The United States of America

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

Investors are focusing on statements by the US Fed officials after the publication of March inflation data. Yesterday, the Federal Reserve Bank (FRB) of New York head, John Williams, noted that there was no need to adjust monetary policy soon. Boston Fed President Susan Collins believes it would take more time than predicted to ensure sustainable weakening inflation. In her opinion, demand may decline throughout the year, slowing the consumer price growth and allowing the department to move to the “dovish” course. Finally, Richmond Fed Chairman Thomas Barkin said inflation data did not increase his confidence that price pressures would subside. Comments from regulator representatives are very cautious, increasing the possibility of the monetary easing delay until the autumn.

Eurozone

EUR is falling against JPY, GBP, and USD.

At the latest meeting, European Central Bank (ECB) officials kept interest rates unchanged (key rate 4.50%, margin rate 4.75%, and deposit rate 4.00%). They said an adjustment in monetary policy would be appropriate if new data on the consumer price index were positive. At the following press conference, the head of the regulator, Christine Lagarde, noted that the causes of American and European inflation are different, so the agency will not follow the US Fed decisions but only the incoming macroeconomic data. These comments strengthened investors’ confidence in the possibility of the first reduction in borrowing costs as early as June. In addition, the March German consumer price index adjusted from 2.5% to 2.2% YoY, and the harmonized index from 2.7% to 2.3%, confirming a further weakening of inflation pressure.

The United Kingdom

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

In February, gross domestic product (GDP) increased by 0.1% MoM, meeting expert expectations, and decreased by 0.2% YoY, less than the expected decline of 0.4%. The national economy has been strengthening for the second month, which allows investors to hope for its exit from recession in the first quarter. In February, industrial output adjusted by 1.1% and 1.4% against forecasts of 0.6% MoM and YoY, respectively, and the trade deficit narrowed to 14.21B pounds.

Japan

JPY is strengthening against EUR, GBP, and USD.

In February, industrial production adjusted by –0.6% MoM instead of the expected –0.1% and by –3.9% compared to forecasts of –3.4%. According to the Bank of Japan’s survey of household inflation expectations conducted between January and March, 83.3% of respondents expect price growth to accelerate over the next twelve months, up from 79.3%. Meanwhile, Finance Minister Shunichi Suzuki again warned the market that the government was carefully analyzing the factors contributing to the weakening of the national currency and could take measures to stabilize its exchange rate but investors showed little reaction to these statements.

Australia

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

Due to a lack of significant economic releases, currency movements are due to external factors. It is worth noting the publication of poor March foreign trade data from China, the country’s leading trading partner: exports adjusted by –7.5% instead of the expected –3.0%, and imports by –1.9% compared to forecasts of 1.2%, reflecting continued pressure on the Chinese economy, also it may lead to a decrease in trade turnover. Meanwhile, iron ore imports from Australia to China increased by 0.5% in March due to expectations of a recovery in steel production after the Eastern New Year celebrations.

Oil

Oil prices are actively growing.

The quotes resumed positive dynamics amid increasing geopolitical tensions: according to reports from representatives of the American authorities, Iran may attack Israeli targets, including on the territory of Israel, over the next few days, which will lead to risks of oil supply interruptions. However, officials expressed confidence that a large-scale Iranian-Israeli clash would not happen. Meanwhile, today, analysts from the International Energy Agency (IEA) lowered their forecast for global energy demand growth this year to 1.2M barrels per day but the negative impact of these data on the market was limited.