United States of America

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

Investors are focused on the appointment of well-known investor Scott Bessent as Secretary of the Treasury by US President-elect Donald Trump. He is 62 years old, and his entire career is associated with managing finances on Wall Street. When introducing the appointment, Trump said that Bessent was widely respected as one of the world’s leading international investors, as well as geopolitical and economic strategists. Experts reacted positively to this message, believing that the politician is well acquainted with the specifics of the markets and will be able to keep the Republican administration from making too abrupt economic changes. It is known that the new secretary advocates tax reforms and reducing government regulation, as well as stimulating more bank lending. Investors hope he will not allow a sharp increase in trade tariffs, which could cause a new wave of inflation in the economy. On Friday, the US PMI November data was released. The manufacturing PMI rose from 48.5 to 48.8, the service PMI from 55.0 to 57.0, and the composite PMI from 54.1 to 55.3, reducing the likelihood of a December interest rate cut by the US Fed.

Eurozone

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

The Institute for Economic Research (IFO) business climate index fell from 86.5 to 85.7, beating forecasts, the current business conditions indicator fell from 85.7 to 84.3 against estimates of 85.4, and the business expectations indicator fell from 87.3 to 87.2. Experts note that the downturn has affected all sectors except retail and wholesale trade. Company management is optimistic despite the likelihood of higher trade tariffs from the new US administration. However, the German economy is still in recession, and its growth this year may be the weakest among the G7. Meanwhile, the European Central Bank (ECB) chief economist Philip Lane said that it will take time to stabilize inflation around 2.0% but the regulator’s policy should not remain restrictive for too long so that consumer price growth does not slow down more than necessary.

United Kingdom

GBP is weakening against USD and EUR but has ambiguous dynamics against JPY. Bank of England Deputy Governor Clare Lombardelli said that the direction of further inflation movement was currently not yet determined since the recent pessimistic results of national business surveys reflected the likelihood of a slowdown in consumer price growth, while a significant increase in wages, on the contrary, could become a driver for accelerating the rate of the indicator. The official considers the latter option to be more dangerous since in this case the regulator will be forced to take additional regulations. In particular, she did not rule out a scenario in which wage growth slows to 3.5–4.0%, and inflation stabilizes around 3.0%. Lombardelli confirmed that the department needs to monitor the situation and act in a timely manner to avoid additional complications.

Japan

JPY has ambiguous dynamics against EUR, GBP, and USD.

A Reuters poll of leading economists on Japan’s inflation prospects showed that most respondents believed that consumer prices in the Tokyo metropolitan area likely rose above the Bank of Japan’s 2.0 percent target in November due to cuts in fuel subsidies and higher food prices. Core CPI may rise from 1.8% to 2.1% YoY, raising the prospect of a 25 basis point interest rate adjustment in December.

Australia

AUD is weakening against GBP, EUR, and JPY but ambiguous against the US dollar.

With no major economic releases to speak of, the currency’s dynamics are largely driven by external factors, with investors weighing a revised outlook from Westpac Banking Corp. on the Reserve Bank of Australia’s (RBA) interest rate cut. While experts had assumed that officials would ease monetary policy in February, it is expected not to happen until at least May but then the reduction in borrowing costs will be carried out quite aggressively. The new estimates coincide with similar assumptions published earlier by the National Australia Bank (NAB).

Oil

Oil prices are trying to decline, although the overall market is in a state of uncertainty, as investors await the OPEC meeting on December 1.

Experts suggest that producers may change again at the start of increasing oil production, and the reduction of restrictions will take place in February. Let us recall that experts initially expected it to be October of this year. As reasons for adjusting the dates, analysts cite the weakening oil demand from China and new plans of the administration of the elected US President Donald Trump to increase oil production. If the forecasts are realized, oil prices will receive significant support.