27.05.2016 - Traders are waiting for the speech of Janet Yellen
Currency trading and the euro. The price of euro is consolidated against the US dollar, which is associated with the expectation of today's publication of the preliminary report on the US GDP growth for the 1st quarter of this year (12:30 GMT), as well as the speech by Fed chief Janet Yellen (17:15 GMT), which may affect expectations on the timing of the Fed raising interest rates. In addition, we should pay attention to the index of consumer confidence data for May (14:00 GMT). On Monday, in the US is a holiday, and investors' activity will be reduced. Our medium-term outlook for the euro remains negative due to the expectation of the Fed raising interest rates.
Currency trading and the British pound. The price of the British pound corrected after the recent strong growth caused by the wave of optimism about the results of the referendum on the country's membership in the EU, which will take place on 23 June. Also yesterday, the dynamics of trading was affected by the US dollar strengthening against the background of positive statistics on the volume of orders for durable goods, which unexpectedly rose by 3.4%, against expected 0.3%. On Monday, in the UK and the US is the day off and we do not expect strong price movements. In the coming weeks, the volatility will be increased and after the referendum on 23 June, we expect to see growth.
Currency trading and the Japanese yen. Price of the Japanese yen continued to consolidate against the US dollar despite the positive statistics on the volume of orders for durable goods in the United States, which supported the dollar. It is worth noting that today, was released the data on the core index of consumer prices in Japan, which totaled -0.3% in April, which is 0.1% better than expected. Deflation in the country will encourage the Bank of Japan to take new measures to stimulate inflation and consumer demand, which will lead to a decrease in the yen against the US dollar. According to our estimates, the yen's decline will continue in the medium term.
Currency trading and the Australian dollar. The price of the Australian dollar continues to consolidate due to the expectation of the important events in the US, as well as lower volatility in commodity markets, which traditionally strongly influenced the dynamics of trading. On Monday, it is worth paying attention to the statistics on new home sales. We recall that the construction sector is the key to the economy of the country because of a decline in investment in the resource sector. Our medium-term outlook remains negative due to the recent decrease in the interest rate of the RBA and expected tightening of monetary policy in the US and increasing the likelihood of falls in commodity markets in the near future.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar rebounded up after the recent decline. Obviously, investors expect new signal for opening positions. Given the low inflation in the country, the Reserve Bank of New Zealand may take a decision on lowering interest rates, which, together with an increase in the probability of tightening US monetary policy in June, may lead to a further drop in prices. We maintain our medium-term negative outlook.