EUR/USD

The EUR/USD pair shows a moderate decline, developing the "bearish" momentum formed the day before. The instrument is testing 1.0830 for a breakdown, while analysts await the publication of March data from Germany from the Institute for Economic Research (IFO). Forecasts suggest that the Business Optimism index will rise from 85.5 points to 86.0 points, and the Economic Expectations indicator will rise from 84.1 points to 84.7 points, while the Current Situation indicator may adjust from 86.9 points to 86.8 points. Today, investors will pay attention to the speech of the President of the German Federal Bank Joachim Nagel and the representative of the European Central Bank (ECB) Philip Lane, hoping to find out the timing of the possible launch of a program to reduce the cost of borrowing by the European regulator, the first of which could happen closer to July. The March macroeconomic statistics on business activity in the eurozone, published the day before, turned out to be ambiguous. Investors drew attention to a noticeable decline in the French Manufacturing PMI from S&P Global from 47.1 points to 45.8 points, while analysts expected 47.5 points, and the indicator in the Services sector fell from 48.4 points to 47.8 points with a forecast of 48.7 points. In turn, business activity in the German Services sector accelerated from 48.3 points to 49.8 points, which turned out to be significantly higher than expectations of 48.8 points, and in the Manufacturing sector it slowed down from 42.5 points to 41.6 points, while experts expected 43.1 points. In turn, in the United States, the business activity index from S&P Global in the Manufacturing sector corrected from 52.2 points to 52.5 points with a forecast of a decrease to 51.7 points, and in the Services sector - from 52.3 points to 51.7 points, although analysts had expected 52.0 points.

GBP/USD

The GBP/USD pair is trading lower, developing a strong downward momentum that appeared the day before amid the publication of business activity statistics and the results of the Bank of England meeting. As expected, the regulator almost unanimously decided to keep the interest rate unchanged at 5.25%. Only one board member advocated reducing the value by 25 basis points. The follow-up statement notes that inflationary pressures in the country continue to weaken, as well as a slowdown in wage growth. At the same time, the Consumer Price Index still remains significantly above the regulator’s target levels, which creates additional risks for the economy if there is a too rapid transition to reducing borrowing costs. The Bank of England's forecasts remained at the same level: in the second quarter of this year the indicator is expected to decline slightly below 2.0%, after which moderate growth is not excluded. The next meeting of the regulator is expected on May 9, at the same time, updated macroeconomic forecasts will be published. Statistics on business activity in the UK turned out to be mixed: the index of business activity in the services sector from S&P Global in March fell from 53.8 points to 53.4 points, while analysts expected neutral dynamics, and the indicator in the manufacturing sector showed a sharp increase from 47.5 points to 49.9 points with a forecast of 47.8 points. The focus of investors today is the February statistics on the dynamics of Retail Sales: on a monthly basis, the indicator showed zero dynamics after growing by 3.6% in the previous month, which turned out to be better than expectations at the level of -0.3%, and on an annual basis it decreased by 0.4% after an increase of 0.5%, while experts expected -0.7%. In addition, US Federal Reserve Chairman Jerome Powell and US Federal Reserve Deputy Chairman for Supervision Michael Barr will speak today.

AUD/USD

The AUD/USD pair is showing an active decline, retreating from the local highs of March 13, updated the day before: during the Asian session, quotes are testing 0.6525 for a breakdown, while the US dollar is rapidly recovering weekly losses. The growth of the exchange rate is supported by investor interest in risky assets against the backdrop of maintaining a high level of interest rates along with fairly strong macroeconomic indicators. Earlier, analysts slightly adjusted their expectations regarding the possibility of reducing the cost of borrowing by the US Federal Reserve in June. Now the probability of such a scenario is estimated at approximately 50.0%, and may decrease if the rate of slowdown in price growth is insufficient. Statistics on business activity in the US, published the day before, also provided minor support to the national currency. The Manufacturing PMI from S&P Global in March rose from 52.2 points to 52.5 points, while analysts expected 51.7 points, and the Services PMI decreased from 52.3 points to 51.7 points, with a forecast of 52.0 points. In turn, the Australian dollar received support the day before, reacting to the publication of a report on the labor market. The Employment Change in February showed a record increase of 116.5 thousand jobs, while experts expected 40.0 thousand, despite the fact that in January the figure was revised from 0.5 thousand to 15.3 thousand. The Unemployment Rate fell sharply from 4.1% to 3.7%, with preliminary estimates at 4.0%.

USD/JPY

The USD/JPY pair shows mixed dynamics, holding near 151.55. The instrument is preparing to end the next week on the market with moderate growth, which was also marked by an update to record highs. The yen received virtually no support from the Bank of Japan's historic decision to abandon its negative interest rate policy since it was priced into the market. Analysts predicted a slightly different market reaction. The Japanese currency has reached its lowest level since August 2008, which once again revives fears about direct foreign exchange interventions by financial authorities in the market. Macroeconomic statistics published the day before provided some support to the yen. Thus, the business activity index from Jibun Bank in the manufacturing sector in March increased from 47.2 points to 48.2 points, and the indicator in the services sector - from 52.9 points to 54.9 points. In turn, the indicator in the US services sector fell from 52.3 points to 51.7 points, while the market expected a decrease to 52.0 points. The focus of investors today is on inflation statistics in Japan: the National Consumer Price Index in February rose from 2.2% to 2.8%, and the Core CPI excluding Food and Energy decreased from 3.5% to 3.2%.

XAU/USD

The XAU/USD pair is showing a moderate decline, correcting after updating record highs at 2220.00 the day before. Trading participants close some of their long positions at the end of the week, which is associated with increased investor demand for risk. In turn, the US currency is strengthening amid cooling expectations regarding an imminent reduction in borrowing costs from the US Federal Reserve. A meeting of the American regulator was held this week, following which monetary policy remained unchanged. At the same time, the Fed again pointed out previous theses about the need to wait for additional evidence of a sustainable decline in inflation towards the target level of 2.0%. Officials also revised forecasts regarding the rate of interest rate reduction for the current year. Three adjustments of 25 basis points each are now expected, down from the four expected in December forecasts. Gold received some support yesterday from the Swiss National Bank's decision to cut the interest rate by 25 basis points to 1.50%. Analysts were confident that the regulator would not rush to change the vector of monetary policy; however, such a step could indicate that inflation in the region remains under control. Statistics on business activity in the US, published the day before, did not provide significant support to the dollar: the Services PMI from S&P Global in March decreased from 52.3 points to 51.7 points, with a forecast of 52.0 points, and the Manufacturing PMI strengthened from 52.2 points to 52.5 points, while analysts expected 51.7 points.