EUR/USD

The EUR/USD pair is again showing moderate growth, developing a strong "bullish" trend of recent days, as a result of which all-time highs from February 25 last year were updated. The instrument is testing the level of 1.1250 for a breakout, reacting to the expectations of the completion of the "hawkish" cycle of the US Federal Reserve's monetary policy. Analysts are convinced in another 25 basis points increase in interest rates next week, after which the regulator is likely to take a wait-and-see attitude and refuse to further tighten monetary conditions until the end of the year. It is assumed that at the beginning of 2024, the Fed may return to adjusting the cost of borrowing as inflation decreases, which is already quite close to the target levels of the US Federal Reserve. The meeting of the European Central Bank (ECB) is also expected next week, the result of which may also be an increase in the value by 25 basis points; however, analysts are counting on at least one more increase before the end of this year, given the rather high inflation, which remains in many economies in the region. The euro was pressured by the publication of a report from the Bundesbank, which indicated that the national economy could shrink by more than 0.3% this year, despite an attempt to grow in the second quarter. Among the reasons for a possible slowdown in indicators, they noted a decrease in global demand for industrial goods, a significant increase in the cost of borrowing against the backdrop of rising interest rates, as well as a possible correction in prices for raw materials, including oil.

GBP/USD

The GBP/USD pair is showing modest gains, recovering from a two-day decline that allowed the instrument to retreat from the record highs of April 2022. The negative dynamics at the end of the last week was facilitated by technical factors, while the fundamental picture on the market remains virtually unchanged. Markets continue to believe that the US Federal Reserve will soon complete the tightening cycle of monetary policy, depriving the dollar of one of the main drivers of growth. Nevertheless, the positions of the US currency are still quite strong, in addition, experts warn against premature expectations of easing monetary conditions, since interest rate cuts should not be expected before 2024. Some pressure on the pound was exerted yesterday by the data from the research company Rightmove Group Ltd., in monthly terms, the House Price Index fell by 0.2% after the zero dynamics of June, and in annual terms it slowed down from 1.1% to 0.5%. The focus of the market today is statistics on Industrial Production in the US, while on Wednesday, June data on inflation will be published in the UK. Current forecasts suggest a reduction in the annual Consumer Price Index from 8.7% to 8.2%, and in the monthly terms it may go down from 0.7% to 0.4%.

AUD/USD

The AUD/USD pair shows an uncertain growth, testing 0.6830 for a breakout and receiving support from the weakening positions of the US currency. Markets are looking forward to the US Federal Reserve meeting next week, following which the interest rate could be increased by 25 basis points once again. At the same time, more than half of analysts are sure that this will be the last adjustment in the current cycle, and after a pause, which may drag on until the end of this year, the regulator is likely to move to reduce the cost of borrowing. Some pressure on the position of the instrument yesterday was exerted by statistics from China: Gross Domestic Product (GDP) in the second quarter slowed down from 2.2% to 0.8%, which turned out to be slightly better than analysts' forecasts at the level of 0.5%, and in annual terms it rose from 4.5% to 6.3%, while the volume of Retail Sales in June adjusted from 12.7% to 3.1% with preliminary estimates of 3.2%.

USD/JPY

The USD/JPY pair returned to the decline, interrupting unsuccessful attempts at corrective growth at the end of last week, when the US currency showed an upward trend caused by profit taking on short positions. At the moment, investors are once again discussing the prospects for the completion of the current cycle of tightening monetary policy by the US Federal Reserve, which puts significant pressure on the position of the US currency. At the same time, analysts are confident in the interest rate adjustment by 25 basis points next week. In turn, the Bank of Japan continues to maintain a negative rate, each time emphasizing that the time for tightening monetary policy has not yet come. The risks of possible foreign exchange interventions are almost leveled, as the yen managed to move away from the highs around 145.00, while moderate pressure on the currency positions remains as macroeconomic statistics are published last week: for example, Industrial Production fell by 2.2% in May after -1.6% in the previous month, and in annual terms it went from 4.7% to 4.2%, while the Capacity Utilization decreased by 6.3%.

XAU/USD

The XAU/USD pair is showing moderate growth, holding near 1960.00 and local highs from June 16. Quotes resumed moderate growth after an unsuccessful attempt at a corrective decline at the end of last week, which was largely due to only technical factors. At the moment, markets are evaluating the prospects for the end of the US Federal Reserve tightening cycle with a possible interest rate cut as early as 2024. At the same time, it is worth recalling that investors expect an adjustment of the rate by 25 basis points to 5.50% at the July meeting. So far, the focus of traders is on macroeconomic statistics on consumer inflation, which will be released tomorrow: forecasts suggest that the indicator for the eurozone will remain at the same level of 5.5% YoY and 0.3% MoM, while the UK data may record a decline from 8.7% to 8.2% in annual terms and from 0.7% to 0.4% in monthly terms.