United States of America

USD is ambiguous against EUR and GBP but is weakening against the JPY.

A preliminary update on Q2 US gross domestic product (GDP) may increase from 1.4% to 1.9% on Thursday, while the Fed’s key core personal consumption expenditure price index may change to 0.1% MoM and 2.6% YoY in June. The core figure may change to 0.2% MoM and 2.6% YoY. If inflation continues to slow, policymakers could begin cutting interest rates by 25 basis points at their September meeting. On the other hand, several experts see long-term problems for financial authorities if Republican presidential candidate Donald Trump returns to the White House. The new administration promises to cut taxes, increasing the likelihood of price growth, so economists should stabilize the borrowing costs or start raising them.

Eurozone

EUR is weakening against GBP and JPY but has ambiguous dynamics against USD.

Officials at the European Central Bank (ECB) are sending signals to investors about the possibility of further monetary policy easing. The head of the Bank of France, Francois de Galhau, said that the market’s expectations regarding the dynamics of interest rate reduction are reasonable. Now, most experts expect two monetary policy easings before the end of the year, in September and December. In addition, the Chairman of the Board of the Bank of Lithuania, Gediminas Simkus, expressed confidence that the cost of borrowing will continue to decline at a significant pace. According to a survey of leading economists conducted by the European regulator, most analysts expect inflation in the region to be 2.4% this year, slowing to 2.0% in 2025 and falling below the target level to 1.9% in 2026.

United Kingdom

GBP is strengthening against EUR, weakening against JPY, and has ambiguous dynamics against USD.

Over the weekend, the new UK government announced an upcoming review of the national pension system to find ways to redirect some of the funds’ investments into productive assets, stimulating economic growth and increasing pensioners’ incomes. On Wednesday, preliminary data on business activity is due. The July manufacturing PMI may adjust from 50.9 points to 51.1 points, and the services PMI from 52.1 points to 52.5 points, reducing the likelihood of an imminent interest rate cut by the Bank of England and supporting the national currency.

Japan

JPY is strengthening against EUR, GBP, and USD.

Investors will be watching preliminary business activity data on Wednesday, with the June manufacturing PMI expected to rise from 50.0 points to 50.5 points and the services PMI from 49.4 points to 49.9 points. The positive dynamics will support the recovery of the national economy. So, the Bank of Japan officials may further tighten monetary policy. However, most experts believe it’s better not to expect the next interest rate adjustment until October.

Australia

AUD is weakening against EUR, GBP, JPY, and USD.

Investors will be watching preliminary business activity data on Wednesday, with the June manufacturing PMI expected to fall from 47.2 points to 47.0 points and the services PMI from 51.7 points to 50.4 points. Amid high non-manufacturing inflation, the chances that the Reserve Bank of Australia (RBA) will move to adjust interest rates this year may decrease.

Oil

Oil prices resumed their decline.

Investors expect a truce between Israel and the Palestinian movement Hamas to be concluded soon, which will help reduce the risk premium included in oil prices. Thus, on Friday, US Secretary of State Antony Blinken said that due to the agreement, which might be announced soon, the Israeli hostages would return home, and the situation in the region would stabilize. Concerns about the Chinese economic stability puts additional pressure on the quotes. Last week, officials acknowledged that achieving the government’s goals might be difficult. In the first half of this year, fuel oil imports fell by 11.0% to 11.95M tons, confirming a decrease in oil demand in the second world economy.