27.02.2015 - The dollar has sharply strengthened
The price of euro showed a sharp decline against the US dollar after the publication of a number of statistics in America. Thus, the volume of orders for durable goods in January rose by 2.8%, against a decline of 3.3% in December. At the same time, the consumer price index fell by 0.7% in January, which is 0.1% worse than the forecast, and the fall of the year was 0.1%, which was the first decline in inflation since October 2009. Statistics on reduction of the number of unemployed in Germany to 20 thousand, could not change the mood of traders. Today, in the focus will be statistics on US GDP growth (13:30 GMT), Chicago PMI (14:45 GMT) and the consumer confidence index (15:00 GMT). We expect a small correction today in the morning, but after the release of US data, the dynamics will probably resume. We maintain our medium-term negative outlook and recommend holding short positions.
The price of the British pound fell against the strengthening of the US dollar after the release of strong statistics on durable goods orders. At the same time, GDP growth in the UK in the 4th quarter of last year was 0.5%, which coincided with the previous estimate. Today we expect increased volatility due to the release of a large block of statistics from the US. The main negative factor for the pound remains weak euro. We expect continued growth in prices in the near future, but today a drop in prices may continue.
The price of the yen fell yesterday due to the strengthening of the dollar, and today was published the data on the growth of unemployment in Japan by 0.2% to 3.6%, a reduction of household expenditures by 5.1%, which is 1.1% worse than the forecast and drop in retail sales by 2.0% per year, against an expected decline of 1.2%. At the same time positive for investors was the statistics on industrial production growth of 4.0% in January, which is 1.1% better than expected. Given the expected tightening of monetary policy in the United States and its weakening in Japan, we maintain a medium-term negative outlook on the Japanese yen.
The price of the Australian dollar fell following the majority of world currencies against the strengthening of the US dollar after strong data on durable goods orders. The Australian dollar is under the pressure of the crisis in the construction sector in China, which leads to a reduction in purchases of raw materials from Australia and the fall in prices of these raw materials. On Monday, the course of trading will be affected by the data on the manufacturing sector in China, and the housing market in Australia. We maintain our medium-term negative outlook for the Australian dollar.
The price of the New Zealand dollar fell after strong growth the previous day, but remains in a positive trend. The reason for the stronger position of the New Zealand currency against the Australian is the statistics on the trade surplus of the country that was due to higher prices for dairy products. We expect further growth of quotations of the New Zealand currency and expect increased volatility today in connection with the release of important statistics in the United States.