United States of America

USD is strengthening against EUR, JPY, and GBP amid the Republican candidate Donald Trump’s victory in the presidential election.

In addition, his supporters have gained a majority in the Senate, allowing them to control Congress and implement new economic plans that could have negative consequences for the country’s trading partners. Thus, the politician promised increased tariffs on imports, amounting to 10.0–20.0% for allies, and 60.0–100.0% for direct competitors, such as China. In addition, his election program includes a significant easing of taxes for businesses and citizens, which may increase the attractiveness of investment and production. However, experts believe that such steps could cause several significant problems. New trade wars with China or the Eurozone cannot be ruled out, which will negatively affect the global economy, and inflation within the country is possible since the cost of imports will increase with a decrease in tax pressure. Tomorrow, the US Fed is likely to adjust the interest rate by –25 basis points but against the implementation of the new government’s plans, the regulator may keep the interest rate the same in December and tighten the monetary policy next year.

Eurozone

EUR is weakening against JPY, GBP, and USD.

Investors fear that the victory of the Republican candidate Donald Trump will lead to new tariff wars that will put pressure on the Eurozone economy and cause its recession. The Eurozone PMI data released today was positive but could not change investor sentiment. The services PMI rose from 51.4 to 51.6 instead of the expected decline to 51.2, and the composite PMI from 49.6 to 50.0, entering the green zone. German indicators accelerated from 50.6 to 51.6 against 51.4 and from 47.5 to 48.6, respectively. Production volume in October adjusted from –5.4% to 4.2% due to increased demand for military equipment and transport, and the producer price index from 0.6% to –0.6% MoM and from –2.3% to –3.4% YoY, reflecting the stabilization of the European economy.

United Kingdom

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

The property activity index fell from 57.2 to 54.3, down from the expected 55.3, on concerns about a big tax hike from the Labor government and a slowdown in the monetary easing pace by the Bank of England. It may cut the interest rate by –25 basis points from 5.00% to 4.75% at the tomorrow’s meeting. However, after it, officials may take a break from changing borrowing costs until early next year, as the Office for Budget Responsibility (OBR) forecasts that a big increase in public spending could push inflation up to 2.6% next year.

Japan

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

The service PMI fell from 53.1 to 49.7, the lowest since March 2022, and entered the stagnation zone due to a decline in sales but business representatives consider this trend temporary and expect the sector to resume growth. Also today, the latest Bank of Japan meeting minutes were published. Most board members agreed that the economy is making progress in meeting the conditions for further monetary policy tightening, recovering amid accelerating inflation but supported a pause in interest rate adjustments, leaving it at 0.25% as long as global markets are in a state of uncertainty.

Australia

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

The American International Group Inc. (AIG) manufacturing PMI increased from –33.6 to –19.7 points in October, while the real estate PMI fell from –19.8 to –40.9 points. In general, national business remains under pressure from the Reserve Bank of Australia’s (RBA) tight monetary policy, which has not yet been able to curb high inflation. Yesterday, the regulator left the interest rate at 4.35%, warning of the need to keep the indicator at the peak level for some time.

Oil

Oil prices are adjusting downwards today amid the victory of Republican candidate Donald Trump in the US presidential election.

Experts fear a strengthening of the American dollar since the US Fed may abandon its “dovish” monetary policy to combat inflation caused by the official’s economic plans, including increasing import tariffs. Pressure on the Chinese economy may continue, leading to a production reduction and a decrease in oil demand from its leading global importer. An additional negative impact on the quotes is provided by a report from the American Petroleum Institute (API), which reflected an increase in reserves by 3.132M barrels instead of the forecast of 1.800M barrels. Today at 17:30 (GMT 2), investors wait for data from the Energy Information Administration of the US Department of Energy (EIA), which may record an increase of 0.300M barrels.