EUR/USD

The EUR/USD pair shows ambiguous trading dynamics, consolidating near 1.0860. Market activity remains subdued at the start of the week as few macroeconomic releases are expected and investors are actively discussing the prospects for changes in US monetary policy in the event of Donald Trump winning the presidential election in November. Markets are pricing in continued higher borrowing costs and a new twist in the "tariff war", which could prompt the European Central Bank (ECB) to take additional action and keep the euro at lower levels to remain competitive. Meanwhile, the European regulator is expected to gradually reduce the interest rate regardless of the outcome of the presidential race in the US. Last week, officials adjusted the figure by –25 basis points to 3.40%, noting growing problems in the pace of economic growth but also praising the results of the fight against high inflation in the region. In September, annual inflation in the eurozone slowed from 1.8% to 1.7%, and in monthly terms it lost 0.1%, as in the previous month, while the Core CPI remained at 2.7% and 0.1%, respectively. US data released last week showed a strong increase in Retail Sales in September from 0.1% to 0.4%, with analysts expecting 0.3%, while the indicator excluding auto sales accelerated from 0.2% to 0.5%, while analysts had expected 0.1%. Investors also took note of the significant increase in the Philadelphia Federal Reserve Bank's Manufacturing Business Activity Index in October, from 1.7 points to 10.3 points, compared to preliminary estimates of 3.0 points. Meanwhile, Industrial Production fell 0.3% in September after growing 0.3% in the previous month, while experts had expected a decline of 0.2%.

GBP/USD

The GBP/USD pair is trading with near-zero dynamics, holding close to 1.3040. The "bulls" are maintaining the upward momentum formed at the end of last week, but expect new drivers to emerge this week. Last Friday, the British currency received significant support from September data on Retail Sales: in annual terms, the indicator accelerated from 2.3% to 3.9% with a forecast of 3.2%, and in monthly terms, it fell from 1.0% to 0.3%, while analysts expected –0.3%. In turn, the indicator excluding fuel increased from 2.2% to 4.0%, with preliminary estimates of 3.2%. The pound has been under pressure at the start of the week following the release of macroeconomic statistics on Rightmove House Price Index: the index slowed in October from 1.2% to 1.0% year-on-year and from 0.8% to 0.3% month-on-month, which contributes to a further reduction in inflation risks in the country. Tomorrow, Bank of England officials, including the Governor of the regulator, Andrew Bailey, will speak: it is expected that officials will advocate a further reduction in the cost of borrowing, given the sharp fall in inflation in the country, as well as the easing of monetary policy by the Bank of England's main competitors, the US Federal Reserve and the European Central Bank (ECB). On Thursday, the UK will release data on business activity from S&P Global, with forecasts calling for a slowdown in the Manufacturing PMI from 51.5 points to 51.4 points, and in the Services PMI — from 52.4 points to 52.2 points.

AUD/USD

The AUD/USD pair shows mixed dynamics, remaining close to 0.6700. Some pressure on the instrument at the beginning of the week was exerted by the People's Bank of China's decision to cut the interest rate by 25 basis points from 3.35% to 3.10%, with expectations of 3.15%. Investors remain concerned about the pace of Chinese economic growth and the measures the government is taking to speed it up. In addition to the interest rate, the regulator officially launched the Securities, Funds and Insurance Swaps Facility (SFISF) last Friday. At the same time, data from China reflected a slowdown in the annual rate of Gross Domestic Product (GDP) in the third quarter in annual terms from 4.7% to 4.6%, while analysts expected 4.5%, and in quarterly terms the dynamics accelerated from 0.7% to 0.9% with preliminary estimates of 1.0%. Meanwhile, the Australian currency's position received a noticeable support after the publication of September labor market statistics last week: the Employment Change rose from 42.6 thousand to 64.1 thousand, which was significantly better than the expected decline to 25 thousand, with Full-Time Employment increasing by 51.6 thousand, and Part-Time Employment — by 12.5 thousand, while the Unemployment Rate remained at the same level of 4.1% against expectations of 4.2%. Statistics from the US at the end of last week showed an increase in Retail Sales: in September, the indicator increased from 0.1% to 0.4%, ahead of forecasts of 0.3%, and the Philadelphia Federal Reserve Bank's manufacturing business activity index jumped from 1.7 points to 10.3 points in October, while experts expected 3.0 points.

USD/JPY

The USD/JPY pair is showing a slight decline, developing the "bearish" momentum formed at the end of last week, when the instrument retreated from the local highs of August 1. The instrument is testing 149.20 for a breakdown, while trading participants expect new movement drivers to emerge. On Tuesday at 16:00 (GMT 2), the Richmond Fed's October Manufacturing PMI will be released, and FOMC member Patrick Harker will speak. The official is expected to advocate for a further rate cut, which will not have a significant impact on quotes, since, according to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a –25-basis-point adjustment in borrowing costs at the regulator's November meeting exceeds 85.0%. The upcoming US presidential elections are creating much greater uncertainty in the market: if Republican candidate Donald Trump wins, analysts expect more "hawkish" monetary rhetoric and a tightening of the tariff scale, which could lead to an intensification of the so-called "tariff wars". Japan releases Tokyo CPI data for October on Friday, with forecasts for a slowdown in the CPI excluding Fresh Food to 1.7% from 2.0%, which could put further pressure on the Bank of Japan, which is now seeking to implement tighter monetary policy.

XAU/USD

The XAU/USD pair is consolidating near 2725.00 during the morning session on October 21, waiting for new drivers to emerge. Demand for gold remains robust amid continued growth drivers, including growing uncertainty over the outcome of the US presidential election in November. Recent polls once again show that Republican Donald Trump, who intends to tighten tariff policy and slow the pace of interest rate reduction, could win the election. At the same time, analysts expect a further adjustment in the cost of borrowing by the US Federal Reserve in November in the near future: according to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a reduction of 25 basis points exceeds 85.0%. It is possible that before the end of this year the regulator will also resort to another easing of monetary parameters in December. Meanwhile, US macroeconomic statistics released last week showed Retail Sales accelerating in September from 0.1% to 0.4%, slightly above market forecasts of 0.3%, while the Philadelphia Federal Reserve Bank's manufacturing business activity index rose from 1.7 points to 10.3 points in October, up from preliminary estimates of 3.0 points. In addition, market participants paid attention to Initial Jobless Claims for the week ended October 11 decreasing from 260.0 thousand to 241.0 thousand, and Continuing Jobless Claims for the week ended October 4 increased from 1.858 million to 1.867 million, while analysts expected 1.87 million.