28.01.2015 - Fed statement of the Fed and RBNZ will be in focus of traders
The price of euro showed growth against the background of the fall of the US dollar due to weak data on durable goods orders, the volume of which has fallen by 3.4% in December, compared with an expected growth of 0.6%. Positive statistics on the growth of sales of new homes in the US to 481 thousand in December, against the expected 452 thousand and the growth of consumer confidence in January to 102.9, at the forecast of growth to 95.3. Today, the focus will be on US Federal Reserve statement on monetary policy (19:00 GMT). We do not expect a change of rhetoric of the Fed. The course of trading may also be affected by the news on consumer confidence in Germany (07:00 GMT). Correction of the euro may continue in the near future, but the medium-term view remains negative with a target at 1.10.
The price of the British pound rose yesterday, despite the weak data on GDP growth in the 4th quarter, which was 0.5%, compared with an expected growth of 0.6% and increase of 0.7% in Q3. The reason for the growth was the fall of the US dollar against the background of data on reduction of durable goods orders. Today, the focus will be on the Fed's statement on monetary policy, which can announce timing of the start of raising interest rates or its postponement. We expect the resumption of the downward movement of the British pound and the fall following the euro in the medium term.
The price of the Japanese yen continues to consolidate near the levels of the previous days despite the weakening of the dollar against other major currencies. On the one hand the fall of the dollar supports the yen, but on the other hand, investors are now less concerned about the situation in Greece, where have won the opposition forces. Despite the current decline in demand for defensive assets, potential problems with the restructuring of Greek debt and rising tensions over the conflict in Ukraine may lead to another growth of the yen as a safe asset. Today, it is worth paying attention to the statement of the Fed (19:00 GMT), and tomorrow will be published data on retail sales in Japan. We maintain our medium-term negative outlook on the Japanese yen.
The price of the Australian dollar increased and reached the psychologically important level of 0.80. The reason for the growth of the currency was the weakening of the US dollar, as well as the publication of data on the consumer price index in Australia, which grew by 0.2% in the 4th quarter against the expected growth of 0.3%. Tomorrow will be published index of leading economic indicators of Australia. Today, the course of trading will also be influenced by the movement of the US dollar and the statement of the Reserve Bank of New Zealand (20:00 GMT). In case of lower interest rates in New Zealand, the Australian dollar will fall in price. We maintain our medium-term negative outlook for the Australian currency.
The price of the New Zealand dollar indicates low volatility. Investors did not rush to build up positions before the statement of the Reserve Bank of New Zealand on monetary policy. Traders are waiting for lower interest rates following the Bank of Canada to support economic growth in the country. We do not expect such a move by the regulator, which in turn can lead to a sharp rise in prices. In addition it is worth paying attention to the data on the trade balance of the country (21:45 GMT), where traditionally is expected a deficit, which could lead to a weakening of the national currency. We expect strong growth of volatility today and save a medium-term negative outlook.