United States of America

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

Investors are focused on comments from US Federal Reserve officials about the current economic situation and the regulator's further steps in the field of monetary policy. The head of the Richmond Federal Reserve Bank (FRB), Thomas Barkin, said yesterday that to defeat the inflation, a serious reduction in demand is necessary, however, the current interest rate level of 5.50% is enough to bring the consumer price index to target level of 2.0%. This comment was interpreted by experts as confirmation of the regulator’s refusal to tighten monetary policy. New York FRB President John Williams confirmed that the US Fed’s next step will be to reduce borrowing costs, but did not give specific dates, noting only that he expects US gross domestic product (GDP) to grow by 2.0–2.5 this year %.

Eurozone

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

According to data presented today, the volume of exports of German goods increased by 0.9%, significantly exceeding preliminary estimates of 0.4%: shipments to China (by 3.7%) and to the USA (by 3.6%) adjusted most noticeably. At the same time, the volume of imports into the country increased by 0.3% instead of the predicted -1.0%, allowing the trade surplus to be brought to 22.3 billion euros. However, March statistics on industrial orders turned out to be negative: they decreased by 0.4% against preliminary estimates of growth by 0.4%. Thus, the indicator fell for the second month in a row, confirming a slower economic recovery in Germany than expected. In turn, retail sales in the Eurozone increased by 0.8% in March and by 0.7% YoY.

United Kingdom

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

Economic statistics for April were published today, including data on the Construction PMI, the housing price index from the country's largest mortgage lender Halifax Bank of Scotland (HBOS), as well as the retail sales indicator from the British Retail Consortium (BRC). Business activity in the construction sector is recovering: the index corrected from 50.2 points to 53.0 points against expectations of 50.4 points, as developers hope that the Bank of England will soon move to ease monetary policy. The HBOS housing price index increased by 0.1% MoM, being lower than the predicted 0.2%, and by 1.1% YoY. Home prices are close to stabilizing as investors anticipate interest rate cuts, which should provide significant support to the construction sector. April data on retail sales from the BRC turned out to be negative: the volume of retail trade decreased by 4.4% against preliminary estimates of 1.6%. Thus, households continue to rein in spending, which could lead to a slowdown in economic growth.

Japan

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

Today, data on the services PMI for April was published: the figure increased from 54.1 points to 54.3 points but was lower than the forecast of 54.6 points. However, non-manufacturing activity is strongly recovering thanks to stable consumer demand, while prices for services are also rising, supporting inflation and giving the Bank of Japan additional arguments for tightening monetary policy. We should also note the comments of the Japan's top currency diplomat Masato Kanda, who today announced the possibility of the government taking new measures against “chaotic speculative movements” in the market. These words were interpreted by experts as another warning about the possibility of new currency interventions.

Australia

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

Investors are focused on the results of the meeting of the Reserve Bank of Australia (RBA), at which the regulator left the key rate at a 12-year high of 4.35% and did not hint at the possibility of its growth, despite higher-than-expected inflation rates in the first quarter. RBA Governor Michele Bullock noted that officials did discuss the possibility of raising borrowing costs but concluded that monetary policy is already tight enough to return inflation to the target range of 2.0–3.0% by the end of 2025 of the year. Note that most experts are inclined to believe that the regulator will begin adjusting monetary policy in November.

Oil

Oil prices are declining moderately, despite the intensification of conflict in the Gaza Strip.

Today, the Israeli military took control of the border crossing between the city of Rafah and Egypt, which could lead to the final breakdown of peace negotiations taking place in Cairo and an increase in the market premium for geopolitical risks. Also, during the day, Russian Deputy Prime Minister Alexander Novak said that the OPEC group of leading oil producers had already agreed to take measures to adjust production, if necessary, but the official did not specify what they would be. Investors are awaiting the publication of a weekly report on inventories from the American Petroleum Institute (API): according to forecasts, they could decrease by 1.430 million barrels, pushing energy prices to an upward movement.