United States of America

USD is strengthening against EUR, GBP, and JPY.

The currency has regained some of its lost ground after weakening on Friday, following the speech of US Fed Chairman Jerome Powell at the Jackson Hole Economic Symposium. The official said that it was time to adjust monetary policy since the risks of rising inflation had decreased, and pressure on the labor market had increased. He noted that the regulator would do everything possible to support the sector in the conditions of the onset of price stability. Experts took these comments as a signal for an adjustment of interest rates at the September meeting but its size remains uncertain. Most traders are confident that the regulator will start the change from –25 basis points but do not rule out the possibility of reducing the cost of borrowing by –50 basis points. Today, the July data on durable goods orders was published. The indicator increased by 9.9% MoM, exceeding the forecast of 4.0% but the core value decreased by 0.2%.

Eurozone

EUR weakens against JPY, GBP, and USD.

The August German business climate index from the Institute for Economic Research (IFO) decreased from 87.0 points to 86.6 points, below the forecast of 86.0 points, demonstrating negative dynamics for the third month. The indicator of the current economic situation adjusted from 87.1 points to 86.5 points, and business expectations – from 87.0 points to 86.8 points. Commenting on these data, IFO President Clemens Fuest said that the country’s economy is increasingly plunging into crisis, and the agency’s economist Klaus Wohlrabe noted that stagnation is developing against poor investment and a lack of orders in key sectors. Meanwhile, on Saturday, the European Central Bank’s (ECB) chief economist, Philip Lane, said the regulator had made good progress in reducing inflation to the 2.0% target but success in combating rising prices was not yet guaranteed, so maintaining tight monetary policy was necessary.

United Kingdom

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

Today is a holiday in the UK, so financial institutions are closed, and investor activity is reduced. On Friday, Bank of England Governor Andrew Bailey said at the Jackson Hole Economic Symposium that long-term inflation pressures in the national economy are easing, but there is no rush to cut interest rates further, as the risks of accelerating inflation remain. Bailey also expressed hope that the costs of a prolonged “hawkish” stance, such as lower output and higher unemployment, would not weigh too heavily on the UK economy, and that it would be able to make a soft landing.

Japan

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

On Friday, Bank of Japan Governor Kazuo Ueda reiterated his determination to raise interest rates if inflation remains high and reaches the 2.0% target on a sustained basis. However, he said that short-term rates in the Japanese economy are currently low, but they will rise if the economy recovers. However, there is a lot of uncertainty about where borrowing costs might ultimately go. Experts say the regulator will tighten monetary policy at least once more before the end of the year.

Australia

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

Investors are awaiting the publication of July data on retail sales. According to preliminary estimates, the indicator will increase from 0.1% to 0.5%. The implementation of forecasts will increase the risks of long-term inflation remaining above the target range of the Reserve Bank of Australia (RBA). As a result, the regulator’s officials may return to tightening monetary policy, the possibility of announced by the head of the department Michelle Bullock previously.

Oil

Support for the quotes is provided by the expectation of an imminent reduction in interest rates by the US Fed, as well as a new aggravation of the situation in the Middle East.

Thus, on Friday at the Economic Symposium in Jackson Hole, the head of the American regulator, Jerome Powell, announced the need to ease monetary policy to prevent further cooling of the labor market, against which the dollar found itself under significant pressure against alternative assets. At the same time, over the weekend, Israel and the Lebanese paramilitary organization Hezbollah exchanged massive rocket attacks, which caused experts to fear a further escalation of the conflict and increased risks of oil supply disruptions from the region.