28.05.2014 - The dollar has strengthened on the increase of orders
The price of euro fell yesterday on positive data from the U.S., which led to a strengthening of the U.S. dollar. Thus, the durable goods orders rose in April by 0.8% against the forecasted decline by 0.5%. The reason for the growth was the increase in purchases of military goods (39.3%) and the cost associated with recovery after a harsh winter. House price index rose in March by 0.7%, which is 0.1% better than expected, and the business activity index remained unchanged at 7. Today, the course of trading may be affected by the data on the number of unemployed in Germany (7:55 GMT) and the M3 money supply in the Eurozone (08:00 GMT). We keep medium and long term negative outlook for the euro.
The price of the British pound fell heavily yesterday against the strengthening U.S. dollar. Additional reason for the decline was the decrease in the number of mortgage approvals in the UK to 42.2 thousand, which is 3 thousand less than the forecast. Today, in the center of the attention of investors will be the letter of the Bank of England on inflation and data of retail sales (10:00 GMT). We expect growth of quotations of the British pound today and keep medium and long-term positive outlook for the pound.
The price of USD/JPY continues to consolidate around a strong level of 102.00. The quotes of pair tried to continue the growth against the dollar strengthening, but returned to previous levels and are waiting for new signals. Tonight (23:50 GMT), will be released the data on retail sales, which may lead to increased volatility. We expect growth of the price of pair soon and keep the medium and long-term positive outlook.
The price of the Australian dollar also continues to consolidate in a narrow channel. Support for the Australian currency is provided by news from China, where the profit of the largest companies rose in April by 1.1%. Despite this, traders negatively estimate decline in iron ore prices on the world markets. Investors were also disappointed by the fall of the index of leading economic indicators in March by 0.5%. We maintain a medium-term negative outlook for the pair.
The price of the New Zealand dollar continues to consolidate around the level of 0.8550. Strengthening of the U.S. dollar has led to decline in the prices of the pair. In addition, investors reacted negatively to the fall of the business confidence index in New Zealand in April to 53.5, against 64.8 in March. We maintain a medium-term negative outlook for the pair and recommend holding short positions.