26.07.2016 - Volatility will be high in the coming days

Currency trading and the euro. The price of euro slightly increased against the dollar on the background correction after the recent decline, as well as in connection with the sale of dollars and buying yen. It should be noted that the data on the index of business confidence in Germany, which in July was 108.3 vs. expected 107.7, that pointed to the limited impact of the British referendum on the results of the German economy. Today a strong impact on the dynamics of trading will have data on new home sales and consumer confidence index from the Conference Board (17:00 GMT). Investors today will be constrained by the expectation of tomorrow's publication of the Fed on monetary policy. According to our forecasts, monetary policy settings will remain the same, but the Fed may hint at the timing of interest rate increase. Our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound slightly changed due to the lack of important events. Minor influence had the data on the balance of production orders in the UK that in July was -4, which is 2 better than expected. Today, it is worth paying attention to the number of permits for mortgage lending in the UK (08:30 GMT). Tomorrow is expected the increase of volatility in connection with the release of preliminary statistics for GDP growth in the second quarter and balance of retail sales in July. Our medium-term outlook for the British pound remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen showed a sharp appreciation after was reported stimulus package of 6 trillion yen, against the forecast of 10 billion yen. In addition, this program will be funded by supplementary budget, and not from the Bank of Japan, which strengthened the position of the Japanese currency. The main events of this week will be the statement of the Fed tomorrow and the Bank of Japan on Friday. Current prices may continue to strengthen in the near future, but the medium-term outlook remains negative.

Currency trading and the Australian dollar. The price of the Australian dollar started correction after strong reducing and consolidating earlier. Investors have decided to fix position amid the weakening US dollar. It is worth noting the important statistics on the consumer price index in the second quarter will be published tomorrow and weak inflation can lead to increased likelihood of interest rate cuts of the Reserve Bank of Australia. Our medium-term outlook remains negative, but the current upward movement will continue in the near future.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed a sharp rise after a long consolidation. This fact is caused by the growth of the US dollar, as well as fixing positions after a strong decrease in the previous days. It should be noted that the data on the trade balance in New Zealand is almost in line with expectations. Thus, the surplus totaled 127 million against the forecast of 127 million. The volatility of this week will be increased. Our medium-term outlook remains negative, but we expect a continuation of the current correction.

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