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27.06.2014 - ​The yen strengthened after the release of a large block of data

The price of euro corrected yesterday in connection with the labor market data and consumer spending in the United States. Thus, the number of initial claims for unemployment dropped to 312 thousand, that is 2 thousand less than the previous figure. Consumers personal income increased by 0.4% in May, compared with an expected rise by 0.5%, but personal spending rose by only 0.2% compared to the expected growth of 0.4%. This fact indicates that Americans continue to save more than they spend. Today in the European Union continues the summit of union members, the news from which may affect the course of trading. We should also pay attention to data on consumer confidence in the U.S. (13:55 GMT). Today is possible strengthening of the euro, but in the medium term, we expect a decline in price of currency.

On Monday, we should pay attention to the data on consumer prices and M3 money supply in the euro area, the volume of industrial production in Japan, the credit market in the UK

Euro and Dollar Index Chart

The British pound continued its growth after the speech of the head of Bank of England Mark Carney. Mr. Carney in his statement announced new measures to deal with a possible bubble on the real estate market. Now the requirements for obtaining a loan for buying a home will be more stringent, that will be limiting access for irresponsible borrowers and in case of further price rises, will protect the housing market from a crisis. We maintain a medium-term positive outlook for the pound, but admit the possibility of a minor correction today.

The Japanese yen strengthened significantly after the release of contradictory statistics. So, household spending fell by 8.0% in June, which is associated with an increase in the sales tax in April. Inflation rate remained at 2.8%, and the unemployment rate declined by 0.1% to 3.5%. Retail sales fell in May by 0.4%, which is 1.5% better than expected. Current indicators may be distorted due to the increase of the sales tax by 3% in April to 8%. Influence of this factor will gradually decline. The potential for further reduction is limited and we expect that the price of the yen will resume the decline in the medium term.

The Australian dollar continues to grow amid the rally in iron ore prices, which exceeded 95 dollars per ton and continues to grow. Yesterday's data on the growth of new jobs by 2.5% also supported the bulls. Despite the current upward momentum, the price of raw materials remains at fairly low levels and the economy is growing very sluggish. Due to these factors, and considering the previous growth, at the moment there is a great probability of price correction in the near future. We maintain a medium-term negative outlook.

The New Zealand dollar extended gains, and was supported by positive data on the country's trade balance surplus in May which has made 285 million, that is 35 million more than the forecast. At the same time, the price reached the maximum since 2011. Further growth is likely to be constrained by the regulator, so despite the fundamental prerequisites, we do not recommend to open long positions on the New Zealand dollar and expect price correction in the medium term.

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