United States of America

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

Investors are still focusing on the July labor market data. A sharp increase in unemployment has alarmed analysts. However, now most observers believe a recession in the national economy will not occur despite the key industry cooling. Moreover, experts expect a more significant adjustment of the US Fed monetary policy, which will support the dynamics of the gross domestic product (GDP). Thus, experts from JPMorgan Chase & Co. expect three reductions in the cost of borrowing during the year: in September and November – by 50 basis points, and in December – by another 25 basis points but a more cautious approach is also possible.

Eurozone

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

German exports fell by –3.4%, above the forecast of –1.5%, while imports fell by 0.3% instead of the expected 2.8%, pushing the trade surplus down to 20.45B euros. On the other hand, industrial production increased by 1.4% in June, compared to the preliminary estimate of 1.0%. Overall, Germany’s industry and trade remain under severe pressure, leading experts to fear a further slowdown in the country’s economy. Meanwhile, Bank of Finland Governor Olli Rehn said the European Central Bank (ECB) could continue to cut interest rates if confidence in a slowdown in inflation soon strengthens.

United Kingdom

GBP is strengthening against EUR, JPY, and USD.

Today, the Halifax house price data for July was released. The index increased from 0.0% to 0.8% MoM and from 1.9% to 2.3% YoY. Overall, the sector is experiencing its strongest growth in six months, indicating serious momentum for its expansion. Experts note that the rise in property prices is due to a supply shortage and the Bank of England’s first interest rate cut, which reduces pressure on mortgage borrowers. The agency’s analysts expect the trend toward moderate price increases to continue until the end of this year. Recall that last week, mortgage lender Nationwide also reported a 2.1% YoY correction in the indicator, the highest since December 2022.

Japan

JPY is weakening against USD, EUR, and GBP.

The currency is under pressure due to the latest comments by Bank of Japan Deputy Governor Shinichi Uchida. Today, he said that the regulator will probably not raise interest rates any further until markets stabilize. He noted that the sharp volatility currently observed in domestic and overseas financial markets creates the need to maintain the current level of borrowing costs for a long time. The official added that, unlike central banks in the United States and the Eurozone, the Bank of Japan does not need to rush to adjust monetary policy since it does not risk being “at the tail end of events.”

Australia

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

Investors are assessing the comments of leading Australian officials. The Reserve Bank of Australia (RBA) chief economist Sarah Hunter believes that the country’s economy is overheated, and Treasurer Jim Chalmers noted that the government does not expect a recession to develop soon, but the global economic situation is currently unstable, so it is important to make balanced budget decisions.

Oil

The quotes are rising amid fears of a new escalation of the conflict in the Middle East, which could damage the production and oil supply.

Experts expect a direct clash between Israel and Iran, and the question is only how serious it will be. US Secretary of State Antony Blinken expressed hope that the situation will not escalate significantly but these statements have not yet convinced investors. In addition, prices are supported by the weekly report on raw material reserves from the American Petroleum Institute (API), which reflected an increase of 0.180M barrels instead of the forecast of 0.850K. According to preliminary estimates, today’s publication from the Energy Information Administration of the US Department of Energy (EIA) will record a decrease of 1.600M barrels, supporting oil quotes.