27.06.2016 - The markets continue to assess the impact of the British referendum

Currency trading and the euro. The price of euro showed a decrease for the first day of the week amid growing fears of a negative impact of the UK’s exit from the EU after the referendum, in which almost 52% supported the idea of the country's exit from the largest economic bloc. In addition, negative for the euro has become the US dollar growth against the background of the outflow of funds from the European assets to the American. Today, little impact on the dynamics of trading will have data on the US trade balance (12:30 GMT) and the service PMI in the US (13:45 GMT). The central event of the day will be the speech of the ECB President Mario Draghi (17:30 GMT) which will include assessment of the situation that arose after the referendum in the UK. Tomorrow will be released the final report on the growth of US GDP for Q1. We expect the fall of the euro in the near future and medium term.

Currency trading and the British pound. The British pound showed price drop today against the background of strengthening the negative expectations of the investors, due to the results of a referendum on the country's membership in the EU. It is worth noting that the speculation about the process of the country’s exit and the possibility of holding a second referendum will be to maintain the volatility of the pound at a high level. It is worth noting that the Bank of England is ready to provide 250 billion pounds of additional liquidity with to limit the risks to the financial system. A number of major banks announced the transfer of the central offices in Europe from London, which will also have a negative impact. We expect a further drop of the British currency prices and continued high levels of volatility.

Currency trading and the Japanese yen. The price of the Japanese yen after recent gains on the background of the increased demand for defensive assets, stabilized against the background of statements by Prime Minister Shinzo Abe on instruction to stabilize the situation on the currency market and the use of foreign exchange interventions, if necessary. In addition, the negative impact on the price of the yen has the rise of the US dollar and the increase in the probability of further easing of monetary policy of the Bank of Japan in July. Strengthening of the yen is a strong negative factor for the local economy, and we expect a resumption of the negative dynamics of prices in the near future.

Currency trading and the Australian dollar. The price of the Australian dollar continued to show a drop in connection with the strengthening of the US dollar and falling commodity prices. A factor that supports the Australian economy was the increase in gold prices, the demand for which has grown enormously. In the near future volatility on commodity markets will rise and fall is likely to continue. After strong growth in previous months, investors are fixing long positions. We expect a further decline of the Australian dollar and maintain the medium-term negative outlook.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar today showed decline on the background of pressure on commodity prices and the strengthening of US dollar. Part of this negative was offset by the data on the trade balance of the country in May, the surplus of which totaled 358 million against the forecast of 185 million. In the near future the dynamics of prices will depend heavily on external factors, and after strong growth in previous months, we can see the continuation of the correction of the prices of the New Zealand dollar.

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