26.11.2014 - In the US, consumer confidence has worsened
The price of euro yesterday showed increased volatility on the background of the release of a number of important data. Thus, GDP growth in Europe's largest economy was 0.1% in the third quarter, compared to the same period of last year the German economy grew by 1.2%, in line with forecasts of analysts. It is worth noting that the US GDP growth in Q3 was 3.9%, which is 0.6% better than expected and 0.4% more than the previous estimation. This statistics has strengthened the dollar against the euro, but the news of a sharp decline in consumer confidence in November to 88.7, compared with an expected 95.9 have led to growth of the euro against the dollar. Today, the central event of the day will be the publication of data on durable goods orders in October (13:30 GMT). We should also pay attention to the personal income and spending, initial unemployment claims (13:30 GMT), the consumer confidence index (14:55 GMT) and new home sales in the US (15:00 GMT).
The price of the British pound dropped yesterday on weak data on permits issued for mortgage lending. Thus, the figure dropped to 37.1 thousand, compared with an expected decline to 38.5 thousand. It is also worth noting the speech of the head of the Bank of England, who noted the possibility of reducing inflation to the level below 1.0%, but pointed out that the Bank of England is considering tightening of monetary policy. Support for quotations of the British pound came from weak data on US consumer confidence. Today in the UK will be published a second preliminary report on GDP growth in the country (09:30 GMT), as well as the balance of retail sales in the UK (11:00 GMT). We expect increased volatility today and look forward to new signals to determine the further movement.
The Japanese yen strengthened slightly against the background of the fall of the US dollar due to weak data on US consumer confidence. Despite this, the quotations continue to trade near seven-year low. Additional pressure on the price of the Japanese currency had a statement of the Bank of Japan board member Sayuri Shirai on supporting additional credit incentives by the central bank of the country. Today is expected the increase in activity due to the large block of data in the US, but tomorrow will be reduced volatility due to the holiday in the US. We maintain our medium-term negative outlook on the Japanese yen.
The price of the Australian dollar is near four-year highs after the deputy head of the Reserve Bank of Australia announced that the Australian dollar remains at high levels and the currency should be reduced in order to play a stabilizing role in the deterioration of the conditions of trade and investments. In addition, quotes are under the pressure of lower prices for iron ore, which is the main export commodity of the country and is heavily dependent on demand from China. We maintain our medium-term negative outlook for the Australian dollar and recommend holding short positions.
The New Zealand dollar fell sharply in recent days, but began to correct against the weakening of the US dollar after weak data on consumer confidence in the country. Another negative factor was the fall of the Australian dollar. The main reason for the weakening of the New Zealand currency remains low price of export products. Today, we expect increased volatility in connection with the publication of statistics on the country's trade balance (21:45 GMT), which is a key indicator for further movement. We maintain our medium-term negative outlook.