EUR/USD

The EUR/USD pair is showing slight growth, holding close to 1.0920 and the levels of the start of trading this week. Market volatility declined significantly towards the end of the week, partly due to the macroeconomic backdrop. Market participants are analysing the likelihood of further reductions in borrowing costs by the European Central Bank (ECB) and the US Federal Reserve, and are also monitoring changes in the balance of risks in the market. Following the release of a weak labor market report late last week, investors have significantly revised their expectations and are now expecting a 50-basis-point rate cut. The day before, investors assessed US labor market statistics: Initial Jobless Claims for the week ending August 2 decreased from 250.0 thousand to 233.0 thousand, with preliminary estimates of 240.0 thousand, and Continuing Jobless Claims for the week ending July 26 increased from 1.869 million to 1.875 million, ahead of forecasts of 1.870 million. In turn, the single currency's position remains under moderate pressure from the weak macroeconomic background from the EU, which also gradually increases the likelihood of a new easing of monetary policy by the ECB. On Wednesday, market participants drew attention to the reduction in Export volumes from Germany in June by 3.4% after –3.1% in the previous month, while analysts expected –1.5%, and Imports added 0.3% after –5.5% with a forecast of 2.8%. Against this backdrop, the trade surplus fell from 25.3 billion euros to 20.4 billion euros, compared to expectations of 23.5 billion euros. Today, the focus of European investors is on July inflation statistics in Germany: as expected, the Consumer Price Index remained at 0.3% monthly and 2.3% annually, while the Harmonized CPI increased by 0.5% and 2.6%, respectively.

GBP/USD

The GBP/USD pair is showing weak growth, developing the active "bullish" impetus formed the day before, when the instrument managed to retreat from the local lows of July 2. Quotes are testing 1.2760 for a breakout, while trading participants expect the emergence of new movement drivers. The American currency remains under pressure amid the growing likelihood of monetary easing by the US Federal Reserve: analysts have raised their forecasts for the September meeting and now expect the interest rate to be cut by 50 basis points at once. Moreover, the regulator may resort to another adjustment of the value before the end of 2024. The Bank of England also decided to reduce borrowing costs by 25 basis points last week, emphasizing that the current economic situation is fully consistent with the announced easing of monetary parameters. The regulator does not rule out further adjustments to the vector of monetary policy, but calls for a sober assessment of incoming macroeconomic statistics. Earlier in the UK, July data on business activity in the services sector was published: the S&P Global PMI increased from 52.4 points to 52.5 points, and the S&P Global Composite PMI increased from 52.7 points to 52.8 points. In turn, business activity in the US services sector from S&P Global fell from 56.0 points to 55.0 points in July, while the same indicator from the Institute for Supply Management (ISM) rose from 48.8 points to 51.4 points, ahead of forecasts of 51.0 points.

AUD/USD

The AUD/USD pair is showing moderate upward momentum, preparing to close the weekly session with a noticeable increase, despite the active decline on Monday. The instrument is testing 0.6600 for a breakout, updating local highs from July 24. The dollar's position is under pressure from expectations of a likely easing of monetary policy in the US: the main scenario on the market still assumes the start of a cycle of adjustment of borrowing costs in September. Moreover, following the release of a weak labor market report late last week, investors have significantly revised their expectations and are now expecting a 50-basis-point rate cut. The July data showed a decline in Nonfarm Payrolls from 179.0 thousand to 114.0 thousand, while analysts expected 175.0 thousand, an increase in the Unemployment Rate from 4.1% to 4.3%, and a slowdown in Average Hourly Earnings from 3.8% to 3.6% year-on-year and from 0.3% to 0.2% month-on-month. In turn, the Australian dollar received some support from the results of the Reserve Bank of Australia (RBA) meeting held on Tuesday: the regulator decided to keep the interest rate at 4.35%, noting the stable nature of inflation. Officials expect consumer prices to fall to the target range of 2.0-3.0% only by the end of 2025. Finally, the instrument is supported at the end of the week by macroeconomic data from China, where the Consumer Price Index in July added 0.5% after -0.2% in the previous month, while analysts expected 0.3%, and the annual indicator accelerated from 0.2% to 0.5%.

USD/JPY

The USD/JPY pair is showing mixed trading, consolidating near 147.10. The "bullish" corrective activity of the American currency has noticeably weakened by the end of the current trading week, since no new drivers for the dollar’s growth are emerging. The data on jobless claims in the US released on Thursday failed to change the current situation on the market: Initial Jobless Claims for the week ending August 2 decreased from 250.0 thousand to 233.0 thousand, with preliminary estimates of 240.0 thousand, and Continuing Jobless Claims for the week ending July 26 increased from 1.869 million to 1.875 million, ahead of forecasts of 1.870 million. Japanese statistics were also mixed, with investors noting a seasonally adjusted contraction in the balance of payments in June from 2849.9 billion yen to 1533.5 billion yen, worse than market expectations of 1790.0 billion yen. Meanwhile, the foreign trade balance returned to surplus at 556.3 billion yen after a deficit of –1108.9 billion yen in the previous month. Bank Lending volumes increased by another 3.2% in July, which fully matched analysts’ forecasts. The yen continues to receive significant support from the "hawkish" stance of the Bank of Japan, which for the first time in a long time managed to tighten monetary policy: last week, the regulator raised the interest rate to 0.25%, citing rising inflation risks. Financial authorities also intend to significantly reduce the volume of government bond purchases next year. At the same time, against the backdrop of the active growth of the national currency, as well as the fall of the Japanese stock market at the beginning of the week after the publication of a weak report on the US labor market, the regulator hastened to calm the markets: Deputy Governor of the Bank of Japan Shinichi Uchida emphasized that the cost of borrowing will not increase in the unstable situation.

XAU/USD

The XAU/USD pair is consolidating near 2420.00, awaiting the emergence of new drivers. The instrument is set to end the weekly session with a slight decline, as the "bulls" managed to recover most of the losses the day before. The macroeconomic background remains fairly calm at the end of the week, which does not lead to increased volatility. The day before, investors assessed US labor market statistics: Initial Jobless Claims for the week ending August 2 decreased from 250.0 thousand to 233.0 thousand, with preliminary estimates of 240.0 thousand, and Continuing Jobless Claims for the week ending July 26 increased from 1.869 million to 1.875 million, ahead of forecasts of 1.870 million. Currently, experts expect the US Federal Reserve to cut its interest rate by 50 basis points during the September meeting, and then by another 25 or 50 basis points, depending on the macroeconomic background and the reaction of traders. In turn, gold continues to be supported by ongoing geopolitical risks: military conflicts in Eastern Europe and the Middle East are not yet showing signs of ending soon. Moreover, market participants are concerned about a possible escalation of the situation following the Israeli rocket attack that killed Hamas political leader Ismail Haniyeh and Iran has vowed to carry out a retaliatory operation.