EUR/USD

The EUR/USD pair is showing a weak decline, retreating from the local highs of September 6, updated the day before. The instrument is testing 1.1120 for a breakdown, while traders are awaiting the results of the two-day meeting of the US Federal Reserve, which starts today. Fed officials, including Chairman Jerome Powell, have in recent weeks indicated that borrowing costs will ease this month as inflation eases and the labor market continues to cool down. In the last few days, analysts have once again revised their forecasts for an interest rate adjustment by as much as –50 basis points: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, this probability peaked at almost 60.0% at the beginning of the week, while in the middle of last week this scenario was estimated at no more than 25.0-30.0%. In total, by the end of 2024, the reduction could reach 125 basis points. The day before, American investors paid attention to the publication of the Manufacturing PMI from the Federal Reserve Bank of New York, which rose from –4.7 points to 11.5 points in September, while experts expected 3.9 points. The macroeconomic statistics from the EU published the day before did not affect the dynamics of the instrument: thus, the Consumer Price Index in Italy in August remained at the same levels of 0.2% in monthly terms and 1.1% in annual terms, approaching the levels recorded before the COVID-19 pandemic and confirming the confident positive trend. In turn, the indicator calculated according to EU standards was adjusted from 1.3% to 1.2% year-on-year and from –0.1% to –0.2% month-on-month. The eurozone's seasonally adjusted Trade Balance fell from 21.7 billion euros to 21.2 billion euros in July, while analysts had expected a significant slowdown to 14.9 billion euros. Today at 11:00 (GMT 2), the eurozone will release September economic sentiment data from the Centre for European Economic Research (ZEW): the German Business Sentiment Index is expected to fall from 19.2 points to 17.1 points, while the overall eurozone Economic Sentiment index is likely to fall from 17.9 points to 17.6 points.

GBP/USD

The GBP/USD pair is trading with a slight negative trend, consolidating near 1.3200, above which the instrument has not yet managed to consolidate. The day before, quotes demonstrated quite active growth, which, however, was supported by previous factors and expectations of an imminent easing of monetary policy by the US Federal Reserve. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of the regulator cutting borrowing costs by 50 basis points at once is currently about 59.0%. Forecasts regarding additional reductions in the remaining two meetings before the end of the current year (in addition to the September one) are adjusted proportionally. The Bank of England is set to meet on Thursday, September 19, but markets are confident that no decision will be made on further easing of monetary conditions. However, updated comments from the UK regulator will be important, as will the August inflation data, which will be published the day before. Analysts expect the annualized Consumer Price Index to remain at 2.2%, with the Core CPI rising from 3.3% to 3.5%, which would signal in favor of keeping the Bank of England's monetary policy vector unchanged. In turn, the Retail Price Index in August may slow down from 3.6% to 3.4%.

NZD/USD

The NZD/USD pair is showing an uncertain decline, retreating from the local highs of September 6, updated the day before. The instrument is testing 0.6193 for a breakdown, while traders are awaiting the results of the two-day meeting of the US Federal Reserve. The US currency's positions are under pressure amid expectations of a more rapid easing of monetary policy: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 50-basis-point cut in interest rates during the September meeting is 55.0-59.0%, while just a few days ago it did not exceed 30.0%. It is also quite possible that the Fed officials will signal in favor of additional adjustments to the parameter before the end of this year. In turn, some support for the instrument in the last few days has been provided by macroeconomic statistics from New Zealand: at the end of last week, markets paid attention to the growth of the Manufacturing PMI in August from 44.4 points to 45.8 points, and the Services PMI from Business NZ rose from 45.2 points to 45.5 points, reaching its high since April. Meanwhile, more active growth of the NZD/USD pair is hampered by statistics from China, raising concerns about the state of the national economy: Industrial Production in August slowed down from 5.1% to 4.5% with expectations of 4.8%, and Retail Sales fell from 2.7% to 2.1% with a forecast of 2.5%.

USD/JPY

The USD/JPY pair is showing weak growth, correcting after another "bearish" rally, which resulted in a renewal of the record lows of July 2023 at 139.57. The US currency has extended its decline in recent days as investors revise expectations for a potential 50-basis-point cut in US interest rates at its September meeting, which begins today. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of such a scenario currently being realized is about 60.0%, while in the middle of last week it was estimated at no more than 30.0–35.0%. It is also quite possible that the Fed officials will signal in favor of additional adjustments to the parameter before the end of this year. The Japanese currency's position is receiving some support from macroeconomic statistics: the Tertiary Industry Index in July added 1.4% after –1.2% in the previous month, while analysts expected 1.0%. Investors are also awaiting the outcome of the Bank of Japan meeting later this week, but are confident that there will be no change in monetary policy. Earlier, regulator officials promised to refrain from further tightening monetary conditions during a period of turbulence in financial markets. On Friday, August inflation statistics will hit the market: the National Consumer Price Index excluding Fresh Food in August could adjust from 2.7% to 2.8%.

XAU/USD

The XAU/USD pair is little changed, holding near the record level of 2580.00. The "bullish" momentum that exists on the market turns out to be insufficient for more active growth of the instrument. Moreover, many investors are preferring to wait for the outcome of the two-day meeting of the US Federal Reserve, especially in connection with the fact that forecasts for a 50-basis-point interest rate cut have again increased significantly. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the regulator is expected to ease monetary policy more actively with a probability of 59.0%, while last week a similar scenario was estimated at approximately 35.0%. Officials may also comment on the possibility of further reductions in borrowing costs before the end of this year. The Bank of England and the Bank of Japan will hold meetings this week, but unlike the American regulator, no changes in the vector of monetary policy are expected here. Today, the US will release August Retail Sales data: analysts expect the indicator to slow down from 1.0% to 0.2%, and excluding autos — from 0.4% to 0.3%. Also, during the day, statistics on Industrial Production will hit the market: zero dynamics are expected after –0.6% in the previous month.