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09.09.2016 12:21

European session review: Euro weakened against the US currency

The following data was published:

(Time / country / index / period / previous value / forecast)

8:45 Switzerland's unemployment rate (not seasonally adjusted) in August 3.1% 3.1% 3.2%

9:00 Germany Balance of Payments, July 26.3 18.6 bn

9:00 Germany Trade balance (excluding seasonal adjustments) 24.7 19.5 bln in July

9:45 France Industrial Production m / m in July -0.7% 0.2% -0.6%

11:30 UK Trade Balance Revised to -5.6 in July -5.1 -4.5

The pound fell against the dollar, returning to yesterday's low. Pressure on the currency has continued risk aversion caused by the drop in oil prices. At the same time, ONS reported that the UK's deficit on trade in goods and services was estimated to have been £4.5 billion in July 2016, a narrowing of £1.1 billion from June 2016. Exports increased by £0.8 billion and imports decreased by £0.3 billion.

The deficit on trade in goods was £11.8 billion in July 2016, narrowing by £1.2 billion from June 2016. This narrowing reflected an increase in exports of £0.8 billion to £24.8 billion and a decrease in imports of £0.3 billion to £36.6 billion.

Between the 3 months to April 2016 and the 3 months to July 2016, the total trade deficit for goods and services widened by £5.1 billion to £14.0 billion.

Certain influence on the currency also had the results of a survey by the Bank of England. The Central Bank reported that 21 percent of respondents expect an increase in Central Bank rates in the next 12 months compared to 41 percent in May. The last reading was the lowest since 1999. Meanwhile, 19 percent of respondents believe that the Central Bank will cut rates next year, compared with 5 percent in May. This figure is the highest since November 2008. The survey also pointed to a moderate growth of expectations for inflation next year.- rate rose to 2.2 percent from 2.0 percent in May. At the same time, expectations regarding inflation two years ahead remained at 2.2 percent. However, 5-year inflation expectations fell to 3.0 percent from 3.4 percent in May.

The euro fell against the dollar, having lost all previously earned positions today, which was associated with the publication of the weak German and French data. As it became known, the volume of German exports unexpectedly fell in July. Imports also fell, showing that Europe's largest economy began the third quarter on a weak note after Brexit.

According to the report of the Federal Bureau of Statistics, seasonally adjusted exports fell in July by 2.6 percent. It was the biggest monthly drop since August 2015. Analysts had expected exports to grow by 0.25 per cent. Meanwhile, the volume of imports (seasonally adjusted) decreased by 0.7 per cent, also confounding expert forecasts (+0.8 percent). The sudden drop in exports led to the fact that the trade surplus dropped to 19.4 billion euros from 21.4 billion euros. In June. (Revised from 21.7 billion euros). It was expected a surplus of 21.2 billion. Falling exports largely reflects factors such as more holidays on July. A breakdown of trade figures showed that demand for German goods from countries outside the EU fell the most. Exports to the so-called third countries, which include China, Russia, Japan and the United States declined by 13.8 per cent. Meanwhile, German exports to the EU countries outside the euro area, which includes the United Kingdom, decreased by 8.8 percent.

Meanwhile, the statistical office Insee said that French industrial production fell in July by 0.6 percent compared to June vs expectations for an increase of 0.3 percent. This was the third consecutive monthly decline in production. The figure for June was revised to -0.7 percent from -0.8 percent. Manufacturing output fell by 0.3 percent in July, which was slower than the fall of 1.1 percent in June. Economists had forecast an increase of 0.7 per cent. On the other hand, construction output increased by 4.8 per cent, offset by a drop of 0.4 per cent recorded in June.

EUR / USD: during the European session, the pair fell to $ 1.1259 from $ 1.1284

GBP / USD: during the European session, the pair fell to $ 1.3285, but then partially recovered

USD / JPY: during the European session, the pair rose to Y102.78

Market Focus

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