EUR/USD

The euro is showing a moderate correctional decline in the EUR/USD pair around 1.1120, retreating from the record highs since the end of December, renewed at the opening of the session. Today, market participants will pay attention to the July US Fed meeting minutes, which ended with the interest rate maintained at 5.50%. At the same time, many of them expect that in September, the regulator will begin to adopt a “dovish” course, actively reducing the interest rate (in total, two or three rate changes may be implemented before the end of the year). At the end of the week, the head of the US Fed, Jerome Powell, will speak at the annual Economic Symposium in Jackson Hole, where, among other things, he may speak in favor of a faster reduction in the cost of borrowing in September. The macroeconomic statistics presented yesterday did not support the single currency. The German July producer price index fell by 0.8% YoY after a correction of –1.6% a month earlier, and demonstrated growth of 0.2% MoM, as expected. The core consumer price index in the EU added 2.9% YoY, and the broader indicator – 2.6%. Yesterday, American investors paid attention only to a slight increase in the Redbook retail sales indicator for the week of August 16 from 4.7% to 4.9%.

GBP/USD

The pound is consolidating near 1.3000, slightly retreating from the record highs of July 2023, renewed yesterday. The dollar continues to weaken quite actively on the market, as traders expect an imminent change in the vector of monetary policy in the United States. The launch of the easing program may occur as early as September, and on Friday, the head of the American financial regulator, Jerome Powell, may give signals to the market about the timing and volumes of the adjustment of the cost of borrowing during his speech at the annual Economic Symposium in Jackson Hole. Thus, some analysts expect that after the end of the forum, the probability of a rate cut by 50 basis points will increase significantly, as already happened in early August after the publication of poor July labor market statistics. It is worth noting that the speech of the head of the Bank of England, Andrew Bailey, is due at the symposium, clarifying the prospects for further easing of monetary policy in the country. On Thursday at 15:45 (GMT 2), market participants will pay attention to the business activity statistics based on a survey of purchasing and supply managers of leading national enterprises and assess their attitude to the current economic situation and prospects for further development. The services PMI may fall from 55.0 points to 54.0 points and the manufacturing PMI consolidate at 49.6 points. At 14:30 (GMT 2), the US initial jobless claims are due, where an increase for the week of August 16 from 227.0K to 230.0K is expected.

AUD/USD

The Australian dollar shows ambiguous dynamics during the Asian session, consolidating near 0.6745 and local highs of July 17. Market participants are in no hurry to open new positions ahead of the publication of the minutes of the July meeting of the US Fed, hoping to receive signals from the financial authorities regarding the volume and timing of interest rate cuts, starting with the September meeting. At the moment, investors are analyzing whether the regulator will decide to reduce the value by 50 basis points at once. On Friday, the head of the department Jerome Powell, who will give a speech at the annual Economic Symposium in Jackson Hole, may also speak on this topic. The markets are evaluating the minutes of the Reserve Bank of Australia (RBA). The document supported the “bullish” sentiment on the instrument since it reflected the authorities’ readiness for new interest rate increases in the event of increased inflation risks. According to economists, it will most likely remain stable if the situation develops according to a favorable scenario. The RBA will refrain from the “dovish” rhetoric soon, strengthening the Australian dollar, especially if the US Fed begins to ease monetary policy in September.

USD/JPY

The American dollar is gaining in value in the USD/JPY pair during the Asian session on August 21, correcting after a confident three-day “bearish” rally, when the quotes retreated from the highs of August 2 to the lows of August 7. At the moment, the instrument is testing 145.70 for a breakout. Still, the American currency has limited potential for growth since analysts wait for the minutes of the US Fed’s July monetary policy meeting today at 20:00 (GMT 2). The document may contain signals to the market about the pace and magnitude of the interest rate cut. Some analysts still assume that the financial authorities may make an adjustment of –50 basis points at once, and will conduct two more reductions by the end of the year. On Friday, traders will focus on the speech of the head of the US Fed, Jerome Powell at the annual Economic Symposium in Jackson Hole. He may continue the “dovish” rhetoric, given the low inflation and limited risks of recession in the American economy. The yen is under pressure from the July foreign trade data. Exports grew by 10.3% YoY compared to 5.4% previously, although forecasts suggested a correction of 11.4%, while imports showed faster dynamics from 3.2% to 16.6% with preliminary estimates of 14.9%. It led to a deficit in the trade balance of 621.8B yen, almost twice as high as expected by experts – 330.7B yen. Last month, the indicator reached 224.0B yen.

XAU/USD

Gold prices are consolidating around 2515.00 before the emergence of new drivers. Today at 20:00 (GMT 2), the minutes of the July meeting of the US Fed on monetary policy are due. In July, the regulator kept the interest rate at 5.50% but did not rule out the possibility of a quick easing of the parameters, without waiting for inflation to fall to the lower limits of the target range. The current trend assumes an adjustment of the value by –25 basis points during the September meeting, as well as one or two more reductions by the end of this year. Some analysts are confident that the regulator will decide to reduce it by 50 basis points at once, partly because the market is already partially ready for this. The likelihood of such a step significantly increased in early August, when the US presented macroeconomic data on the labor market.