The United States of America

USD is strengthening against EUR, JPY, and GBP.

Investors are focused on comments from leading US Fed policymakers regarding their future actions. Thus, yesterday, the head of the Federal Reserve Bank (FRB) of Chicago, Austan Goolsbee, said that the rate of decline in inflation stalled significantly, and against a strong labor market, this makes further maintaining the “hawkish” monetary policy appropriate. The official noted that rising consumer prices and the stability of the labor market might be a sign of economic overheating, and did not rule out a new increase in borrowing costs if necessary. According to the department’s report, the main barriers to financial stability are persistent inflation, the long-term persistence of high interest rates, as well as the risks of geopolitical aggravation and uncertainty associated with the presidential elections in the country.

Eurozone

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

The head of the European Central Bank (ECB), Christine Lagarde, said that inflation in the region will likely continue to decline, and if it is stable enough to bring consumer prices to the target level of 2.0%, the regulator will be able to ease monetary policy. So far, the situation in the European economy remains difficult, so officials will probably not make specific commitments on the number and scope of reductions in borrowing costs. Most experts expect ECB economists to move to the “dovish” policy in June.

The United Kingdom

GBP is weakening against EUR, JPY, and USD.

In April, the housing price index from the research company Rightmove Group Ltd. increased by 1.1% MoM against 1.5% earlier and by 1.7% YoY, exceeding 0.8% in March. Positive dynamics have been observed since the beginning of the year, which allows analysts to hope for a recovery in the construction sector. In addition, company experts note an increase in the number of sellers in the housing sector by 12.0% and sales volumes by 13.9% compared to the same period last year. Yesterday, Deputy Governor of the Bank of England Dave Ramsden said that the risks of inflation stabilizing at high levels had noticeably decreased, and soon, the figure would reach the target of 2.0%, where it would remain until the end of the year.

Japan

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

Due to a lack of significant economic releases, currency movements are due to external factors. The Bank of Japan meeting is due on Friday. According to preliminary estimates, regulator officials will leave the interest rate at 0.10% and confirm the forecasts for inflation growth in the country above 2.0% for the next three years, confirming the likelihood of monetary policy tightening in the medium term. Experts believe that the accompanying statements by the head of the Bank of Japan, Kazuo Ueda, will be cautious. He may confirm the need to exclude premature decisions to increase borrowing costs and call for proceeding from the available macroeconomic data. Tomorrow, investors will pay attention to preliminary April data on the manufacturing PMI, which could decline from 48.2 points to 48.0 points, putting short-term pressure on the yen.

Australia

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

Due to a lack of significant economic releases, the movement of the quotes is due to external factors. On Tuesday, preliminary data on business activity is due. The April manufacturing PMI may increase from 47.3 points to 47.9 points, and the services PMI decrease from 54.4 to 54.0 points. As before, the weakening of industry is compensated by the strengthening of the service sector, increasing the risk of continued high inflation. The implementation of forecasts will increase the likelihood of postponing the start of monetary easing, supporting the national currency.

Oil

Oil prices are trying to decline.

The market is under pressure amid easing tensions in the Middle East. Note that on Friday, prices rose after an Israeli attack on an air base near the Iranian city of Isfahan. However, the Islamic Republic authorities announced minor damage and the absence of plans for a response, after which oil prices began to correct. In addition, the likelihood of the US Fed maintaining interest rates at high levels for a long time hurts the asset. On Friday, the US March data on the core price index of personal consumption expenditures will be published, and experts fear that its growth will exceed forecasts, so the regulator officials will postpone the monetary policy adjustment to the fall.