United States of America

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

Yesterday, the data on the consumer confidence index for August was published, which was strong. The indicator rose from 101.9 points to 103.3 points instead of the expected 100.9 points, confirming households’ confidence in the prospects for the recovery of the national economy and strengthening the dollar’s position against its main competitors. Also in the center of investors’ attention remains the imminent easing of monetary policy. Yesterday it became known that the heads of the Federal Reserve Banks (FRB) of Chicago and New York voted in July to reduce the key rate by 25 basis points but most officials then still decided to keep the cost of borrowing at the same level. Experts believe now it is unlikely that the parameters will be changed in September. However, the first adjustment will be determined by the publication of the August unemployment data. If the upward trend continues, the step will probably be –50 basis points, otherwise officials will limit themselves to only –25 basis points.

Eurozone

EUR is weakening against its main competitors – JPY, GBP, and USD.

Due to a lack of significant economic releases, the euro’s movement is due to external factors. It is worth noting the comments of the head of the Central Bank of the Netherlands Klaas Knot, who said yesterday that the European Central Bank (ECB) could gradually reduce interest rates if inflation continues to slow down. However, more positive data is needed to make a decision in September. The politician also confirmed that the regulator expects the consumer price index to be stable around 2.0% at the end of 2025.

United Kingdom

GBP is strengthening against EUR and JPY but weakening against USD.

UK Prime Minister Keir Starmer is visiting Germany in an attempt to restore partnership relations after Brexit. He agreed with Chancellor Olaf Scholz to develop a new document covering wide areas of cooperation, from the defense industry to trade, designed to improve partnerships in business, science, culture, and technology. However, it will not mean the cancellation of the country’s exit procedure from the Eurozone. In a joint declaration, the UK and Germany said they hoped to sign the agreement early next year, while the defense ministers are also working on a new agreement.

Japan

JPY is weakening against GBP and USD but strengthening against EUR.

It is worth noting the latest comments from Bank of Japan board member Ryozo Himino, who confirmed that the regulator would raise interest rates if inflation remained at the same level. At the same time, the official promised to monitor the situation on the financial market, which remains unstable. The comments echo those of Bank of Japan Governor Kazuo Ueda, backing up the rhetoric of Bank of Japan Governor Kazuo Ueda, who has suggested that recent volatility will not derail long-term plans to tighten monetary policy.

Australia

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

Investors are focusing on inflation data, with the weighted average consumer price index falling to 3.5% YoY in July from 3.8%, below expectations of 3.4%, as cheaper electricity is helped by government subsidies and rebates, although without them it was up 0.9%. The data raises the possibility that the Reserve Bank of Australia (RBA) will keep interest rates at their peak. The most optimistic traders expect the monetary policy adjustment to begin in November but most experts expect it to happen next year.

Oil

The market correction continues but in the medium term, positive dynamics may resume against a favorable fundamental background.

Libya’s oil fields remain partially closed due to internal political disagreements, which may result in the oil supply being stopped completely. In addition, investors expect the US Fed to begin cutting interest rates soon, which will put additional pressure on the dollar. Yesterday, the American Petroleum Institute (API) report on oil reserves recorded a decrease of 3.400M barrels. Today, similar data will be published by the US Energy Information Administration (EIA). According to preliminary estimates, the indicator will decrease by 2.700M barrels, strengthening the quotes.