17, February 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar started the new trading week on a positive note. The US currency purchase supported the positive sentiment for the world stock exchange. Even China's return to the market after long holidays did not spoil that sentiment. The imports and exports volume from China decreased by 18.8% and 11.2%, respectively in January.

The banking sector shares outperformed the market in Europe. Investors' "risk appetite" was growing which is a negative factor for the euro as a funding currency. Germany has published the ZEW Survey - Economic Sentiment for February. The index showed 1.0 (the previous value was 10.2; the forecast was 3.2). The pair euro/dollar fell.

The UK published the inflation report for January. A strong labor market pointed out that CPI growth (in annual terms) could be a little better than the consensus forecast (0.4%). The unemployment rate for November decreased by 5.1%, while wages increased by 1.02%. However the CPI came in at the forecasted median 0,3%. By the end of the trades the pair pound/dollar sharply fell.

The Japanese negative macroeconomic statistics keeps showing correction. GDP decreased by 0.4% in the fourth quarter. The volume of industrial production has been reducing for the second year in a row and the negative trend accelerated from 1.91% to 2.49% in 2015. The sharp yen's strengthening, that we saw in the beginning of the year, carries additional risks to the Japanese economy. The pair dollar/yen is consolidating after a decrease.