The United States of America

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

The preliminary industrial PMI sector in March increased from 52.2 points to 52.5 points instead of the expected decrease to 51.8 points, the service PMI decreased from 52.3 points to 51.7 points, exceeding forecasts of 52.0 points, and the composite PMI – from 52.5 points to 52.2 points, justifying the calculations and giving investors some confidence in a “soft landing” of the economy against a stable labor market and easing inflationary pressure. Next week, traders will pay attention to Q4 gross domestic product (GDP) data, which is expected to grow by 3.2%, and the core price index of private consumption expenditures in February, the positive dynamics of which may convince US Fed officials to postpone the reduction interest rates from June.

Eurozone

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

The German business climate index from the Institute for Economic Research (IFO) rose from 85.7 points to 87.8 points, exceeding the expected 85.9 points, the indicator of current economic conditions – from 86.9 points to 88.1 points instead of the predicted decrease to 86.8 points, and the indicator of business expectations – from 84.4 points to 87.5 points against the calculations of 84.7 points. Experts hope that improving business sentiment will help the German economy recover, although risks of a deepening recession will remain in the second half of the year. Deutsche Bundesbank President Joachim Nagel said European Central Bank (ECB) officials could begin adjusting monetary policy in June as inflation returns to the 2.0% target but the risks of a major rise in wages and a new acceleration in consumer prices remain.

The United Kingdom

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

In February, retail sales amounted to 0.0% MoM and decreased by 0.4% YoY instead of the predicted decline of 0.7%, which experts see as another sign of the British economy emerging from the recession that began at the end of last year. Consumer spending is expected to continue to rise as inflation weakens, and the Bank of England is likely to adjust interest rates soon. However, regulator officials may delay monetary easing if consumer prices rise again. According to research from the Confederation of British Industry (CBI), manufacturers are increasing their expectations for selling prices for the third month as disruptions in Red Sea shipping damage supply chains causing oil prices to rise. However, the organization’s experts note that national businesses expect economic conditions to improve in the next quarter.

Japan

JPY is strengthening against EUR, GBP, and USD.

In February, the nationwide consumer price index rose from 2.2% to 2.4% YoY, and the benchmark rose from 2.0% to 2.8%, approaching the Bank of Japan’s price level of 2.0%. In this regard, it is worth noting the results of a survey of leading economists on the subject of further actions of the Japanese regulator, published by Reuters: more than half of respondents expect that during the year, officials will increase borrowing costs by 25 basis points at least once more. Today, the head of the department, Kazuo Ueda, spoke about plans to reduce bond purchases, which, in turn, will allow the market to influence the setting of long-term interest rates, which investors regarded as confirmation of the course toward normalizing monetary policy.

Australia

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

Due to a lack of significant economic releases, currency movements are determined by external factors. Next week, investors expect the publication of data on the Westpac consumer sentiment index, which in March could fall from 6.2% to –1.6%, and February data on the weighted average consumer price index: according to preliminary estimates, the February indicator will increase from 3.4% to 3.6%. If consumer sentiment worsens and inflation resumes, officials of the Reserve Bank of Australia (RBA) will be able to keep interest rates high and the position of the national currency strengthened.

Oil

The morning decline in oil prices gave way to growth.

The sector has stabilized amid expectations of a truce between Israel and the Palestinian Hamas movement: yesterday, US Secretary of State, Antony Blinken, said that negotiations between the parties, which are currently taking place in Qatar, may well be crowned with success. Experts believe that the ceasefire could also encourage Yemen’s Houthis to stop attacks on ships in the Red Sea, in which case oil prices would resume their downward correction.