29.09.2014 - The Reserve Bank of New Zealand has made a significant intervention
The price of euro continued to decline and reached its lowest level in 22 months. In general, the main reasons for the decrease are the difference in the monetary policy of the USA and the euro area, as well as the improvement of macroeconomic indicators in the United States, against the background of weak data from the Eurozone. Thus, on Friday was released the final data on GDP growth in the United States by 4.6%, which was the highest figure since the 4th quarter of 2012. At the same time, the index of consumer confidence in the United States has remained unchanged - 84.6, with an expected growth to 85.1. This week, the main event will be the publication of data on unemployment in the euro area and the United States, as well as the ECB's decision on interest rates. Today the course of trading will be affected by the data on personal income and consumer spending in the United States (12:30 GMT). We maintain a medium-term negative outlook for the euro and recommend holding short positions.
The price drop of the British pound resumed amid strengthening of the dollar. Today, market volatility will be low. The course of trading can be affected by the data on mortgage lending approvals in August (08:30 GMT). Most important day of the week will be Tuesday, when will be released statistics on balance of payments, business investments and UK GDP. We expect recovery of lost positions on the British pound in the medium term.
The Japanese yen continued to decline on a background of positive statistics on GDP growth in the United States in the second quarter. Also on Friday, was published the data on core consumer price index, which showed a decline by 0.2 % to 3.1% in August. At the moment, the price of the yen is about a 6 year low. Tonight will be published a large block of macro data on household expenditures, retail sales, unemployment, industrial production and housing market. We maintain a medium-term negative outlook for the Japanese yen, and see no reasons for the change of the current trend.
The price of the Australian dollar continued its decline against the greenback due to positive data from the United States. At the same time, investors are negative about the risks to the Australian economy, which are associated with a slowdown in industrial growth in China and a fall in iron ore prices. This week, we should pay attention to the data on the index of business activity on Wednesday and balance of trade on Thursday. We expect continued downward movement of the price of the Australian dollar and maintain a medium-term negative outlook.
The price of the New Zealand dollar fell sharply after it became known that the Reserve Bank of New Zealand in August, has sold 521 million New Zealand dollars, which was the largest intervention since 2007. This event has indicated a willingness of RBNZ for real steps to reduce the rate of the national currency. Given the earlier statements of the central bank of the country, we expect further price decline of the New Zealand dollar in the medium term, which also contributes to the negative trade balance and low export prices.