United States of America

USD is strengthening against EUR, GBP and JPY.

Neel Kashkari, head of the Federal Reserve Bank of Minneapolis, speaking on CBS Broadcasting Inc., expressed his point of view regarding the economic consequences of the implementation of the election promises of President-elect Donald Trump: that the deportation of illegal immigrants from the country could lead to the national business losing some of its employees but additional tariffs on imports do not cause concern for the official since although they can act as a driver of one-time price growth, they will not affect long-term inflation trends. Kashkari also noted that at the December meeting of the US Fed, an adjustment of the interest rate by –25 basis points may follow but to make this decision, the regulator needs to assess the current economic situation.

Eurozone

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

The currency is under pressure from the increasing likelihood of introducing significant duties on European goods imported to the United States: thus, the media reported yesterday that US President-elect Donald Trump intends to recruit Robert Lighthizer, known for his “hawkish” views on foreign trade, to his team, and experts believe that in this case economic conflicts will not be avoided. Meanwhile, European Central Bank (ECB) Board Member Robert Holzmann said that given the current state of affairs in the Eurozone, the regulator has no reason to refuse to adjust the interest rate in December, but the decision will be made based on incoming macroeconomic data.

The United Kingdom

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

On Tuesday at 09:00 (GMT 2), September labor market data is due: employment may fall by 50.0K after growing by 373.0K the previous month, unemployment will increase from 4.0% to 4.1%, and average wages including bonuses will increase from 3.8% to 3.9%, which will confirm further cooling of the sector, while significant inflation risks will remain since wage indexation will still exceed the Bank of England’s inflation target of 2.0%, and in these conditions the probability that the interest rate will remain unchanged at the December meeting of the regulator will increase significantly.

Japan

JPY weakens against EUR, GBP, and USD.

A summary of BOJ policymakers’ views released today showed a divided view on the timing of monetary policy tightening, with many stressing the need to focus on the economic impact of recent yen movements, which will be key to determining the timing of the next adjustment to borrowing costs, and some citing the need for caution due to the uncertain inflation situation in the United States, where consumer price growth is likely to accelerate again due to President-elect Donald Trump’s plans to cut taxes and increase tariffs. However, most BOJ policymakers are leaning toward raising interest rates once the market stabilizes.

Australia

AUD is weakening against the greenback but is strengthening against EUR, JPY, and GBP.

Australia’s Treasurer Jim Chalmers said the country faces the risk of short-term economic pain from output cuts and rising inflationary pressures if US President-elect Donald Trump’s campaign promises are fulfilled but he said Australia is well prepared to weather a global trade crisis and could weather it less harshly than other countries.

Oil

Oil prices are slipping as Hurricane Rafael weakens, with more than 25.0% of Gulf of Mexico crude and 6.0% of gas production capacity still offline at the weekend but Shell Plc. and Chevron Corp. have announced that crews are returning to drilling platforms, indicating that production consolidates to resume soon.

Prices are also negatively affected by new measures by the Chinese government, which have disappointed the market: last Friday, at a meeting of the Standing Committee of the National People’s Congress, plans were announced to support the national economy, which, however, did not include direct fiscal stimulus and currency interventions, which increases the risks of a decrease in demand for black gold from the leading importer. Experts suggest that the country’s authorities are taking a cautious position in anticipation of the first steps of the new American administration.