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07.11.2018 04:49 PM
While the dollar was waiting for results, what did the main currencies feel?

The euro could not find support in stronger macroeconomic statistics for the euro area. According to economists, the volume of production orders in Germany should have been reduced by 0.5%, but instead it rose by 0.3%. Also, the Euroblock business activity index was revised upwards due to increased activity in the German services sector. In addition, producer prices in the region rose by 0.5%, reaching an annual growth rate of 4.5%, the highest level since February last year. This news foreshadows the release of a strong indicator of industrial production in the eurozone, but the rise can be offset by a reduction in retail sales growth.

The day for the pound sterling ended in the "green" zone. No data was released on Britain the day before, and despite warning the Democratic Unionist Party about the prospects for a hard exit from the European Union (EU), investors are still hoping. Everyone focused on the approving gesture of Minister D. Raab, which he showed after the cabinet meeting as a sign that everything is going well. Time is ticking, but it is too early to draw conclusions, although no one doubts that the pound is driven by investors' hopes.

The Australian dollar (AUD) rose against the backdrop of the optimism of the Reserve Bank of Australia (RBA). After the interest rates were left unchanged, the Central Bank raised its forecasts for GDP growth for this and next years, saying that in 2020, the unemployment rate will fall to 4.75%. Officials also said that they expect price pressure to rise in the next few years. These comments turned out to be quite enough for the "bulls" of AUD, who have been buying currency for the last 4 days.

Resistance approaches 0.7300, and if it is broken, the next stop will be 0.74. Unlike AUD, Canadian currency is traded in the red, despite the increase in the number of building permits issued. Declining oil prices and a strong dollar are the main factors that make the Canadian dollar cheaper.

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During the upcoming trading day, all attention will be focused on the New Zealand dollar. The latest data on the labor market turned out to be very strong. Employment rose by 1.1% in the third quarter, while the unemployment rate sank from 4.4% to a minimum of 10 years, 3.9%.

Amid the strengthening of the country's economy, it is expected that the Reserve Bank of New Zealand (RBNZ) will reiterate its positive expectations of further development. Employment, credit card spending, activity in the services sector, and inflation are on the rise. The cost of dairy products continues to decline, while the rest of the economy is growing. During the last meeting, the regulator announced early signs of growth in core inflation and expectations of its continuation in 2019. Then the NZD / USD pair was sold out, as the risks of reduction and the need to maintain a stimulating monetary policy for a long time became noticeable. Experts do not expect significant changes in the statement of monetary policy, but optimism is supported by recent data, reducing the likelihood of its mitigation. Like the AUD, the NZD is heavily oversold, and any positive statements from the Central Bank of New Zealand can help the currency to pass the resistance level of 0.68.

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Svetlana Doronina,
Analytical expert of InstaTrade
© 2007-2025

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