16, December 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

The single European currency decline is a positive factor for the German economy as the weak euro supports the net exports growth. The ZEW index has been published. The data came out at the level of 16,1, that is better then forecasted 15,0. The German industrial volume output has fallen by 0.91%, it declined by 0.27% for the same period in 2014. The core inflation grew by 2% on an annualized basis that is a positive factor for the dollar after the Fed total monetary policy meeting results publication. The US and the German government bond yields have decreased which played into the "bears" hands. By the end of the day the pair euro/dollar decreased.

The November UK and the US inflation reports became the determining factor for the GBP/USD pair. The data in Britain came out at the forecasted level of 0,1%. The data in USA came out also at the forecasted level of 0,2%. Today FED will make its verdict on the monetary policy. We expect a high volatility. We noticed that both economies show the similar tendency: the population employment and incomes growth contributes to the private consumption that happening against the petroleum products price lowering. The oil market sales caused the UK government bond yields decline which in turn is a negative factor for the British currency as it reduces the investments’ attractiveness into the British assets.

The USD/JPY bulls tried to develop an upward correction in the US stock market; still their efforts have not brought the desired dividends. The NASDAQ and the Russell 2000 were the decline leaders which signaled about the lack of investors’ appetite to take risks. However the pair dollar/yen sharply increased after a decrease.