United States of America

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

Today is a holiday in the US, so financial institutions are closed and investor activity is reduced. On Friday, key data on the labor market for August is due. Earlier, US Fed officials hinted that in the context of a stable decline in inflation, the size of the first interest rate cut at the September meeting depended on the unemployment rate, which increased from 4.1% to 4.3% in July. If the trend continues, a reduction in the cost of borrowing by 50 basis points is likely. If the indicator remains the same or begins to weaken, as the forecast suggests (4.2%), the regulator may take a more cautious position. Most experts expect three reductions in the indicator with a total volume of 100 basis points before the end of the year.

Eurozone

EUR is strengthening against JPY, GBP, and USD.

In August, the Eurozone manufacturing PMI increased from 45.6 to 45.8, while in Germany, it increased from 42.1 to 42.4, continuing to weaken, albeit more slowly than before. Business representatives note a significant reduction in the volume of new orders, both domestic and international, which puts pressure on the industry in the short term. Against statistics, the European Central Bank (ECB) may continue to cut interest rates to support the region’s economy. Thus, Bank of France Governor François Villeroy de Galhau said in an interview with Le Point magazine that the regulator would be wise to reduce borrowing costs again in September.

United Kingdom

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

In August, the manufacturing PMI rose from 52.1 to 52.5, a two-year high, supported by domestic demand, which offset the decline in exports. Experts note that the recovery is developing in all production sectors, especially in the investment goods sector. The statistics increase the likelihood that Bank of England officials will take a wait-and-see attitude and keep the interest rate at the same level at the September meeting.

Japan

JPY is weakening against EUR, GBP, and USD.

The August manufacturing PMI rose from 49.1 points to 49.8 points, exceeding the forecast of 49.5 points and finding itself on the edge of the positive zone. The industry continues to slow down but its pace is already insignificant, and experts expect it to recover soon. At the same time, note that demand remains poor, and the volume of new orders, although slightly, is declining. However, companies expect an increase in sales in the automotive and semiconductor industries.

Australia

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

The August manufacturing PMI rose from 47.5 points to 48.5 points, failing to meet the forecast of 48.7 points. The industry is slowing moderately under the pressure of high inflation and the tight monetary policy of the Reserve Bank of Australia (RBA), which may completely abandon its easing by the end of the year. In addition, data on building permits was published today. The total July volume increased by 10.4% instead of the expected 2.4%, and the indicator for private homes by 0.6%.

Oil

The current growth in the quotes seems to be corrective since the short-term fundamental background remains negative for the market.

Economic statistics from China increased fears of a decrease in oil demand from the world’s second economy. In August, the manufacturing PMI fell from 49.4 points to 49.1 points compared to preliminary estimates of 49.5 points. According to Reuters, OPEC members intend to begin the planned increase in hydrocarbon production from October. Production in the eight cartel countries may increase by 180K barrels per day, leading to excess supply and puting additional pressure on prices.