EUR/USD

The EUR/USD pair shows ambiguous trading dynamics, holding near 1.0800. The day before, the single currency managed to grow slightly, which was the market reaction to the publication of inflation statistics and the results of the US Federal Reserve meeting. As expected, the American regulator kept the interest rate at 5.50%, but investors paid attention to updated forecasts for its dynamics in the near future, according to which, at the end of 2024, the cost of borrowing will drop to 5.13%, whereas previously it was believed that it will reach 4.60%. At the end of next year, the figure is expected to decline to 4.13%, higher than the 3.90% previously expected. Interest rate futures currently point to a slightly larger cut of 46 basis points for the rest of the year. Meanwhile, the Consumer Price Index in May adjusted from 3.4% to 3.3% in annual terms and from 0.3% to 0.0% in monthly terms, and the Core CPI — from 3.6% to 3.4%, lower than estimates of 3.5%. The day before, investors paid attention to inflation statistics in Germany, which did not change compared to previous estimates, so the market reaction turned out to be very restrained. However, the Harmonized CPI added 2.8% in annual terms and 0.2% in monthly terms.

GBP/USD

The GBP/USD pair is trading with a noticeable decline, correcting after active growth the day before, which resulted in the update of local highs on March 11. The reason for the appearance of "bullish" dynamics was the results of a two-day meeting of the US Federal Reserve, as well as updated May inflation data. As expected, the regulator kept the key interest rate at 5.50%, but the Fed's Chair, Jerome Powell, admitted the possibility of reducing it by the end of 2024 if inflation continues to slow down. In May, the Consumer Price Index fell from 3.4% to 3.3% on an annual basis, and on a monthly basis it returned to 0.0% after growing by 0.3% in April. The Core CPI adjusted from 3.6% to 3.4% and from 0.3% to 0.2%, respectively. Updated forecasts for interest rates from the US Federal Reserve suggest a significantly slower reduction than in March: at the end of 2024, the regulator allows a value of 5.13%, while previously members of the Federal Open Market Committee (FOMC) expected a reduction to 4.60%. At the same time, investors still expect two full adjustments to the indicator of 25 basis points, but doubt the timing of a possible start to easing monetary policy. The pound was put under some pressure yesterday by data from the UK: the growth rate of Gross Domestic Product (GDP) fell to 0.0% in April after increasing by 0.4% a month earlier, Industrial Production in annual terms lost 0.4% after increasing by 0.5%, while analysts expected 0.3%, and the monthly figure decreased by 0.9% after growing by 0.2% in the previous month.

AUD/USD

The AUD/USD pair is declining, noticeably correcting after a sharp rise the day before, as a result of which the instrument managed to update the local highs of May 20. The implementation of downward dynamics is not hampered by strong May data on the Australian labor market. The Employment Change added 39.7 thousand after rising by 37.4 thousand in the previous month, while analysts expected 30.0 thousand. At the same time, Full-Time Employment increased by 41.7 thousand after –7.6 thousand, and Part-Time Employment decreased by 2.1 thousand after an increase of 45.0 thousand in April. The Unemployment Rate adjusted from 4.1% to 4.0%. At the same time, strong data on the labor market only increase the likelihood of further easing of monetary conditions from the Reserve Bank of Australia (RBA). In turn, the American currency is gradually regaining its previous positions after Wednesday’s trading session: the US Federal Reserve, having completed a two-day meeting, kept the key interest rate unchanged at 5.50%, indicating the continued possibility of reducing it in 2024. Updated forecasts from regulator officials suggest about one and a half full cuts of 25 basis points by the end of the year, but markets are taking a more optimistic picture and counting on two adjustments to borrowing costs by the same amount. US inflation data pointed to further easing of risks, increasing analysts' confidence that the first interest rate cut could come in September. Core CPI excluding Food and Energy slowed down in May from 3.6% to 3.4% on an annual basis and from 0.3% to 0.2% on a monthly basis.

USD/JPY

The USD/JPY pair is showing moderate growth, recovering from a faltering attempt to decline the day before. The instrument is testing 157.15 for a breakout, almost completely restoring positions after the "bearish" correction. The American currency fell sharply after the publication of May inflation data, as well as the results of a two-day meeting of the US Federal Reserve. The Core Consumer Price Index excluding Food and Energy slowed down year-on-year from 3.6% to 3.4%, and on a monthly basis from 0.3% to 0.2%, strengthening expectations regarding the possible start of an interest rate reduction program in September. Meanwhile, the US Federal Reserve kept the interest rate at 5.50%, and the Chair of the regulator, Jerome Powell, once again warned markets against excessive expectations regarding the proposed easing of monetary policy. The official’s words were supported by the publication of new forecasts for the dynamics of the interest rate for the near and long term: at the end of 2024, the expected value was reduced to 5.13%, which turned out to be significantly higher than the March estimates at 4.60%. At the same time, markets are still counting on two full cuts in borrowing costs of 25 basis points to 5.00%. In turn, the Bank of Japan meeting will take place on Friday: investors do not expect changes in the vector of the regulator’s monetary policy, so the interest rate is likely to remain at 0.10%. At 06:30 (GMT 2), April Industrial Production data will hit the market: the indicator is expected to decline by another 0.1%.

XAU/USD

The XAU/USD pair shows a noticeable decline, developing a strong corrective impetus formed after updating local highs on June 7. The instrument is testing 2310.00 for a breakdown, while trading participants analyze macroeconomic statistics that entered the market the day before. On Wednesday, a two-day meeting of the US Federal Reserve ended, following which the interest rate was kept at 5.50%. In addition, updated forecasts for the dynamics of borrowing costs were published: the regulator expects a decrease in the indicator by the end of 2024 to 5.13%, which implies one and a half full reductions of 25 basis points each. At the same time, the Chair of the Fed, Jerome Powell, commenting on the decision made by representatives of the Federal Open Market Committee (FOMC), noted that he continues to rely on a stable reduction in inflation risks while maintaining high employment in the country. Overall, analysts' expectations have changed little, and the market is still counting on two interest rate adjustments before the end of 2024. The timing of the launch of the monetary easing program is still in question, but forecasts currently point to September. Trading participants also drew attention to the publication of May inflation statistics in the United States: the Core Consumer Price Index excluding Food and Energy in annual terms slowed down from 3.6% to 3.4%, and in monthly terms from 0.3% to 0.2%.