United States of America

USD is moderately strengthening against GBP and JPY but is showing ambiguous dynamics in pair with EUR.

Today, investors are focused on comments from US Federal Reserve officials and tax reform proposals from presidential candidate Donald Trump. Yesterday, the politician put forward an idea that could provide full or partial exemption from income tax for 93.2 million Americans, proposed to stop taxing tips, as well as cancel Social Security benefits and overtime pay. Earlier, he also promised to introduce benefits for police officers, firefighters, military personnel, and veterans. Experts fear that the implementation of these plans will significantly reduce the inflow of money into the treasury, but Trump's campaigners are confident that the lack of funds will be compensated by revenues from the implementation of a tough foreign trade policy. On Monday, four US Federal Reserve officials commented on the current economic situation, approving a further reduction in interest rates. Kansas City Fed President Jeffrey Schmid, Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari advocated caution in further easing of monetary policy, citing the strength of the economy and the uncertainty of its further development. San Francisco Fed President Mary Daly, on the contrary, stated that the key rate is currently too high, so even significant economic growth should not keep the regulator from adjusting it. It should be noted that most experts currently expect two more reductions in borrowing costs by the end of the year, by 25 basis points each.

Eurozone

EUR is strengthening moderately against GBP and JPY but has ambiguous dynamics in pair with USD.

In the absence of significant economic releases, the euro's movement is driven by external factors. It is worth noting the comments of the head of the Bank of Spain and the European Central Bank (ECB) board member Jose Luis Escriva, who in an interview with the newspaper Expansion noted that inflation in the Eurozone will probably not be able to change enough to affect the regulator's main scenario regarding further interest rate cuts. The official also declined to say whether borrowing costs will be reduced again in December, noting that the decision will be made based on economic data.

United Kingdom

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

Government borrowing figures for the past six months were released today and were above the official forecasts, rising by 16.6 billion pounds in September instead of the 15.1 billion pounds expected, taking the total to 79.6 billion pounds, 7 billion pounds more than the Office for Budget Responsibility had expected. The figures highlight the need for tax increases in the new budget to fund government programs, which could hurt business revenues. Also worth noting are comments from Bank of England (BoE) Monetary Policy Committee member Megan Greene, who said yesterday that the regulator should remain cautious about cutting interest rates as consumption growth could be both higher and lower than expected.

Japan

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

In the absence of significant economic releases, the yen's movement is due to external factors. It is worth noting the publication of new forecasts from the International Monetary Fund (IMF), according to which Japan's economic growth, after increasing by 1.7% last year, will slow to 0.3% this year, compared to previous expectations of 0.4%. The decline in indicators is due to problems with supplies in the automobile industry and a reduction in the positive economic effect from a significant influx of tourists into the country after the lifting of coronavirus restrictions. Nevertheless, in 2025, the Japanese economy may strengthen by 1.1% due to an increase in private consumption against the background of an acceleration in the growth rate of real wages.

Australia

AUD is strengthening against its main competitors – JPY, USD, EUR, and GBP.

Investors are preparing for the publication of preliminary business activity data on Thursday: the Manufacturing PMI is expected to fall from 46.7 points to 46.4 points, while the Services PMI may rise from 50.5 points to 51.0 points. Thus, the situation in the country's economy will remain the same: manufacturing is slowing, but overall growth is supported by a strong services sector. The fulfillment of forecasts will reduce the likelihood of the Reserve Bank of Australia (RBA) starting to cut interest rates this year.

Oil

Oil prices continue their uptrend today amid investor hopes that the Chinese government's stimulus measures will help revive the economy of the world's leading oil importer and ensure further growth in demand.

Yesterday, the People's Bank of China reduced its base lending rates from 3.35% to 3.10%. However, the significant growth of oil prices is being held back by the stabilization of the situation in the Middle East and the publication of weak forecasts by the International Monetary Fund (IMF), whose experts today reduced their forecast for China's economic growth this year from 5.0% to 4.8%. During the day, investors are also awaiting the publication of weekly data on reserves from the American Petroleum Institute (API): the figure may grow by 0.700 million barrels. In this case, prices will again come under pressure.