United States of America

USD weakens against EUR, JPY, and GBP.

The June number of open vacancies was 8.184M, exceeding the forecasts of 8.020M and 8.230M earlier, and the consumer confidence index rose from 97.8 points to 100.3 points compared to the calculations of 99.7 points. According to Automatic Data Processing (ADP), employment changed by 122.0K, although experts expected 147.0K. The statistics reflect the stability of the national economy against the crisis and the possibility of a smooth exit from it. At 20:00 (GMT 2), the results of the US Fed monetary policy meeting are due. Analysts are confident that the officials will keep the interest rate in the range of 5.25–5.50% for the eighth time. However, at the subsequent press conference, the head of the regulator Jerome Powell may give a signal that the cost of borrowing will be reduced in September. Before that, the economists will wait for new evidence of a stable reduction in the dynamics of consumer price growth. Markets assume a two-fold adjustment of the indicator, in September and December, and some experts – a three-fold one.

Eurozone

EUR is strengthening against GBP and USD but weakening against JPY.

The Eurozone consumer price index fell from 0.2% to 0.0% MoM and it rose from 2.5% to 2.6% MoM, while the core indicator fell from 0.4% to –0.2% MoM and remained at 2.9% instead of the expected 2.8% YoY. Against this background, officials from the European Central Bank (ECB) may postpone the second interest rate cut from September to October or limit themselves to one adjustment of the indicator before the end of this year, although earlier representatives of the regulator have repeatedly hinted that they will continue to reduce the cost of borrowing in the fall.

United Kingdom

GBP is weakening against EUR and JPY but is strengthening against USD.

Tomorrow at 13:00 (GMT 2), investors are awaiting the results of the Bank of England meeting. Inflation in the country is at the target level of 2.0% and may fall below it but business activity is accelerating, maintaining the risks of price growth, and in these conditions, officials can either agree to the first reduction in the cost of borrowing this year or refrain from it. Judging by the latest statements of the regulator’s board members, there is no unity of opinion within it on further steps: some economists, including Swati Dhingra, advocate the beginning of easing monetary policy, while others, such as Catherine Mann and Hugh Pill, are not yet ready for this. Finance Minister Rachel Reeves said the government would have to raise taxes to reduce the budget deficit, which will amount to 22.0B pounds this year.

Japan

JPY is strengthening against EUR, GBP, and USD.

Positive dynamics are developing against the unexpected decision of the Bank of Japan to lower the interest rate from 0.10% to 0.25%, while most experts assumed that this would happen no earlier than autumn. The measures are justified by continuing wage growth, which has seen companies pass on costs to consumers and has pushed borrowing costs to their highest since 2008. However, the central bank said financial conditions remain easy enough to provide further support for economic activity, and set a core inflation forecast of 2.5% by the end of the current fiscal year and 2.0% in 2025 and 2026. Officials said they could tighten monetary policy further if inflation rises, with experts expecting at least one more increase in borrowing costs this year. The central bank also said it would cut its monthly outright purchases of government bonds to 3.0T JPY a month from 6.0T JPY in the first quarter of 2026.

Australia

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

The Q2 consumer price index was flat at 1.0% QoQ and rose to 3.8% YoY from 3.6%, in line with expectations. However, the weighted average fell to 3.8% YoY from 4.0% and the trimmed average to 3.9% from 4.0%, leaving investors hoping that the Reserve Bank of Australia (RBA) will not have enough evidence to tighten the monetary policy at its August meeting. June preliminary retail sales figures rose 0.5%, well above expectations of 0.2%.

Oil

The positive price dynamics are developing after the news of the assassination in Tehran of the political leader of the Palestinian movement Hamas Ismail Haniyeh: the Iranian authorities blame Israel for this, as a result of which the geopolitical situation in the Middle East may become tougher, increasing the risks of interruptions in fuel supplies from the region.

In addition, another weekly reduction in the US oil reserves provides support to prices. According to the report of the American Petroleum Institute (API), it amounted to 4.495M barrels. The increase in the asset is hampered by poor July data on business activity in China. Manufacturing PMI grew from 49.5 points to 49.4 points, and the service PMI from 50.5 points to 50.2 points. The signs of a slowdown in the Chinese economy may negatively affect the demand for energy resources. Today, investors will pay attention to similar data from the Energy Information Administration of the US Department of Energy (EIA), which may confirm a reduction of 1.600M barrels, supporting the quotes.