EUR/USD

The EUR/USD pair shows a slight increase, consolidating near 1.0820. The instrument retreated from the local highs of June 12, updated at the beginning of this week. Trading participants prefer to wait for new movement drivers to appear before opening new transactions. In particular, tomorrow at 14:30 (GMT 2), June inflation data will be published in the US: forecasts suggest a slowdown in the Consumer Price Index from 3.3% to 3.1% in annual terms and an acceleration from 0.0% to 0.1% on a monthly basis, while the Core CPI is expected to remain unchanged at 3.4% and 0.2%, respectively. Similar statistics in Germany could reflect the Harmonized Consumer Price Index remaining unchanged at 0.2% on a monthly basis and 2.5% on an annual basis. Today at 16:00 (GMT 2), investors will once again focus on the speech of US Federal Reserve Chairman Jerome Powell, this time in the House of Representatives. The day before, the official gave a speech in the Senate, after which analysts increased the likelihood of a reduction in borrowing costs by the end of this year. In his speech, the chairman of the regulator noted that the national economy is gradually cooling down, and the labor market is returning to the levels seen before the COVID-19 pandemic. The official refused to focus only on statistics on consumer inflation when choosing the vector of further monetary policy; however, there is no intention to rush to reduce the cost of borrowing. Overall, Powell expects additional drivers to emerge over the next few months that will support a transition to looser monetary policy.

GBP/USD

The GBP/USD pair is trading with upward dynamics, recovering after an active decline attempt the day before. The instrument is testing 1.2800 for a breakout, while trading participants expect the emergence of new movement drivers. During the day in the UK there will be several speeches by representatives of the Bank of England, including Huw Pill and Catherine Mann. It is expected that officials will comment on the further prospects for the regulator's monetary policy in connection with the growing risks of monetary easing in the US and a change of government in the UK. According to the results of the last parliamentary elections, Labor, who advocate reducing additional government spending, won for the first time in 14 years. American investors are focusing on the speeches of US Federal Reserve Chairman Jerome Powell in the US Congress: yesterday, the official spoke in the Senate, and today his speech is expected in the House of Representatives. The regulator's chairman's rhetoric was quite soft, and he refused to focus only on consumer inflation indicators when choosing the vector of monetary policy, increasing the likelihood of an interest rate reduction in September. In addition, Powell noted that the country's economy is no longer overheated, which is confirmed by the June labor market report. Tomorrow, the US will present June inflation data, and at 08:00 (GMT 2) the UK will present statistics on Gross Domestic Product (GDP) and Industrial Production. Forecasts suggest that the US Consumer Price Index will slow down from 3.3% to 3.1% on an annual basis and rise from 0.0% to 0.1% on a monthly basis, while the Core CPI is likely to be fixed at 0.2% MoM and 3.4% YoY. In turn, the British economy is expected to grow by 0.2% in May after flat growth a month earlier, while Industrial Production is likely to add 0.6% after –0.4% in annual terms and 0.2% after –0.9% in monthly terms.

NZD/USD

The NZD/USD pair is showing a confident decline, developing the corrective impetus formed at the beginning of the week and updating new local lows. The instrument is testing 0.6090 for a breakdown after the meeting of the Reserve Bank of New Zealand (RBNZ), at which, as expected, the interest rate was kept unchanged at 5.50%, again indicating inflation risks currently existing in the economy. According to the regulator, maintaining a restrictive monetary policy will help the Consumer Price Index achieve the target 1.0–3.0% already this year. At the same time, the national economy continues to slow down, contracting in four of the last five quarters, putting pressure on the RBNZ to ease monetary policy. One way or another, the RBNZ's official forecasts do not imply new reductions in borrowing costs until the end of this year, but much will depend on incoming macroeconomic statistics. Market expectations are somewhat more optimistic and suggest a possible reduction in the interest rate either during the August meeting of the regulator, or already in the fall, especially if the US Federal Reserve also decides to move on to easing monetary parameters by this time. Inflation data from China put some pressure on the instrument today: in June, the Consumer Price Index in annual terms slowed down from 0.3% to 0.2%, contrary to forecasts of 0.4%, and in monthly terms the rate of decline in the indicator accelerated from –0.1% to –0.2%, while the Producer Price Index rose from –1.4% to –0.8%.

USD/JPY

The USD/JPY pair resumed its growth, returning to its previous record highs. The instrument is testing 161.45, while trading participants analyze incoming macroeconomic statistics. In particular, the Business Optimism index from the National Federation of Independent Business (NFIB) rose from 90.5 points to 91.5 points in June, while analysts expected 89.5 points. In addition, investors are assessing yesterday's speech by US Federal Reserve Chairman Jerome Powell in the US Senate. In his speech, the chairman of the regulator noted that the national economy is gradually cooling down, and the labor market is returning to the levels seen before the COVID-19 pandemic. The official refused to focus only on statistics on consumer inflation when choosing the vector of further monetary policy; however, there is no intention to rush to reduce the cost of borrowing. Markets, however, have bolstered confidence that the first interest rate adjustment could come at the September meeting, with a maximum of two 25 basis point cuts expected in 2024. Today, the Chair of the US Federal Reserve will speak in the House of Representatives, but the reaction of investors may be more restrained. Tomorrow at 14:30 (GMT 2) June inflation data will be published in the US: forecasts suggest that the Consumer Price Index in annual terms will slow down from 3.3% to 3.1%, and in monthly terms it will increase from 0.0% to 0.1%, while the Core CPI is likely to be fixed around 0.2% MoM and at 3.4% YoY, which may increase pressure on the regulator. Statistics from Japan released today did not have a noticeable impact on the dynamics of the instrument: the Producer Price Index in June slowed down from 0.7% to 0.2%, which turned out to be lower than expectations of 0.4%, and the Domestic Price Index for corporate goods, on the contrary, accelerated from 2.6% to 2.9%, which coincided with analysts’ forecasts.

XAU/USD

The XAU/USD pair shows slight growth, developing a weak corrective impetus formed the day before. The instrument is testing 2370.00 for a breakout, while trading participants assess the prospects for a reduction in the cost of borrowing by the US Federal Reserve until the end of 2024. The day before, the Chair of the US Federal Reserve, Jerome Powell, made a speech in the US Senate, noting that the national labor market is showing signs of significant cooling, judging by the June report, which appeared at the end of last week and turned out to be significantly worse than analysts’ expectations. The revision of the Nonfarm Payrolls in May from the previous 272.0 thousand to 218.0 thousand had a particularly strong impact on the situation. In turn, the Unemployment Rate in June increased from 4.0% to 4.1%. Today, the Chair of the regulator will speak in the House of Representatives, but this is unlikely to bring anything new to the market. Tomorrow at 14:30 (GMT 2) June inflation data will be published in the US: forecasts suggest that the Consumer Price Index in annual terms will slow down from 3.3% to 3.1%, and in monthly terms it will increase from 0.0% to 0.1%, while the Core CPI is likely to be fixed around 0.2% MoM and at 3.4% YoY.