29.07.2014 - ​Unemployment in Japan rose unexpectedly

The price of euro yesterday remained almost unchanged due to the fact that investors expect important macro on Wednesday, when will be published data on GDP growth and new jobs in the U.S. economy, and the Fed will make a statement on monetary policy, which will probably again point to the reduction of quantitative easing by 10 billion dollars to 25 billion. Reduction in the number of pending home sales on secondary market in the U.S. by 1.1% in June, compared with an expected decline of 0.2%, slightly weakened the dollar, but we will not see a sharp price movements until Wednesday. Today we should pay attention to the house price index in 20 major U.S. cities (13:00 GMT) and the Consumer Confidence Index (14:00 GMT). The price movement in the coming days will depend on the data from the U.S., but in the medium term, we expect a decline in the euro price.

The price of the British pound stabilized and even slightly corrected upwards against weaker than expected data on the U.S. housing market. Today the course of trading will be affected by data on the number of permits issued for mortgage lending and consumer lending loans to individuals in the UK (8:30 GMT). For the further reduction will be needed a significant stimulus, so we expect that today the price of the British pound will not be greatly reduced. Medium-term outlook remains positive with the objectives of 1.72 and 1.73.

The price of the yen continues to fall gradually due to the important macro, which was published today. Thus, the unemployment rate unexpectedly increased by 0.2% to 3.7% in June, while retail sales has fallen by 0.6%, against the forecast of decline of only by 0.4%. Negative sentiment slightly softened data on household expenditures, which fell by 3.0%, which is 0.7% better than expected. In general, reduction of quantitative easing in the U.S. and continued increase of liquidity in Japan will lead to the continuation of the devaluation of the yen. It is expected that in the autumn in the Bank of Japan will launch a new program to support the economy, which gives reason to keep medium-term negative outlook for the yen.

The price of the Australian dollar slightly corrected upwards yesterday after a strong decline in the previous days. Despite this, the downward movement again resumed, and the price is likely to continue to fall even after the release of data on new home sales which rose by 1.2%, against a fall of 4.3% in May. Further movement of the Australian dollar will depend on data from the United States, which will be released tomorrow and statistics on the manufacturing PMI in Australia and China, which will be published on Friday. We maintain our negative outlook for the medium-term with objectives of 0.92 and 0.89.

The price of the New Zealand dollar, after a strong decline has stabilized near the level of 0.8560. The sharp fall was caused by a statement of the Reserve Bank of New Zealand on a significant potential for decline of the national currency. In addition, the trade surplus has been steadily decreasing, but still the majority of macroeconomic indicators remain strong and support the New Zealand dollar. Increase in volatility is expected tomorrow and we anticipate new signals to determine future price movement.

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