United States of America

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

Investors are assessing the US Fed officials’ comments regarding the regulator’s further actions. Thus, the head of the Federal Reserve Bank of Chicago, Austan Goolsbee, said that inflation is approaching the target of 2.0%, the labor market has weakened, and the economy is now close to stable full employment, which is a signal to maintain the “dovish” rhetoric but given the political uncertainty, it is worth slowing the pace of reducing the cost of borrowing. At the same time, the official did not clarify the situation regarding the reduction of interest rates at the December meeting. In addition, earlier, the head of the US Fed, Jerome Powell, stated that he did not intend to resign after the change of the White House administration. However, today, The Wall Street Journal published an article according to which President-elect Donald Trump may appoint Kevin Warsh as Secretary of the Treasury and then transfer him to the position of chairman of the regulator. Note that Warsh was already a member of the Board of Governors of this organization and publicly expressed his doubts about expanding its balance sheet.

Eurozone

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

In November, the EU manufacturing PMI fell from 46.0 points to 45.2 points, although experts expected it to remain at the same level, the service PMI from 51.6 points to 49.2 points, and the composite PMI from 50.0 points to 48.1 points, ending up in the stagnation zone. A similar situation has developed in the Eurozone’s largest economy, Germany: despite the growth of the index in the manufacturing PMI from 43.0 points to 43.2 points, the service PMI fell from 51.6 points to 49.4 points, and the composite PMI from 48.6 points to 47.3 points. In addition, Q3 Germany’s gross domestic product (GDP) increased by 0.1% compared to the forecast of 0.2% QoQ and decreased by 0.3% against 0.2% YoY. It reflected the likelihood of a recession in the economy, and under these conditions, officials from the European Central Bank (ECB) may take additional measures to ease monetary policy.

United Kingdom

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

In November, the manufacturing PMI fell from 49.9 points to 48.6 points instead of the expected growth to 50.1 points, the services PMI – from 52.0 points to 50.0 points against 52.3 points, and the composite PMI – from 51.8 points to 49.9 points against the government raising taxes in the new budget. Experts note that several manufacturers are concerned about the likelihood of trade duties being introduced by the United States, in addition, they note a decrease in investment in projects. October data on retail sales also failed to support the national currency. The indicator was corrected by –0.7% MoM, although analysts expected –0.3%, and by 2.4% against preliminary estimates of 3.4% – YoY.

Japan

JPY is strengthening against EUR and GBP and has ambiguous dynamics against USD.

In October, the national consumer price index fell to 2.3 percent from 2.5 percent, while the core CPI fell to 2.3 percent from 2.4 percent, slowing for the second month and preventing the Bank of Japan from raising interest rates. However, most experts polled by Reuters still believe the central bank can raise borrowing costs by 25 basis points at its December meeting to support the currency. Meanwhile, the services PMI fell to 50.2 from 49.7, the manufacturing PMI fell to 49.0 from 49.2, and the composite PMI fell to 49.8 from 49.6.

Australia

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

In November, the service PMI fell from 51.0 points to 49.6 points, returning to the stagnation zone, the manufacturing PMI rose from 47.3 points to 49.4 points, as a result of which the composite PMI decreased from 50.2 points to 49.4 points. All values ​​are in the red zone, confirming the ongoing pressure on the national economy but experts do not expect active actions from the Reserve Bank of Australia (RBA) until spring.

Oil

Oil prices are correcting downwards under pressure from poor business activity data in the Eurozone and the UK, confirming a slowdown in major global economies and a likely decrease in demand for energy.

Meanwhile, according to the forecast of JPMorgan Chase & Co., in 2025, the average price of a barrel of Brent Crude Oil will be 73.0 dollars, and WTI Crude Oil 64.0 dollars. Experts also expect a slowdown in the growth rate of global hydrocarbon consumption from 1.3M barrels per day this year. m year to 1.1M barrels per day – next year, and if 2025 China remains the leader in this area, in 2026 it could become India.