United States of America

USD is moderately strengthening against EUR and GBP but weakening in pair with JPY.

Investors are still focused on the results of the US Federal Reserve meeting, where interest rates were cut by 25 basis points – from 5.00% to 4.75%. This time the decision was made unanimously, unlike the previous reduction in the cost of borrowing, against which Michelle Bowman voted. The accompanying statement indicated that the risks to achieving the employment and inflation targets are now roughly balanced, and labor market conditions have improved, since, although the unemployment rate has increased slightly, it has still not reached the “red” zone. In turn, the head of the regulator, Jerome Powell, noted that the change in the White House administration will not affect monetary policy, which will continue to be based on an analysis of current economic data. According to the official, the US Fed will respond only to specific economic steps of the new government, which are likely to happen no earlier than the beginning of next year. Thus, the current “dovish” course of monetary policy in the American economy is maintained and another reduction in the cost of borrowing in December seems quite possible. It is also worth noting the weekly data on the labor market published yesterday: the number of initial applications for unemployment benefits increased by 221.0 thousand, which was less than the forecast of 223.0 thousand, but more than the previous figure of 218.0 thousand, while the total number of citizens receiving assistance from the state increased from 1.853 million to 1.892 million.

Eurozone

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

Yesterday, the head of the Central Bank of Greece, Yannis Stournaras, joined the opinion of his colleagues at the European Central Bank (ECB) and said that the Eurozone economy will be in a difficult situation if the elected US President Donald Trump implements his promises to introduce tariffs and trade barriers, which could also put the euro under pressure. However, the official noted that until the new White House administration takes any specific steps, the previous policy of the monetary authorities will continue. It should also be noted that, predicting possible options for a “trade war”, experts believe that the response of the European authorities will not be significant: last year, the volume of exports from the Eurozone countries to the United States amounted to 534.0 billion dollars, while American businesses supplied goods to the EU for only 370.0 billion dollars. At the same time, US officials have mechanisms to introduce additional duties on almost the entire volume of imports, but among the imported goods there are many critical ones that will be difficult to replace, for example, aircraft, chemicals, fuel. Thus, if a trade conflict begins, the European economy will be in a clearly losing position.

United Kingdom

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

Investors are focused on the results of the Bank of England (BoE) meeting, at which the key rate was reduced by 25 basis points, from 5.00% to 4.75%. Officials noted that further easing of monetary policy will be gradual due to high consumer prices and significant economic growth. However, the head of the regulator Andrew Bailey hinted at the possibility of a more significant reduction in the cost of borrowing as inflationary pressure in the economy weakens. It is also worth noting the adjustment of forecasts for further actions of the BoE by Barclays Investment Bank: analysts now believe that against the backdrop of the adoption of the new UK government budget and the victory of Donald Trump in the US presidential election, the regulator will take a cautious position and will not adjust interest rates at the December meeting, although it was previously assumed that officials would reduce the cost of borrowing by another 25 basis points. At the same time, in 2025, Barclays Investment Bank experts expect the BoE to consistently reduce the key rate in February, May, June, August, and September, after which it will reach 3.50%.

Japan

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

Today, September data on Japanese household spending was published: MoM, it decreased by 1.3% with preliminary estimates of 0.7%, and YoY – by 1.1%, instead of 1.8%. Thus, citizens' spending is declining, which may indicate a decrease in inflationary pressure in the economy and, consequently, the preservation of the previous monetary policy by the Bank of Japan (BoJ). It is also worth noting that today the government announced the preparation of a new package of measures to stimulate the economy, which includes subsidies for utility bills and cash payments to low-income families.

Australia

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

Investors are awaiting for the release of October labour market data, which could influence the Reserve Bank of Australia’s (RBA) next steps: employment is expected to slow from 64.1 thousand to 25.0 thousand, and unemployment is expected to adjust from 4.1% to 4.2%. The realization of these forecasts will confirm the continuing pressure from high interest rates and could become an argument for the regulator’s policymakers to discuss the possibility of cutting them.

Oil

Oil prices are under pressure today.

According to the latest forecasts from the US National Hurricane Center, hurricane Rafael, which has reduced crude oil production in the country by 391.214 thousand barrels per day, will weaken in the coming days and move away from the fields to the Gulf Coast. Thus, the volume of “black gold” production will soon be restored. Additional pressure on the market is being exerted by data according to which crude oil imports to China in October fell by 9.0% for the sixth month in a row.