27.01.2015 - The volatility of the British pound today will grow
The price of euro corrected upwards after the victory of the opposition party Syriza in the elections in Greece. On the one hand Syriza said about maintaining their position against the austerity measures in the country, but on the other hand will not insist on the exit from the Eurozone. European currency was also supported by news about the growth index of business confidence in Germany in January to 106.7, which coincided with forecasts of analysts. Today, it is worth paying attention to statistics from the United States on durable goods orders (9:30 GMT), new home sales (15:00 GMT) and the consumer confidence index from the Conference Board (15:00 GMT). Our medium-term outlook remains negative due to the quantitative easing program, which will continue to put pressure on the quotes of euro.
The price of the British pound has started to grow in the early weeks after failed to gain a foothold below the psychologically important level of 1.50. Investors decided to fix short positions before the publication of important data today. Thus, in the focus of traders will be preliminary statistics for GDP growth in the UK in Q4 2014 (09:30 GMT). Statistics from the US will also lead to an increase in price volatility. Despite the medium-term negative trend, quotations may show a continuation of the upward movement of prices in the near future. Our medium-term outlook remains negative.
The price of the Japanese yen continues to consolidate and oscillation amplitude is steadily reduced. The slight strengthening of the yen today was caused by the statement the Minister of Economy of Japan Akira Amari about the lack of clear timeline of increasing the inflation rate to 2%, which indicates that there is no need of an earlier easing of monetary policy. Today the dynamics of trading will depend on the statistics from the US. We maintain our medium-term negative outlook on the yen, but do not exclude the growth of the Japanese yen against the backdrop of increased demand for defensive assets.
The price of the Australian dollar has stabilized after a sharp decline amid expectations of steps on the softening monetary policy by the Reserve Bank of Australia. Earlier, the Bank of Canada decided to reduce the interest rate from 1.0% to 0.75%, in order to maintain economic growth in the country against the fall of oil prices. Australian currency is under the pressure from low iron ore prices and a drop in prices of copper. Investor sentiment have been improved by the data on the index of business confidence in Australia which rose to 2 in December, versus 1 in November. It is worth noting that the increase in the index of leading economic indicators in China supported the Australian currency quotes. We maintain our medium-term negative outlook and recommend holding short positions.
The price of the New Zealand currency has stabilized above 0.74 after the strong decrease caused by the expectation of lower interest rates by the Reserve Bank of New Zealand. Statistics from China's growth of index of leading economic indicators by 1.1% in December, compared with 0.8% in the previous period supported the New Zealand currency. Investors did not rush to accumulate positions before the announcement of the Reserve Bank of New Zealand, which will be published tomorrow night and will lead to a strong increase in volatility. We maintain our medium-term negative outlook and recommend holding short positions.