United States of America

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

Investors remain focused on yesterday's speech in Congress by US Federal Reserve Chairman Jerome Powell, who confirmed that it would be advisable to begin lowering the key rate later this year and only if officials receive new evidence of a stable decline in inflation towards the target level of 2.0%. In the meantime, according to Powell, further progress in slowing consumer price growth is not at all guaranteed. The official also said that the American economy is currently free from the risks of recession, so investors remain confident that monetary easing will begin very soon. Today, the head of the regulator is scheduled to speak again in Congress, but it is likely that his theses will remain the same and will not cause a significant market reaction. It is also worth noting the yesterday publication of the US Federal Reserve’s “Beige Book” economic report, according to which stable or growing business activity was recorded in 11 out of 12 financial districts, which makes officials’ caution justified, since the risks of accelerating inflation remain. In this regard, it is worth noting the comments of the President of the Federal Reserve Bank (FRB) of Minneapolis, Neel Kashkari, who said that strong economic growth could limit the number of adjustments to borrowing costs this year to two or even one.

Eurozone

EUR is weakening against its main competitors – JPY, GBP, and USD.

Investors are focused on the results of today's meeting of the European Central Bank (ECB), at which the regulator did not adjust monetary policy and left interest rates at the same levels: key at 4.50%, deposit at 4.00%, and margin at 4 .75%. However, the forecasts were lowered, which put significant pressure on the euro: experts now believe that the Eurozone economy will grow by only 0.6% this year, falling short of preliminary estimates of 0.8%, and inflation during the year could reach 2.3% instead of 2.7%. Also today, the market follows a press conference from ECB head Christine Lagarde, who will comment on the officials' decisions and may hint at further actions by the regulator.

United Kingdom

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

Today, February data on the house price index from the country's largest mortgage lender Halifax Bank of Scotland (HBOS) was published: MoM, the indicator adjusted from 1.2% to 0.4% with preliminary estimates of 0.8%, and YoY – from 2.3% to 1.7%. Thus, prices have risen for four months in a row, although at a slower pace than forecast. Company experts hope that lower mortgage rates and the expectation of imminent easing of monetary policy by the Bank of England will restore consumer confidence and lead to a recovery in the construction sector.

Japan

JPY is strengthening against its main competitors – EUR, GBP, and USD.

The uptrend is being facilitated by growing sentiment that the Bank of Japan may begin raising interest rates at its meeting this month after all, prompted by comments from BoJ board member Junko Nakagawa that the economy is on track to sustainably reach its 2.0% inflation target. The remarks came a day after Jiji news agency reported that at least one of the BoJ's nine board members was likely to favor ending negative interest rates at its next meeting. However, experts remain cautious, believing that officials will not begin cutting stimulus before the economy emerges from recession.

Australia

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

Today, January foreign trade data was published, which turned out to be positive: exports increased by 1.6% after the December value of 1.5%, and imports by 1.3% compared to 4.0% in the previous month, allowing the country's trade surplus to reach 11.027 billion Australian dollars. Positive dynamics in export indicators contributes to the strengthening of the national economy, without excluding the risks of accelerating inflation rates and the Reserve Bank of Australia (RBA) maintaining interest rates at peak values for a longer period.

Oil

Oil prices today had ambiguous dynamics. Prices are supported by strong data on Chinese foreign trade, but significant growth is hampered by the uncertainty of the future policy of the US Federal Reserve.

In February, Chinese goods exports added 7.1%, well above the 1.9% increase expected, and volume rose 3.5% against expectations of 1.5%, with China's crude oil imports in the first two months of 2024 increased by 5.1% compared to the same period last year. At the same time, investors are wary of the caution of American officials, who are postponing the start of monetary policy easing and are not giving any comments on its timing. It is also worth noting the yesterday publication of a report on petroleum product inventories from the US Energy Information Administration (EIA), which turned out to be ambiguous: the document recorded an increase in oil inventories by 1.367 million barrels, while gasoline inventories decreased by 4.460 million barrels, and distillate inventories – by 4.131 million barrels.