United States of America

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

Due to a lack of significant economic releases, the movement of the quotes is due to external factors. Investors are waiting for the speech of the head of the US Fed, Jerome Powell, at the Economic Symposium in Jackson Hole, where he can confirm the agency’s plans to reduce the interest rate by 25 basis points or immediately by 50 basis points at the September meeting. Analysts believe that such actions will be timely for the implementation of a soft landing of the economy, in which inflation slows down without sharp unemployment and pressure on the labor market. It is also worth highlighting the new statements of the Democratic presidential candidate Kamala Harris. If elected, she promised to raise the corporate tax rate to 28.0% to fill the budget and finance major government projects, which is completely at odds with the rhetoric of Republican candidate Donald Trump, who has previously stated the need to minimize the tax burden on business.

Eurozone

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

Investors are focusing on the publication of inflation data, which met experts’ expectations. The consumer price index fell from 0.2% to 0.0% MoM and adjusted from 2.5% to 2.6% YoY, while the core indicator fell from 0.4% to –0.2% MoM, and the indicator consolidated around 2.9% YoY. In turn, the producer price index of the Eurozone’s largest economy, Germany, remained at 0.2% MoM and rose from –1.6% to –0.8% YoY. Thus, price pressure is slowing, contributing to the continued easing of monetary policy by the European Central Bank (ECB). In this regard, it is worth noting the latest comments from Bank of Finland Governor Olli Rehn. He said that the regulator might cut borrowing costs again in September due to the continued weakness of the economy, as the industrial sector showed no clear signs of growth.

United Kingdom

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

Investors are assessing the July statistics from the Insolvency Service. The document states that 2.191K corporate insolvency cases were registered in England and Wales, which is 7.0% less than in the previous month but 16.0% higher than in the same period last year. The agency’s experts emphasize that the total number of cases where the debtor could not fully satisfy the claims of creditors was recorded significantly higher than the figures during the COVID–19 pandemic. Thus, British business remains under pressure from the peak interest rates of the Bank of England, which is just beginning the reduction cycle.

Japan

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

On Wednesday at 01:50 (GMT 2), investors will pay attention to the July data on foreign trade. The volume of Japanese exports to overseas buyers may accelerate growth from 5.4% to 11.4%, while imports are expected to increase by 14.9% from 3.2% previously, while the trade balance may again become a deficit of 330.7B JPY. The implementation of forecasts will confirm the recovery of key sectors of the national economy and increase the likelihood of the Bank of Japan continuing to adjust interest rates.

Australia

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

The publication of the minutes of the latest meeting of the Reserve Bank of Australia (RBA) is at the center of investors’ attention. They note that a cut in the interest rate in the short term is unlikely, and the value should remain high for a long period to ensure the fight against inflation. Officials also discussed the possibility of further tightening of parameters due to the preservation of the core consumer price index at 3.9% and the general deterioration of financial conditions. However, no such decision was made. At present, the likelihood of a correction in Australian monetary policy seems unlikely, and most experts expect it to happen no earlier than spring 2025.

Oil

Oil prices have ambiguous dynamics. The market remains under the influence of opposing factors, being under pressure of signs of easing geopolitical tensions in the Middle East and fears of a slowdown in the Chinese economy.

Yesterday, US Secretary of State Antony Blinken said that Israeli Prime Minister Benjamin Netanyahu accepted proposals developed by Washington that will allow for a peace agreement with representatives of the Hamas movement on a ceasefire in the Gaza Strip. Also, the resumption of work at Libya's largest oil field, Sharara, the production volume of which has recently increased to 85.0K barrels per day, is contributing to the decline in prices. On the other hand, a more rapid downward trend is restrained by comments from US Fed officials, who hint at the advisability of cutting the interest rate at the September meeting. During the day, investors are awaiting the publication of weekly data on inventories from the American Petroleum Institute (API). Earlier, they fell by 5.205M barrels, and a continuation of this trend could support oil prices.