United States of America

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

Investors focus on the latest comments from US Fed officials, which signal the possibility of the first easing of monetary policy at the September meeting. Thus, yesterday, the head of the Federal Reserve Bank of San Francisco Mary Daly told the Financial Times that it was time to consider adjusting the cost of borrowing, emphasizing that the national labor market, although slowing, does not look poor. A similar position was voiced in an interview with The Wall Street Journal by the head of the Minneapolis Fed Neel Kashkari. He believes that a cut in the interest rate as early as next month is quite appropriate but an adjustment of more than –25 basis points is still premature. Analysts at the investment bank Goldman Sachs Group have changed their forecast for a recession in the US from 25.0% to 20.0%.

Eurozone

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

Due to a lack of significant economic releases, the currency’s movement is due to external factors. It is worth noting that investors are preparing for tomorrow’s publication of July inflation data, which will be key for officials at the European Central Bank (ECB) when deciding on the choice of further monetary policy. Analysts believe that the consumer price index will change from 0.2% to 0.0% MoM and from 2.5% to 2.6% YoY, while the core monthly indicator may decrease from 0.4% to –0.2% MoM and remain at 2.9% YoY. The implementation of forecasts will confirm the downward trend in price pressure in the European economy, supporting the opinion of most market participants about the September reduction in borrowing costs. At the moment, investors are counting on at least two more interest rate adjustments before the end of this year.

United Kingdom

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

Today, the August data on the house price index from Rightmove Group Ltd. was published. The indicator fell from –0.4% to –1.5% MoM and changed from 0.4% to 0.8% YoY. In addition, a 19.0% increase in the number of requests for the purchase of new homes was recorded (positive dynamics are observed for the first time since the decision of the Bank of England to reduce the cost of borrowing from 5.25% to 5.00%). The head of Rightmove Group Ltd. Tim Bannister said that that monetary policy easing and mortgage cut were a positive signal for property buyers and could help the sector recover.

Japan

JPY is strengthening its position against its main competitors — EUR, GBP, and USD.

Today, market participants focused on June data on core orders in mechanical engineering. It grew by 2.1%, significantly exceeding the forecast 0.9% MoM but fell by 1.7% YoY against preliminary estimates of 1.8%. Thus, pressure in the industrial sector of Japan remains, although analysts assess the economic recovery pace as positive, which, in turn, allows them to expect a further increase in the interest rate. In the Japanese media, according to which, the ruling Liberal Democratic Party has scheduled elections for a new leadership for September 27, after which the current Prime Minister Fumio Kishida will leave his post.

Australia

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

Due to a lack of significant economic releases, the movement of the quotes is due to external factors. On Tuesday, investors will pay attention to the publication of the minutes of the last meeting of the Reserve Bank of Australia (RBA), which took place earlier this month. Then, officials kept the interest rate at 4.35% but did not rule out the possibility of raising it if the economic situation required it. Market participants will look for hints in the document about further actions of financial authorities, and the terms and conditions under which monetary policy can change both ways.

Oil

Oil prices are ambiguous today.

The market remains under the influence of several opposing factors. Firstly, the quotes are under pressure from ongoing concerns about a further weakening of the Chinese economy. Recall that according to data published last Thursday, new home prices fell at the fastest pace in nine years, and Chinese oil refineries sharply reduced transshipment volumes in July due to poor domestic demand for fuel. Secondly, the downward trend is supported by expectations of a ceasefire in the Gaza Strip. Over the weekend, US Secretary of State Antony Blinken arrived in Tel Aviv to negotiate a ceasefire, although representatives of the Palestinian movement Hamas doubt that this mission will be successful. On the other hand, a more rapid fall in oil prices is prevented by the latest comments from US Fed officials, who hint at the advisability of cutting interest rates in September. In this case, the American economy will be able to receive an additional boost, and demand for energy resources in it will increase.