29.09.2015 - Demand for the yen rose in response to falling stock markets
Currency trading and the euro. The price of euro showed growth after a speech by the Fed official Charles Evans in which he predicted the Federal Reserve not raising interest rates until the second half of 2016. At the same time, Daniel Tarullo expects the hike of interest rates this year. Personal consumer spending in August rose by 0.4%, which is 0.1% better than analysts' expectations, but personal income growth was only 0.3%, vs. expected 0.4%. Today, it is worth paying attention to statistics on the trade balance (12:30 GMT), an index for house prices in the 20 largest cities in the US (13:00 GMT) and the index of US consumer confidence from the Conference Board (14:00 GMT ). Growth of euro may continue in the near future, but we expect price decline in the medium term.
Currency trading and the British pound. The price of the British pound continued to consolidate yesterday and today investors are waiting for the release of statistics on the number of permits issued for mortgage lending (08:30 GMT) and the balance of retail sales in the country in September (10:00 GMT). More important block of statistics will be published tomorrow, which will restrain the activity of investors today. Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened against the backdrop of increased demand for defensive assets due to the fall on the stock markets, as well as news on the reduction of profits of Chinese industrial enterprises by 8.8% compared to the same period last year. Tomorrow the course of trading will be affected by the most important data on retail sales and industrial production in Japan. We maintain a medium-term negative outlook on the yen, but we can see a continuation of growth in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar continued to decline against the background of capital escape from commodities’ currencies, which is caused by problems in the Chinese economy, which is a major consumer of Australian exports. Tomorrow the course of trading will be affected by the news on the number of permits issued for construction of new homes in the country. Investors are waiting for the publication of important statistics on the industry in China, which will be released on Thursday. We expect the price decline of the Australian currency in the medium term.
Currency trading and the New Zealand dollar. The price of the New Zealand dollar continues to decline after recent gains. The reasons for the fall are technical factors and the fall of the Australian dollar. Tomorrow will be published data on the index of business confidence in New Zealand. We see no reason to change the negative trend due to the weakening of the monetary policy and weak data on the trade balance of the country. Our medium-term outlook remains negative.