27.07.2015 - The US dollar weakened after disappointing data on new home sales
Currency trading and the euro. The price growth in the euro shows the weakening of the US dollar. The reason for the fall of the US currency was the publication of a report on new home sales in America. So, in June the number was 482 thousand vs. anticipated 543 thousand. Even so, compared with last year, sales increased by 18.1%. Today, the course of trading will be affected by the data on the index of business sentiment in Germany from the Ifo (08:00 GMT) and important statistics on the volume of orders for durable goods in the US (12:30 GMT). Investor activity will be constrained by the expectation of the Fed's monetary policy on Wednesday. Our medium-term outlook for the euro remains negative and we recommend to open short positions.
Currency trading and the British pound. The price of the British pound is corrected upwards after a decline, which was caused by weak statistics on retail sales. It is worth noting that analysts forecasts growth of GDP in the second quarter by 0.7%. Tomorrow is expected the increase in activity of investors in connection with the release of statistics on the growth of the economy. Today, the course of trading will be affected by the news on the balance of production orders in the United Kingdom (10:00 GMT). According to our forecasts, the price decline will continue in the medium term, but we do not exclude the growth in the next few days.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened against the US dollar due to weaker statistics on the housing market in the country. Despite this, the price growth of the Japanese currency is limited by general negative investors’ expectations. The demand for protective assets is low. The main event of this week will be the Fed's statement on monetary policy in the US, which will lead to a strong price movement. We expect the price decline of the yen in the medium term against the backdrop of the expected strengthening of the dollar and the loose monetary policy of the Bank of Japan.
Currency trading and the Australian dollar. The price of the Australian dollar decline has stopped and adjusted upward amid the weakening of the US dollar. In the first half of the week is expected the release of important statistics in the country and the dynamics will depend on the US data and the Fed's monetary policy. The main negative for the Australian dollar remains low prices of export commodities such as iron ore, copper, gold and other, as well as expectations of further easing of monetary policy in the country. Our medium-term outlook is negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar is corrected upwards this morning due to the decrease of the US dollar. It is worth noting that the New Zealand currency quotes are moving within a sustainable downtrend. The decrease is due to two main factors - lower prices for dairy products, which is the main export commodity and the weakening of the monetary policy by the Reserve Bank of New Zealand. We maintain a medium-term negative outlook and recommend holding short positions.