The price of euro could not continue to grow and has overcome the psychologically important level of 1.10 and started to decline against the strengthening of the US dollar. The reason for the growth of the US dollar has become strong data on reduction of the number of initial unemployment claims in the US to 282 thousand against the expected 291 thousand. At the same time, the service PMI showed strong growth in March to 58.6 against 57.1 in February. Hawkish statements by the Fed also supported the US dollar. Today the dynamics of trading will depend on the final data for US GDP growth in Q4 (12:30 GMT) and speech of the Fed chairman Janet Yellen (19:45 GMT), which may hint at the timing of raising interest rates. We maintain our medium-term negative outlook for the euro.
The price of the British pound could not continue to grow, which was caused by strong data on retail sales in the country, which increased by 0.7% in February, against 0.1% in January. But price growth has changed to decline after the publication of strong statistics on the labor market and the service PMI in the US, which strengthened the US dollar. Today volatility will also be increased in connection with the release of data on the index of house prices in the UK (07:00 GMT), US GDP growth (12:30 GMT) and the speech of the heads of Bank of England (8:45 GMT) and the Federal Reserve ( 19:45 GMT). We expect a further fall in the price of the British pound in the near term and medium-term view remains negative.
The price of the yen stabilized after the publication of a large block of macroeconomic statistics in Japan. The unemployment rate fell to 0.1% in March to 3.5%, core consumer price index fell in February by 0.2% to 2.0% in February, while retail sales for the same period decreased by 1.8 %. Investors did not rush to accumulate positions before the release of data on US GDP growth and the speech of the Fed. The price movement of the Japanese currency in the near future will depend on expectations of the Fed raising interest rates. We maintain our medium-term negative outlook on the Japanese yen, but do not exclude the growth in case of deterioration of the geopolitical situation in the world.
The Australian dollar continued its decline against the US currency due to strong macro statistics in the United States and the statements by the Fed representatives on raising interest rates. Tightening of monetary policy in the US continues to be the main factor that puts pressure on the Australian dollar quotes. At the same time, the weak performance of the trade balance of Australia and the risks associated with a slowing of China's economy continues to negatively impact on the quotes the Australian currency. In this regard, we recommend holding short positions and maintain a medium-term negative outlook for the Australian dollar.
The New Zealand dollar declines against the strengthening of the US dollar and due to the lack of incentives for growth. Today, volatility will be at a high level in connection with the publication of important statistics from the US. It should be noted that the situation with the trade balance in New Zealand has improved significantly in recent months, but a surplus remains minimal. Further price movement will depend on the dynamics of the US dollar and the Australian dollar and the price of dairy products, which is the main export commodity group of the country. We are waiting for new signals to determine the medium-term price direction.