The United States of America

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

Investors focus on the comments of the head of the US Fed, Jerome Powell, who took a cautious position regarding the regulator’s further actions. Earlier, he stated that officials were almost confident that inflation would steadily approach the target level of 2.0%, but now, macroeconomic statistics indicate that it will take longer than expected for consumer price growth to slow down, and with a strong labor market there is no point in adjusting monetary policy. The regulator’s vice-chairman, Philip Jefferson, noted he hopes inflation will ease while borrowing costs remain high. These statements convinced experts that the first interest rate cut would not take place until September.

Eurozone

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

In March, the consumer price index increased from 0.6% to 0.8% MoM but decreased from 2.6% to 2.4% YoY. The core figure adjusted from 0.7% to 1.1% MoM and from 3.1% to 2.9% YoY. Overall, inflationary pressure in the European economy eases, giving investors more reason to expect that European Central Bank (ECB) officials will begin cutting interest rates in June. Most regulator representatives support this scenario, but the Bank of France Governor, Francois Villeroy de Galhau, noted that department economists might reconsider monetary policy if tensions in the Middle East intensified, causing rising energy prices and accelerating inflation.

The United Kingdom

GBP is strengthening against JPY, USD, and EUR.

The March consumer price index remained at 0.6% MoM and fell from 3.4% to 3.2% YoY, missing forecasts of 3.1%, while the core indicator remained at 0.6% MoM and decreased from 4.5% to 4.2% YoY. Inflationary pressure in the national economy is weakening, although not so fast as expected, so the likelihood of an imminent change in the Bank of England monetary policy remains. Most analysts expect that the first interest rate adjustment will take place in June or May, although representatives of the regulator are still more cautious. So, yesterday, Claire Lombardelli, who may become monetary policy deputy this summer, said it was premature to predict when this would happen.

Japan

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

In March, exports rose 7.3%, while imports fell 4.9%, bringing the trade surplus to 366.5B yen. Export figures have been increasing for the fourth month and, according to experts, this trend will continue against stable US consumption and a possible increase in supplies to China, contributing to the recovery of the Japanese economy. Meanwhile, the April Reuters Tankan business confidence index corrected from 10.0 points to 9.0 points due to the yen weakening, which makes imports more expensive, putting pressure on household consumption.

Australia

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

Due to a lack of significant economic releases, currency movements are due to external factors. Tomorrow at 03:30 (GMT 2), data from the labor market will be published. According to preliminary estimates, the March unemployment rate will increase from 3.7% to 3.9%, and total employment by 7.2K, significantly lower than 116.5K earlier. The implementation will reflect the sector’s weakness, giving the Reserve Bank of Australia (RBA) additional arguments in favor of moving towards the “dovish” course. However, most experts believe that the regulator’s economists will not take active action until the fall since the inflation rate remains significant.

Oil

Oil prices are declining: negative dynamics are developing against growing oil reserves and uncertainty regarding the further actions of the US Fed in the monetary policy.

Thus, according to a report by the American Petroleum Institute (API), oil reserves increased by 4.090M barrels. Meanwhile, the regulator’s head, Jerome Powell, said the process of fighting inflation could be longer than expected and hinted at continued high interest rates until September, which supported the American dollar against alternative assets. However, a significant drop in oil prices is hampered by reports of US intentions to impose new sanctions against Iranian exports in response to the attack on Israel. Today at 16:30 (GMT 2), data on oil inventories from the US Department of Energy’s Energy Information Administration (EIA) will be published. According to forecasts, the indicator will increase by 1.600M barrels, putting additional pressure on oil quotes.