28.03.2014 - The dollar has strengthened on labor market data
Major U.S. stock indexes finished the trading session with a slight decrease. The energy sector has been supported by rising oil prices, and the financial sector dipped on the background of stress - tests, by results of which, some banks will not pay dividends, while others will be forced to reduce them. At the same time, most of the banks have been successfully tested.
The quotes of the euro has dropped below the level 1.3750 due to the data on the number of unemployment claims in the United States, which dropped to 311 thousand against the forecast of 326 thousand and an increase in GDP by 2.6%, which is 0.1% worse than the forecast and 0.2% better than the previous result. Today, the course of trading may be affected by data on personal spending and income of consumers, as well as consumer confidence in the U.S. (13:55 GMT).
the focus will be on data on consumer inflation in the euro area, industry of
Japan and the labor market of Great Britain and Japan. Considering recent
statements by representatives of the ECB, traders are closely watching at the
data on inflation in the Eurozone. In case of growth of deflationary risks, the
regulator can use new tools to support the economy, which will lead to a
The British pound strengthened on the background of strong growth in retail sales in February by 1.7%, compared to the forecast of growth of 0.5% and the previous drop by 2.0%. Despite this, the growth was partially offset by strong data on the labor market and the growth of the U.S. GDP. Today, we expect increased volatility due to the release of data on UK GDP, balance of payments and business investment in the UK (13:30 GMT). The price movement in the medium term will depend on macroeconomic statistics which will be published today. We maintain a long-term positive outlook for the British pound.
Mixed macro data from Japan have increased the volatility of the pair but the price of USD/JPY continued its movement around the level of 102.15. Thus, household spending fell by 2.5%, the unemployment rate declined by 0.1% to 3.6%, retail sales fell by 0.8% to 3.6%, while consumer price inflation remained at 1.3%. We need new signals to determine the further price movement. At the same time, considering the reduction in the program of quantitative easing in the U.S. and Bank of Japan's policy aimed at the growth of the monetary base by 60-70 trillion. Yen over the year, we keep long-term positive outlook for the USD/JPY.
The quotes of Australian dollar has almost reached the level of 0.93, but started to correct and will likely continue to decline in the near future. The positive of the recent days was caused by the report of the Reserve Bank of Australia on financial stability, as well as Glenn Stevens', statement concerning the fact that the value of the mining sector in the growth of the economy become less. Traders also expect new measures to stimulate the economy in China, which should have a positive price factor for the Australian currency. We expect decrease in quotations of AUD/USD in the near future.
The New Zealand dollar continues to strengthen on the background of yesterday's publication on the growth of the country's trade surplus. Support for prices has also the strengthening of the Australian dollar and speculation about the support of the Chinese economy. We maintain our positive outlook for the NZD/USD in the medium-term.
The price of Light Sweet crude oil rose on positive data on the labor market and the growth of economy in the United States. In addition, the quotes were supported by the statement of Barack Obama on the preparation for tougher sanctions against Russia. At the same time the supply of oil from Nigeria and Libya keeps falling but at the same time, Iran is increasing the volume of exports of black gold on world markets. New risk for the oil prices have become the possible sales from strategic reserves in the United States. According to experts, the sale of 500 thousand barrels of oil per day can drop the quotes by $ 12 per barrel. We maintain a long-term negative outlook for oil.
The price of gold continues to fall in a downtrend and reached 1290 dollars per troy ounce. One of the reasons for a drop in prices was the strengthening of the dollar against positive data on the U.S. labor market. At the same time, the price continues to fall after the U.S. Federal Reserve meeting at which was decided to reduce the quantitative easing program by 10 billion to $ 55 billion and was announced the possibility of an earlier Fed rate hikes. After completion of the correction, we expect renewed growth and maintain a long-term positive outlook for gold.