to Greece with tranche of 10.3 billion euros, as well as the weakening of the US dollar in relation to the publication of weak data on the service PMI of America in May, which according to preliminary fell to 51.2, which is 1.6 less than the previous forecast. Today, the course of trading will affect the volume of orders news on durable goods (12:30 GMT), and tomorrow will be released the data on US GDP growth in Q1 and the Fed chief Janet Yellen will speak that will lead to strong movements in the market price. Our medium-term outlook for the euro remains negative.
Currency trading and the British pound. The price of the British pound continued to rise against the backdrop of optimism about the results of the referendum on the UK's membership of the EU. In addition, previously the head of the Bank of England Mark Carney said that the next step of the central bank in case event of a vote against the country's exit from the EU will be increasing interest rates, which will lead to a rise of the pound. Today will be published a preliminary report on GDP growth in the 1st quarter (08:30 GMT), which will lead to an increase in volatility. We expect increased volatility in the run-up to the referendum and the growth of the British currency price after the meeting.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened against the background of the US dollar correction due to technical factors and poor statistics on business activity in the service sector. Tomorrow, will release a report on the consumer price index in Japan, as well as news on the growth of US GDP. Strong influence on the dynamics of trading is also likely to have speech of the Fed chairwoman, which can strengthen or weaken confidence in raising interest rates during the next Federal Open Market Committee meeting. Our medium-term outlook for the Japanese currency remains negative due to the loose monetary policy of the Bank of Japan and weak macroeconomic data in the country.
Currency trading and the Australian dollar. The price of the Australian dollar showed a slight increase due to the weakening of the US dollar with the improvement of the situation on the commodity markets. It is worth noting that investments in construction in the country fell in Q1 by 7.9% vs. expected decline by 3.0%. Dynamics of the Australian currency still depends on the movement of the US dollar, which is likely to continue to strengthen and the situation on commodities market, where there is a risk of falling in the near future. In this regard, save negative medium-term outlook for the Australian dollar.
Currency trading and the New Zealand dollar. Price of the New Zealand dollar resumed its fall after the recent rebound from the strong support level around 0.6720. The reason for the decrease was the publication of the draft state budget of the country. Low inflation may lead to a reduction of the Reserve Bank of New Zealand interest rates, together with the expected strengthening of the US dollar may be the main reasons for the continuation of the negative dynamics of price of the New Zealand dollar in the medium term.