30.04.2015 - Weak growth in the US economy has led to the fall of the US dollar
Currency trade and the euro. The price of euro showed steady growth on the background of weak statistics on the US GDP growth, which in Q1 2015 rose by only 0.2% against the forecast of growth by 1.0%. It is worth noting that the dollar's decline was limited by a statement of the US Federal Reserve indicated on the temporary factors that have led to such reduction. The main reasons for the fall were the reduction of the growth rate of investments, drop in exports by 7.2% against growth of 4.5% in the 4th quarter of last year. At the moment, analysts expect later the Fed raising interest rates, which supported the euro. Today, volatility is increased in connection with the release of important statistics on the labor market and the consumer price index in the euro area (09:00 GMT). In the United States we should pay attention to the data on the labor market and personal income and consumer spending (12:30 GMT). Our medium-term outlook remains negative for the euro in relation to the program of quantitative easing and we expect a resumption of the downward movement of the euro in the near future.
Currency trade and the British pound. The price of the British pound continued its steady growth amid the weakening of the US dollar after the publication of weak statistics on the growth of GDP, as well as in connection with the release of data on the growth of house prices in the UK by 1.0% in May, which is significantly better than expected 0.2%. The balance of retail sales in April was 12, against the forecast of 26, but this fact could not change the positive sentiment. Consumer confidence in the UK remained at the level 4, which is 1 worse than expected. It is worth noting that the price of the British currency has reached an important level of 1.50 and after some consolidation is likely to begin to correct downwards. We expect additional signals for determining the medium-term price direction of the British pound.
Currency trading and the Japanese yen. The price of the Japanese yen strengthened slightly, despite the sharp drop in the US dollar caused by the weak data on GDP growth. This fact shows the weakness of the Japanese currency and the lack of preconditions for its further growth. The Bank of Japan left monetary policy settings of the country unchanged. The volume of industrial production in March decreased in the country by only 0.3%, against an expected decline of 3.4%. Tomorrow volatility may increase due to the release of data on inflation, unemployment and household expenditures. Our medium-term outlook for the yen remains negative and we expect a fall in the near future.
Currency trading and the Australian dollar. The price of the Australian dollar continued to rise against the background of the weak US dollar and rising prices for iron ore and other metals. Today in China is the day off and trading activity was reduced. As a result, within the growth quotations reached the psychologically important level of 0.80, but for the continued growth, we need new incentives. Tomorrow, the dynamics will depend on the statistics on the manufacturing PMI in China and Australia, which have recently was declining and this trend is likely to continue.
Currency trade and the New Zealand dollar. The price of the New Zealand dollar fell sharply after the statement of the Reserve Bank of New Zealand, which left interest rates at 3.5%, but said about readiness to lower interest rates in case of a fall in inflation below the target level of 1-3%, and the weakening of demand in the country. The negative also became a forecast of decrease in income of farmers. We recall that dairy products are the main export items of the country. We expect saving of the current negative dynamics of prices in the near future.