United States of America

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

Investors are focused on the presidential elections in the United States that are taking place today. According to the latest polls, both candidates — Donald Trump from the Republican Party and Kamala Harris from the Democratic Party — have an almost equal number of votes. In these conditions, identifying the winner may take several days or even weeks, during which market movements will be extremely unstable. If Donald Trump wins, experts fear a resumption of trade wars, tightening of immigration laws, and the country's withdrawal from climate agreements. In particular, the Republican promised to increase duties on all imported goods: they will amount to 10.0–20.0% from allied countries, and for direct competitors of the United States, for example, China, they will be 60.0–100.0%. According to economists, such a policy could lead to a loss of up to 1,700.0 dollars per year for the average American household, as well as to an increase in inflationary pressure and the US Federal Reserve's abandonment of the “dovish” course of monetary policy. In this case, all the positive consequences for business from a significant tax cut, which the Trump administration also proposes, will be leveled out. The possible presidency of Kamala Harris is perceived by experts more calmly, since no serious shocks are expected under her: the fight against rising prices will continue, and interest rates will be reduced, providing support for the economy.

Eurozone

EUR is strengthening against USD and JPY but is showing ambiguous dynamics in pair with GBP.

Investors are watching the US presidential election, which could have a significant impact on the Eurozone economy: if Republican candidate Donald Trump wins, tariffs on imported goods could increase significantly, which could lead to retaliatory measures by the EU authorities and the onset of a recession in the Eurozone. It is possible that a change in the White House administration will also become a barrier to achieving the inflation targets of the European Central Bank (ECB): last week, the head of the regulator, Christine Lagarde, confirmed that the dynamics of consumer price growth will reach the target of 2.0% during 2025, but this will only happen if the economy does not experience serious shocks.

United Kingdom

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

October business activity data was released today: the Services PMI fell from 52.4 points to 52.0 points against expectations of 51.8 points, and the Composite PMI – from 52.6 points to 51.8 points instead of 51.7 points, reflecting the weakest pace of recovery in the past 11 months. Experts note that the decline in indicators was due to the uncertainty of tax policy in the new government budget, as well as low household spending. In addition, some companies noted a restriction of their budgets due to rising labor costs.

Japan

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

Investors are awaiting the publication of the Bank of Japan's minutes on Wednesday, which could provide clues about further action, including the timing of further monetary tightening. Currently, most experts expect borrowing costs to be raised again only next year. As Makoto Sakurai, a former board member, noted today, domestic political uncertainty is unlikely to allow policymakers to act in December, but a 25 basis point adjustment to interest rates in January looks possible, as new data will emerge by then, including on whether consumption and wage growth will continue to hold up.

Australia

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

Investors are focused on the results of today's meeting of the Reserve Bank of Australia (RBA), at which the regulator left the key rate at a 12-year high of 4.35% and warned that monetary policy should remain tight for some time. Officials indicated that they are not currently considering either further increases or the beginning of a reduction in borrowing costs. The latest forecasts indicate that core inflation will only fall to 3.4% by the end of the year and will not reach the target range until 2026, so experts are still confident that the “dovish” cycle will not begin until spring next year.

Oil

Oil prices are making moderate attempts to grow today amid the decision by OPEC participants to postpone plans to increase production for a month, but more rapid dynamics are being held back by the impossibility of predicting the results of the US presidential elections.

So, investors are afraid of the victory of the Republican candidate Donald Trump, since new trade wars could put pressure on the global economy and increase the risks of a decrease in demand for “black gold”. During the day, experts are also expecting the publication of a report on reserves from the American Petroleum Institute (API): they could grow by 1.8 million barrels. In this case, prices will come under additional pressure.