As we have assumed in Friday’s review, there was a consolidation for the euro and the British pound. However, there was pressure not to the downside, as we have expected, but to the upside. Meanwhile, stock market grew (S&P500 +0.42%) amid negative US macroeconomic data. Empire State Manufacturing Index in November was -2.2 vs. expectations for a 5.2 growth. Industrial production in October dropped 0.1% vs. forecast for a 0.1% growth and 0.7% rise in September (revised from 0.6%). The major investment idea which the major investors were directed by was the assumption that in December the Fed would not reduce bond-buying program with the clear statement made by Janet Yellen regarding this issue. At the moment we observe buying of the market against economic indicators, which is a rather obvious sign of the expected market drop.
Today at 15:00 UTC+4 data on Current Account in the Eurozone in September is published; forecast 18.3 billion euros vs. 17.4 billion euros in August. At 16:00 UTC+4 data on Trade Balance in the Eurozone is revealed. At 19:00 NAHB Housing Market Index in November is published, forecast 56 vs. 55 in the previous month.
Thus, the rate of the euro took the direct correlation to the US stock market, i.e. the single currency is the risky instrument. We expect the rise of the market to 1.3560 and dynamic decline in the nearest future.
Data on the British pound will be revealed on Wednesday, when the Bank of England meeting Minutes will be published. Then we expect the local growth of the British pound. Target range is 1.6140/50.
AUD/USD.
On Friday the Australian dollar added 55 points. The main driving force was weakening of the US dollar. However, unlike the euro and the pound, the growth of the Aussie was restrained by consolidation of the euro and the drop of the index on industrial non-ferrous metals, which lost 1.7% for a week. Meanwhile, data on new car sales fell 0.7% vs. decline for 0.3% in the previous month.
This week relevant macroeconomic data on Australia is not revealed. On Thursday RBA Governor Glenn Stevens speaks. The expectations on the important indicators in the US is approximately the same as in the previous months. The major outlook of the oil traders for the next week is bullish amid the main idea that the Fed on the December’s meeting will not reduce the bond-buying programme.
We expect the rise of the price to the levels 0.9420, 0.9460, and 0.9510.
