04, February 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The United States published the US PMI Composite from IMS for January at the level of 53.5 (the previous value was 55.3, the forecast was 55.1). In addition the USA released the ADP Employment Change for January at the level of 205K (the previous value was 267K; the forecast was 195K).

The Eurozone unemployment rate decreased by 0.8% to the level of 10.4% in 2015. That figure is a clear reflection of the ECB soft monetary policy. The low euro rate and the cheap liquidity contribute to the real economy development. The Euro area Retail Sales showed 1,4% y/y and 0,3% m/m against the forecasted 1,5% y/y and 0,3% m/m. By the end of the trades the pair euro/dollar showed a strong growth.

The UK GDP grew by 2.17% in 2015, compared with the growth of 2.85% in 2014. The same United States growth rate was 2.38% and 2.42% respectively for the same period. As we can see, the UK economic slowdown is stronger than in the USA which has traditionally been a negative factor for the currency. The pair pound/dollar increased.

The dollar showed a rather volatile dynamics. The currency weakened against the yen which is in demand amid a new wave of risk aversion. The oil prices falling caused stock indices decrease which significantly losing ground this week after the spectacular recent growth. In the light of this, buyers showed interest to the Japanese yen.

Non-Manufacturing PMI has been published. The EU index showed 53.6 that coincided with the forecast. The same index showed 53.2 in the USA, the forecast was 53.7. The UK Non-Manufacturing PMI came in at 55.6 versus the forecast of 55.3.