30.06.2016 - Volatility on the market will remain high

Currency trading and the euro. The price of euro continues to gradually recover ground against the US dollar, but continues to be under pressure from the negative impact of the results of the referendum on the UK's membership in the EU, which will lead to lower growth in the euro area. It should be noted that the data on the US personal income and spending which increased by 0.2% and 0.4% vs. expected 0.3% and 0.4%, respectively, failed to support the US dollar. Today, the dynamics of trading will affect news on retail sales in Germany (06:00 GMT), the consumer price index in the euro area (09:00 GMT), and the publication of the minutes of the previous meeting of the European Central Bank (11:30 GMT). Our medium-term outlook for the euro remains negative.

Currency trading and the British pound. The price of the British pound was unable to continue to grow and shows a slight drop at the moment. The pressure on the price of the pound will have negative expectations about the impact of the UK exit from the EU. London is likely to lose the name of the largest financial center in Europe. The possibility of a second referendum is low. Today, it is worth paying attention to data on business investment, balance of payments and UK’s GDP for the 1st quarter (8:30 GMT). Our medium-term outlook remains negative.

Currency trading and the Japanese yen. The price of the Japanese yen is slightly higher against the US dollar, despite the publication of the preliminary statistics on the volume of industrial production in Japan, which fell by 2.3% in May. The demand for defensive assets will remain high in the near future that will support the Japanese currency, but its growth potential is limited due to the likely intervention by the Bank of Japan in case of continued growth. Tomorrow we should pay attention to the statistics on the unemployment rate and consumer price index in Japan. Our medium-term outlook remains negative.

Currency trading and the Australian dollar. The price of the Australian dollar rose against the background of higher commodity prices. This trend may continue in the near future, but the growth potential is low. Tomorrow will be published the data on the index of business activity in the manufacturing sector in Australia. We expect increased price volatility in the near future and expect a decline of the Australian dollar in the medium term.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar after the recent upward correction, resumed its decline and is likely to continue it in the near future. It is worth noting that the growth of the index of business confidence in New Zealand to 20.2 in April from 11.3 in March, could not affect the mood of the market. Possible easing of monetary policy in the country against the background of lower prices for dairy products and the weak growth of inflation puts pressure on the price of the New Zealand dollar. Our medium-term outlook remains negative.

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