03, February 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

Risk aversion has weakened the US currency position. The global economy depressing picture became the reason for the growing pessimism. Initially, the risk aversion was triggered by the China report where the manufacturing sector PMI fell from 49.7 to 49.4 while analysts expected a more modest drop to 49.6.

The Eurozone December Unemployment Rate showed 10.4%, the forecast was 10.5%. By the end of the trades the pair EUR/USD decreased.

The UK has published the Construction PMI index for January. The index came in at 55.0. The Bank of England revealed the mortgage market statistics: the Mortgage Approvals for December grew by 0.59% to 70.84 thousand, while the Net Lending to Individuals was 3.2 billion pounds for December. Investors expected the PMI reduction compared to the previous month. The forecasted median was 57,5 against the previous 57,8. In fact the index came in at the level of 55,0. The trades on the pair GBP/USD closed with a growth.

The 10-year Japanese government bonds yield continued their falling which is a strong bearish factor for the yen. After the Bank of Japan decision to introduce the negative interest rates the US and Japanese securities differential yields have been expanding which increases the investment attractiveness in US assets. However the pair USD/JPY fell on the yesterday’s trades.