30.12.2014 - The Greek crisis has increased the volatility
The price of the euro yesterday updated the minimum of this year and continued to decline on news of new parliamentary elections in Greece, which may take place on January 25 after parliament could not elect the president. This situation can give power to opponents of European integration and worsen the debt crisis in the country. Today, the course of trading will be affected by the data on retail PMI in the Eurozone (9:10 GMT) and the index of consumer confidence in the US (15:00 GMT). Trading volumes will remain low due to the holiday period. Our medium-term negative outlook remains unchanged with the target of the euro fall to 1.20.
The price of the British pound fell sharply yesterday on news from Greece, where a political crisis which has led to the postponement of the revision of the restructuring of the loan for 240 billion euros. This issue will be considered after the formation of the new government. Given the holidays, market activity remains low. The course of trading today will be affected by the news from the US and the euro price movement. We recommend to wait for a signal to open positions and expect price correction in the near future.
The price of the Japanese yen against the US dollar fell yesterday due to the news on the approval of a new program to stimulate consumption and small and medium-sized businesses in the country by 3.5 trillion yen. Despite this, the demand for the yen as a defensive asset rose on news from Greece, where the political crisis worsens the situation to the restructuring of loans to the country. Tomorrow in Japan is the day off and according to our estimates the price will continue to move around the current levels in the near future. We maintain our medium-term negative outlook on the yen and expect further decline after the holidays.
The price of the Australian dollar remained near the levels of the previous day. Rising raw material costs significantly supported investors, but in general the Australian currency continues to be under the pressure of the weakness of the labor market, reducing investment in the mining industry and low prices for iron ore and other export commodities. Tomorrow in Australia is a holiday. We maintain our medium-term negative outlook with the closest target of 0.80 and recommend holding short positions.
The price of the New Zealand Dollar corrected today after yesterday's growth which was caused by an increase in prices for agricultural products, as a consequence of flooding in Malaysia, which is one of the largest producers of palm oil. The fall of the New Zealand currency recently stopped on the background of positive data on GDP growth, but the trade deficit and low prices for dairy products, which is a key export commodity of the country. Our medium-term outlook remains negative.