European session review: the dollar rose significantly against the majors

The following data was published:

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

8:30 UK index of business activity in the construction sector, m / m in September 49.2 49 52.3

9:00 Eurozone Producer Price Index m / m in August of 0.3% -0.1% -0.2%

9:00 Eurozone Producer Price Index y / y in August -2.6% -2.1% -2.1%

The euro depreciated strongly against the US dollar, updating Sept 30 low on high demand for the US currency. However, some influenced had the statement by the representative of the ECB Peter Praet, as well as statistical data for the euro area. During his speech, Pret noted that long-term drop in the shares of banks may begin to contain the euro zone lending to companies and individuals. In general, his statements underscore the concern of the Central Bank measures on the banking system. "It is important to continue to monitor the impact of the ECB's policy on the state and prospects of the banking system", - said Praet. - Does the ECB policy instruments correction should be aimed at supporting the economy as a whole, but not to deprive the banks incentives to lend. However, I expect that very low interest rates will persist for a long time. "

With regard to the data reported by Eurostat in August, producer prices in the euro area decreased by 0.2%. Analysts had expected a decline of 0.1%. Among the 28 EU countries was also recorded a drop of 0.2%. In July, prices rose by 0.3% in the euro area and the EU. In annual terms, the producer price index fell by 2.1% in the euro area and by 1.6% in the EU. Changes were in line with expectations. In addition, the rate of decline in prices in the euro area slowed down compared to July, when the recession was seen at 2.8%. The largest price decline compared with July was noted in the Netherlands (-1.9%), Croatia (-1.4%), Ireland (-1.1%) and Hungary (-1.0%). Prices rose in Latvia (+ 0.9%), Sweden (+ 0.4%), and Cyprus (+ 0.2%).

The British pound dropped significantly against the US dollar, updating the 31-years low, move caused by increasing concerns about Brexit, as well as large-scale strengthening of the American currency. Experts point out that investors continue selling the pound after the statements of UK's PM. Recall, May reported that the authorities intend to triger Article 50 of the agreement with the EU before the end of March 2017.

Little support for the pound had statistics for the construction sector in Britain. The index of business activity in the construction sector rose to 52.3 points from 49.2 points in August. Experts predicted that the rate will drop to 49.0 points. The index rose above 50 points for the first time in four months. Nevertheless, the growth rates were lower than the average for the entire research history (54.6 points). "A number of respondents noted that Brexit uncertainty declined among customers, although these concerns were a factor in the continuing decline in commercial construction work", - said Tim Moore, senior economist at IHS Markit.

EUR / USD: during the European session, the pair fell to $ 1.1148

GBP / USD: during the European session, the pair fell to $ 1.2732

USD / JPY: during the European session, the pair rose to Y102.59