The United States of America

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

Investors focus on comments from leading US Fed policymakers. Thus, yesterday, the head of the Federal Reserve Bank (FRB) of Minneapolis, Neil Kashkari, said that the slowdown in inflation, supported by the growth of the construction sector, meant that the regulator would have to keep interest rates at current high levels for a long time, possibly throughout the current year. He added that the department’s economists are monitoring the state of the labor market, a significant weakening of which may allow them to begin adjusting monetary policy. Despite an increase in unemployment by 3.9% and a slowdown in employment growth to 175.0K in April, officials remain cautious, believing that a reduction in borrowing costs is possible later this year and if there is evidence of consumer price growth approaching the target level 2.0%.

Eurozone

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

In March, German industrial production fell by 0.4% compared to forecasts of –0.6% and February growth of 1.7%. It is the first decline in the indicator after two months of positive dynamics, which confirms continued pressure on the German economy. In addition, new orders fell 0.4% in the same period, reflecting a worsening industrial slowdown. Meanwhile, the head of the Deutsche Bundesbank, Joachim Nagel, pointed to the long-term risks of continued inflation amid the likely imminent labor shortage due to the demographic decline and the transition to a green economy. The official also promised that the European Central Bank (ECB) would take adequate measures if price pressures begin to increase again.

The United Kingdom

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

Due to a lack of significant economic releases, currency movements are due to external factors. Investors are awaiting tomorrow’s Bank of England meeting: according to forecasts, the interest rate will remain at 5.25%. However, regulator officials may hint at easing monetary policy soon, putting pressure on the pound. Analysts do not doubt that the department will switch to the “dovish” policy this year but disagree on its timing. Thus, most expect changes in June or August, and there may be two reductions in borrowing costs by a total of 50.0 points.

Japan

JPY is weakening against EUR, GBP, and USD.

Against negative dynamics of the national currency, which has been observed for the third session, investors are expecting new actions from the financial authorities. Today, Bank of Japan Governor Kazuo Ueda said that the regulator would take action if the yen’s fall had a significant impact on prices and added that agency officials might raise interest rates earlier than expected if inflation rose above forecasts. Most experts doubt that currency interventions will have a significant effect since last week economists already allocated 59.0B dollars to support the yen, but its strengthening was temporary, as monetary factors remain negative: in March, borrowing costs increased to 0.10 %, remaining significantly lower than in other developed economies.

Australia

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

In March, retail sales decreased by 0.4%, with preliminary estimates of –0.2% MoM and 1.3% YoY. Negative dynamics have been developing for the seventh quarter, which confirms the pressure of high inflation on households. Tomorrow, investors expect the publication of March data on building permits: according to preliminary estimates, their total volume will increase by 1.9%, and the figure for private houses – by 3.8%, supporting the national currency.

Oil

Oil prices are falling.

Peace talks in Cairo continue, and American mediators believe that a compromise between Israel and the Palestinian group Hamas can be found. Today, US Central Intelligence Agency (CIA) Director Bill Burns went to Tel Aviv for additional consultations with Israeli Prime Minister Benjamin Netanyahu. According to the American Petroleum Institute (API), oil inventories increased by 0.509M barrels instead of the projected –1.430M barrels. Today, investors expect the publication of the corresponding statistics from the Energy Information Administration of the US Department of Energy (EIA): according to preliminary estimates, the value will decrease by 1.430M barrels, supporting oil quotes.