United States of America

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

The June data on the US Manufacturing PMI from the Institute for Supply Management (ISM), published yesterday, turned out to be weak: the indicator decreased from 48.7 points to 48.5 points instead of the expected increase to 49.2 points, which may give the US Federal Reserve reasons to start interest rate cuts, although most officials are currently cautious in their rhetoric. Today, investors will watch the speech of the head of the American regulator, Jerome Powell, at the forum of the European Central Bank (ECB). The official may confirm the effectiveness of the current level of interest rates but add that new evidence of a stable decline in inflation towards the 2.0% target is needed before embarking on monetary policy adjustments.

Eurozone

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

Investors are focused on the publication of preliminary June inflation data in the Eurozone: MoM, the indicator remained at 0.2%, and YoY, it decreased from 2.6% to 2.5%, while the base value adjusted from 0.4% to 0.3% MoM and was fixed at around 2.9% YoY instead of the expected 2.8%. However, officials at the European Central Bank (ECB) remain cautious: yesterday, the head of the regulator, Christine Lagarde, said that officials need more time to ensure that the consumer price index moves sustainably to the target level of 2.0%, so easing monetary policy will occur at a moderate pace. The official also noted that the risks of a recession have not yet been eliminated, and the prospects for further economic growth look uncertain.

United Kingdom

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

Today, June inflation data in large retail chains from the British Retail Consortium (BRC) was published: the retail price index decreased from 0.6% to 0.2%, a three-year minimum, while prices for non-food products decreased by 1.0 %, and for food, growth slowed from 3.2% to 2.5%. These statistics increase the likelihood that the Bank of England will switch to easing monetary policy, despite the fact that inflation in the service sector is still too high (6.0%). Experts believe that with a 60.0% probability, the first interest rate adjustment from 5.25% to 5.00% will occur during the August meeting.

Japan

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

Japanese authorities again warned the market about the possibility of intervention to stabilize the rapidly weakening national currency. Finance Minister Shunichi Suzuki today indicated that the exchange rate is set by the market and reflects a complex of various factors, including inflation, the current account balance, market sentiment and speculative actions. It is worth noting that such statements by officials have become regular and have less and less influence on investor sentiment, and experts even doubt the effectiveness of new currency interventions.

Australia

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

Investors are focused on the publication of the minutes of the latest meeting of the Reserve Bank of Australia (RBA): according to the document, officials discussed further tightening of monetary policy, but concluded that maintaining the key rate at 4.35% is more appropriate currently. The regulator also stated that it will do everything necessary to return inflation to the target level of 2.0–3.0% and confirmed that no further steps on its part can be ruled out. This means that before the end of the year, both a reduction and an increase in borrowing costs is possible. Currently, most experts surveyed by Bloomberg News expect the RBA to keep interest rates at current levels throughout the year, but some do not rule out raising them as early as August.

Oil

Oil prices continued their uptrend today, supported by investor hopes for increased fuel demand in the United States during the summer tourist season.

These calculations are confirmed by the latest data from the American Automobile Association, which projects a 5.2% increase in domestic travel compared to 2023 and a 4.8% increase in automotive trips. Also contributing to the growth of quotations are fears of interruptions in the work of oil refineries due to the approach of Hurricane Beryl to the US east coast. During the day, investors expect the publication of weekly data on inventories from the American Petroleum Institute (API): they could decrease by 0.15 million barrels, after which prices will receive additional support.