United States of America

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

Investors are assessing the latest comments from US Fed Board of Governors member Michelle Bowman. Yesterday, she said that she remained cautious about any changes in monetary policy due to the continuing risks of accelerating inflation. The official warned that a premature reaction to changes in individual economic indicators could negatively affect the successes achieved in the fight against high consumer prices. Thus, Bowman’s rhetoric was the most restrained compared to other statements by members of the regulator. Most of them agreed with the possibility of reducing the rate in September. At 20:00 (GMT 2), market participants will pay attention to the minutes of the latest US Fed meeting, which may clarify the financial authorities’ further steps around ​​monetary policy.

Eurozone

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

Market participants are assessing the data on wage growth published yesterday by the German Federal Bank. The Q2 indicator was 3.1%, significantly lower than 6.2% in the previous period. The slowdown confirms the reduction of general inflationary pressure in the Eurozone, being a positive signal for the European Central Bank (ECB) in implementing the plan to reduce the cost of borrowing. Most experts expect at least two more interest rate adjustments before the end of the year.

The United Kingdom

GBP is strengthening against EUR, JPY, and USD.

Today, data on net borrowing by the British public sector was published. They amounted to the highest since July 2023 – 3.101B pounds, although experts believed the figure would not exceed 1.500B pounds. Commenting on the statistics, the Deputy Minister of Finance of The United Kingdom, Darren Jones, said that the positive dynamics are further evidence of the terrible legacy left by the previous Conservative government and now significantly complicates the process of minimizing the national debt. Recall that earlier, the Chancellor of the Exchequer, Rachel Reeves, announced the need to increase government fees: now, the authorities will probably focus on indexing income tax, corporate tax, and value-added tax. In this case, British businesses may come under additional pressure.

Japan

JPY weakens against EUR, GBP, and USD.

Today, the July data on foreign trade was published, which did not meet the expert’s expectations. The July exports increased by 10.3% instead of the expected 11.4%, and imports — by 16.6% against preliminary estimates of 14.9%, while the trade balance deficit amounted to 621.8B yen, exceeding the forecast of 330.7B yen. Experts note that the less serious than expected exports growth was facilitated by low car sales. Still, in general, the July trade statistics confirm the further recovery of the national economy, which may allow the Bank of Japan to continue tightening monetary policy. 57.0% of market experts surveyed by Reuters expect at least one more interest rate reduction before the end of the year.

Australia

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

Due to a lack of significant economic releases, the movement of the currency is due to external factors. Investors are preparing for tomorrow’s publication of August business activity data. The manufacturing PMI may remain at 47.5 points, the services PMI may decrease from 50.4 points to 50.1 points and will be on the verge of stagnation, while the composite PMI may change from 49.9 points to 49.6 points. In general, activity is slowing, serving as an argument for officials at the Reserve Bank of Australia (RBA) to cut interest rates. Still, now, most investors are confident that active steps in this direction will not be taken until early next year.

Oil

Oil prices are trying to grow today.

Investors are awaiting the publication of the US Fed meeting minutes and Friday’s speech by its head, Jerome Powell, to see if officials are determined to begin easing monetary policy. However, the price growth is restrained by the latest report on commercial reserves from the American Petroleum Institute (API). The indicator increased by 0.347M barrels instead of the expected –2.800M barrels. Similar statistics from the Energy Information Administration of the US Department of Energy (EIA) are due today. According to forecasts, reserves may decrease by 2.000M barrels, supporting oil prices.