31.12.2015 - We expect a stronger dollar in January
Currency trading and the euro. The price of euro continued to consolidate against the US dollar due to low trading volumes amid the holiday period. Today, in many countries of Europe is a day off and activity will be lower. On the dynamics of trade can influence data on the number of initial unemployment claims in the US (13:30 GMT) and the Chicago manufacturing PMI (14:45 GMT). Tomorrow, the markets will be closed for the New Year celebrations. After the holidays, the focus will be on the statistics on the US labor market and investors' expectations regarding further Fed raising interest rates, which will continue to put pressure on the euro. We maintain a medium-term negative outlook for the euro.
Currency trading and the British pound. The price of the British pound has stabilized after the recent decline. Investors are not building up new positions before the long weekend, but after the end of holidays the decline of the pound may continue due to the low probability of rising interest rates of the Bank of England in the first half of this year, the weakening of the growth rate of the economy and speculation regarding the expected UKâs exit from the Eurozone. Our medium-term outlook remains negative.
Currency trading and the Japanese yen. The price of the Japanese yen is consolidated and the amplitude of price fluctuations is gradually reduced, indicating that the probability of strong price movement after the consolidation. Today and tomorrow in Japan is a day off and we do not expect strong price movement. Our medium-term outlook for the yen remains negative due to the divergence of monetary policy of the Fed and the Bank of Japan.
Currency trading and the Australian dollar. The price of the Australian dollar continues to consolidate after recent gains. The potential for further price increase is limited and we believe the Australian currency to be overvalued and expect the signal to open short positions. Today and tomorrow in Australia is a day off and we expect increased activity next week. The focus will be on the data from China and the prices of commodities. Our medium-term outlook is negative.
Currency trading and the New Zealand dollar. The price of the New Zealand Dollar declines after strong growth in previous weeks. It is worth noting that the price came close to important resistance levels and to overcome them will be required strong incentives. We maintain a medium-term negative outlook, and recommend accumulating short positions on the New Zealand dollar.