EUR/USD

The EUR/USD pair is showing weak growth, correcting after a sharp decline in the instrument at the end of last week, when it updated local lows from March 1. At the same time, the European currency received some support from macroeconomic data from Germany: the Business Climate index from the Institute for Economic Research (IFO) rose from 85.7 points to 87.8 points in March, while analysts expected 86.0 points; the indicator of Economic Expectations strengthened from 84.4 points to 87.5 points, also ahead of forecasts of 84.7 points, and the Current Assessment indicator went up from 86.9 points to 88.1 points, which was higher than expectations at 86.8 points. The US dollar is recovering amid weakening expectations of a possible reduction in borrowing costs in the near future. The focus of investors today is the February statistics on New Home Sales in the US, forecasts for which suggest an acceleration of dynamics from 0.661 million to 0.680 million ( 1.5%). Also, during the day, Chicago Fed National Activity Index will be published and a speech will be given by the representative of the US Federal Reserve, Raphael Bostic.

GBP/USD

The GBP/USD pair is testing 1.2600 for a breakout: the instrument is recovering its losses from the end of last week, but activity in the market remains low. Trading participants are analyzing the results of the meetings of the US Federal Reserve and the Bank of England, during which the interest rate was kept unchanged, still hoping that the American regulator may decide to lower the cost of borrowing for the first time around June, while the British one may move on to similar actions only by August or even later. Macroeconomic statistics from the UK exerted additional pressure on the pound last Friday. Retail Sales volumes in February showed zero dynamics in monthly terms after growing by 3.6% in the previous month, while analysts expected 0.3%; in annual terms, the figure decreased by 0.4% after increasing by 0.5% with the forecast at -0.7%, and Retail Sales excluding Fuel added 0.2% after 3.4% in January. The Consumer Confidence Index from the Gfk Group analytical portal remained at -21.0 points in March, contrary to expectations at -19.0 points. On Thursday, March 28, final UK Gross Domestic Product (GDP) statistics for the fourth quarter of 2023 will be published. The current estimate suggests that the national economy will lose 0.3% in quarterly terms and 0.2% in annual terms.

AUD/USD

The AUD/USD pair is showing quite active growth, recovering from a decline at the end of last week and testing 0.6530 for a breakout. The instrument is supported by technical factors, while investors continue to evaluate the results of the meetings of a number of global central banks, which took place last week. The US Federal Reserve and the Reserve Bank of Australia (RBA) kept interest rates at 5.50% and 4.35%, respectively. Both regulators say they are in no hurry to reduce borrowing costs due to the persistence of high inflation risks, which, however, are weakening over time. Australian policy rhetoric no longer includes the possibility of further increases, while US officials have indicated they are open to a slight easing of monetary policy, but without any specific timing. It is expected that the interest rate may be adjusted in June, but today the probability of such a scenario is estimated at only 50.0%. The instrument was significantly supported by a strong report on the Australian labor market, published on Thursday, March 21. The Unemployment Rate in February dropped from 4.1% to 3.7%, which was significantly lower than market expectations of 4.0%, and the Employment Change added 116.5 thousand after 15.3 thousand in the previous month, while analysts expected 40.0 thousand. Investors also paid attention to the increase in the Australian Services PMI from the Commonwealth Bank from 53.1 points to 53.5 points. In the US, the Manufacturing PMI increased from 52.2 points to 52.5 points in March, and the Services PMI decreased from 52.3 points to 51.7 points, while the market expected 52.0 points.

USD/JPY

The USD/JPY pair shows mixed dynamics, holding near 151.30. Quotes are consolidating around the local highs of November 2023, updated at the end of last week, when the US currency received support from weakening expectations regarding a possible reduction in the cost of borrowing by the US Federal Reserve in the near future. Investors also paid attention to the growth of Manufacturing PMI from S&P Global from 52.2 points to 52.5 points, while analysts expected 51.7 points. The yen, in turn, remained under pressure after the Bank of Japan's historic decision to abandon its negative interest rate policy. At the same time, the Bank’s rhetoric remained rather soft, and the markets do not expect the trend toward an increase in the rate to develop in the near future. In turn, statistics could not act as a driver for strengthening the position of the national currency: the Consumer Price Index in February rose from 2.2% to 2.8%, and the CPI excluding Food and Energy decreased from 3.5% to 3.2%. On Friday, March 29, consumer inflation data in the Tokyo region for March will be published, as well as February statistics on retail sales and industrial production. Forecasts suggest an increase in Retail Sales from 2.3% to 3.0%.

XAU/USD

The XAU/USD pair is showing weak growth, recovering from a rather sharp decline in the instrument at the end of last week, which ultimately did not allow the "bulls" to consolidate at new record highs at 2220.00. The development of "bearish" dynamics was facilitated by technical factors, as well as the strengthening of the position of the US currency amid weakening expectations regarding an imminent reduction in borrowing costs from the US Federal Reserve. It is also worth noting that the US currency received support after the decision of the Swiss National Bank to reduce the interest rate by 25 basis points. Trading participants react to data on business activity in the United States: the S&P Global Manufacturing PMI in March increased from 52.2 points to 52.5 points, while analysts expected a decrease to 51.7 points, and the Services PMI decreased from 52.3 points to 51.7 points, worse than market forecasts of 52.0 points. Initial Jobless Claims for the week ended March 15 decreased from 212.0 thousand to 210.0 thousand, contrary to forecasts of an increase to 215.0 thousand.