28.06.2016 - Investors continue to assess the risks associated with Brexit
Currency trading and the euro. The price of euro has stabilized after the strong decline of the previous days after in the UK voted in favor of the country's exit from the EU. This fact increases the uncertainty on the market in connection with the possible desire of other members to leave the EU. Today, the dynamics of trading will affect the speech of the ECB chairman Mario Draghi (08:00 GMT), and the publication of the final report on the US GDP growth (12:30 GMT) and the index of US consumer confidence from Conference Board (14:00 GMT ). Our medium-term outlook remains negative and we expect a continuation of negative dynamics in the coming weeks.
Currency trading and the British pound. The price of the British pound corrected upwards after a strong decline within which reached its lowest levels since 1985. It is worth noting that the international rating agency Fitch downgraded the UK from "AA+" to "AA" with a negative outlook. At the same time, the forecast for GDP growth for the year was lowered by 0.3% to 1.6%, and in 2017 and 2018 the economy is likely to grow by 0.9% against the previous estimate of growth by 2.0%. The dynamics of the British currency price will depend on how will be organized the process of country's exit from the EU. Our medium-term outlook for the British currency remains negative and volatility will remain high.
Currency trading and the Japanese yen. The price of the Japanese yen recently was influenced by two main factors. On the one hand the demand for defensive assets like the yen has grown in recently and is likely to remain high, but on the other hand the US dollar continues to strengthen, which adversely affects the price of the yen. Earlier, the Japanese Prime Minister said about the need to use foreign exchange intervention to counteract the negative trends on the currency market, which significantly limited the potential for further strengthening of the yen. Tomorrow, on the dynamics of trading will affect the data on retail sales in Japan. Our medium-term outlook for the yen is a negative.
Currency trading and the Australian dollar. The price of the Australian dollar shows an increase within the correction. Investors fixed position after the strong price movements in the last trading session. Support for the Australian dollar has also become the oil prices rebound after the recent decline. Tomorrow we should pay attention to the statistics on new home sales in Australia. Our medium-term outlook for the Australian dollar remains negative.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar showed growth against the background of correction. Support for the quotes was the growth of the Australian dollar and a weakening US dollar. On Thursday will be published data on the index of business confidence in New Zealand, and in the coming days a major impact will have dynamics of commodity prices and the US dollar price. Our medium-term outlook for the New Zealand dollar remains negative.