United States of America

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

Investors are focusing on the next steps of the US Federal Reserve in monetary policy. After the speech of the head of the regulator Jerome Powell at the Economic Symposium in Jackson Hole, market participants are confident that the cycle of interest rate cuts will begin in September, but the size of the first reduction in the cost of borrowing is still questionable: most experts expect an adjustment of 25 basis points, but the change may amount to 50 basis points. In this regard, it is worth highlighting the comments of the President of the San Francisco Federal Reserve Bank (FRB) Mary Daly, who yesterday confirmed in an interview with Bloomberg TV that the time for interest rate cuts has already come, however, the authorities should act cautiously and start the cycle with a reduction of 25 basis points, unless there is data on a significant deterioration in the labor market. Also, during the day, investors are expecting the publication of the August Conference Board consumer confidence index: the indicator could rise from 100.3 points to 100.9 points, providing additional support to the dollar.

Eurozone

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

Today, data on Germany's gross domestic product (GDP) for the second quarter was published, which turned out to be ambiguous: QoQ, the indicator fell by 0.1%, but YoY it was fixed at 0.0% with preliminary calculations of ˗0.1%. Thus, the negative dynamics may be reflected in the pan-European indicator, but these data may serve as an argument for monetary authorities in the issue of further reduction of interest rates. Also today, data on the consumer climate index in Germany for September from Gfk Group was published: the indicator fell from ˗18.6 points to ˗22.0 points. The company's expert Rolf Buerkl noted that the slight increase in consumer sentiment in August was temporary and was supported by the holding of the European Football Championship, but now the situation has changed for the worse: the rise in unemployment and the number of bankruptcies, as well as plans to reduce staff in various companies, are forcing citizens to worry about their financial situation.

United Kingdom

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

The Confederation of British Industry (CBI) retail sales change index for August rose from ˗43.0 points to ˗27.0 points, but was below the forecast of ˗11.0 points, recording negative dynamics for the third month in a row, which has already led to an adjustment in hiring and investment plans, and, according to forecasts, the situation may worsen in September. CBI principal economist Martin Sartorius noted that a drop in sales volumes is observed not only in retail, but also in wholesale trade, as well as in the car market. Today, the British Retail Consortium (BRC) price index for August was published: the indicator decreased from 0.2% to ˗0.3%. Thus, prices in large UK stores fell for the first time since October 2021 due to summer sales of clothing and home goods.

Japan

JPY has ambiguous dynamics against its main competitors – EUR, GBP, and USD.

Today, July inflation data was published: the corporate goods price index fell from 3.1% to 2.8% with preliminary estimates of 2.9%, and the core consumer price index from the Bank of Japan – from 2.1% to 1.8%, being below the target. The slowdown in price growth may give officials grounds for further postponement of the tightening of monetary policy, however, most experts are still confident that the regulator will raise the key rate at least once more before the end of the year.

Australia

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

In the absence of significant economic releases, the movement of the Australian dollar is due to external factors. On Wednesday, investors are expecting the publication of the average weighted consumer price index for July: the indicator may decrease from 3.8% to 3.4%. Thus, inflation will remain above the Reserve Bank of Australia's (RBA) target range of 2.0-3.0% but will reduce the likelihood of another interest rate hike by officials, which the regulator's head Michele Bullock previously warned about if price pressure in the economy increases.

Oil

Oil prices are falling today after three sessions of growth, but this correction seems temporary, as medium-term fundamental factors contribute to the market recovery.

Investors are still expecting the start of the interest rate cut cycle from the US Federal Reserve in September, which puts pressure on the American currency, and are also concerned about the growing tension in the Middle East, which could lead to interruptions in oil supplies from this region. In addition, the resumption of growth in prices for "black gold" in the near future may be facilitated by the closure of a number of Libyan fields due to an internal political conflict regarding the redistribution of oil revenues within the country. Currently, production has been stopped only at several enterprises, but it may soon be terminated on all of them. Also, during the day, investors are expecting the publication of weekly data on reserves from the American Petroleum Institute (API): they may decrease by 3.0 million barrels. If the forecast comes true, quotes will receive additional support.