The United States of America

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

Investors’ attention remains focused on forecasts for further actions by the US Federal Reserve and comments from its leading officials. Thus, the head of the Federal Reserve Bank (FRB) of New York, John Williams, said that the regulator is on the path to lowering interest rates, despite stronger-than-expected January data on inflation and the labor market but will start it later this year. However, he did not give an exact date for the start of monetary policy easing. According to him, the key condition for making changes will be a stable movement of the consumer price index towards the target of 2.0%. According to a survey of experts from the country’s three largest brokerage firms (The Goldman Sachs Group Inc., UBS Global Wealth Management, and Morgan Stanley), in July, the US Federal Reserve will adjust borrowing costs by 25 basis points, while economists at The Goldman Sachs Group Inc. and Morgan Stanley expect an annual reduction of 100 basis points, and specialists at UBS Global Wealth Management – only 75 basis points.

Eurozone

EUR is strengthening against JPY, GBP, and USD.

Due to a lack of significant economic releases, currency movements are driven by external factors. According to the January survey of consumer inflation expectations in the Eurozone from the European Central Bank (ECB), most citizens expect average price growth to be 3.3% over the next 12 months, slightly higher than December’s 3.2%. At the same time, inflation forecasts for the next three years remained at 2.5%. In addition, European consumers expect a poor economic recovery and lower unemployment in the region.

The United Kingdom

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

The Confederation of British Industry (CBI) February Retail Sales Index rose from –50.0 points to –7.0 points, significantly stronger than forecast (–33.0 points), reaching a ten-month high but in March, the indicator is expected to correct to –15.0 points. Businesses surveyed by the CBI said they planned to continue disinvestment but expressed little optimism about the immediate economic outlook.

Japan

JPY is weakening against USD, EUR, and GBP.

The price index for corporate services fell from 2.4% to 2.1% YoY, although analysts expected it to remain at the same level: the slowdown in inflation indicators worries investors, as it increases the likelihood of delays in the Bank of Japan’s transition to tightening monetary policy. Tomorrow, the national consumer price index will be released: preliminary estimates show that the index will fall from 2.6% to 2.1% YoY in January, and the core value from 2.3% to 1.8%, below the target level of 2.0%, which will put additional pressure on the yen.

Australia

AUD is weakening against EUR, GBP, and USD but has an ambiguous performance against JPY.

On Wednesday, investors expect the publication of January data on the weighted average consumer price index: according to preliminary estimates, the indicator will increase from 3.4% to 3.6%. So, inflationary pressure in the economy will increase but will remain quite close to the target range of the Reserve Bank of Australia (RBA) at 2.0–3.0%. However, the implementation of these forecasts could push regulator officials to keep interest rates at current high levels for longer.

Oil

Oil prices are declining moderately.

Negative dynamics are developing for the second session in a row, as rising supply in the United States and concerns about poor oil demand in China offset the reduction in supplies by OPEC producers and the consequences of military conflicts in Ukraine and the Gaza Strip. In addition, experts believe that investors are beginning to include monetary risks in the quotes, fearing that the US Federal Reserve will maintain high interest rates for a long time. According to recent statements by analysts at The Goldman Sachs Group Inc., the premium for the risks of delivering fuel through the Red Sea is still very modest, around 2.0 dollars per barrel, that is, the impact of the problems for global oil shipping created by the Yemeni Houthis is still relatively small and cannot significantly support asset prices.