13, October 2015

Fundamental analysis

Fundamental analysis

At the beginning of the week the macroeconomic background is once again in the dollar favor. As for the investors’ escape into the euro while the Chinese data is deteriorating, it may happen only when we have shock events or when the investors escape from the carry trade market.

The pair euro/dollar has increased. The French August industrial production showed growth by 1.6% against the growth expectations by 0.6%. Investors, however, ignored the French budget deficit decline to -87.7 billion euros against -79.8 billion in July and the Italian industrial production decline by 0.5% - while it was expected 0.3%.

The pair GBP/USD remained in a flat. The UK August trade deficit was 11.1 billion pounds against -10.0 billion and the previous indicator declined to -11.1 billion from -12.2 billion pounds. The UK construction sector fell by 4.3% against the growth expectations by 1.0%.

The dollar/yen was in a flat the whole Monday. The September import price index correction (-0.1% vs. -0.5%) and the wholesale inventories increase to the predicted level of 0.1% in August slightly supported the dollar.

The week started Japanese, the USA and Canadian holidays. The political component of the day was the Fed representatives Charles Evans and Lael Brainard's speeches. Evans supports the interest rate hike this year, Brainard is not inclined to raise the rates this year.