The United States of America

USD is weakening against EUR, GBP, and JPY.

The currency is under pressure after the publication of data from the labor market, which confirmed its cooling. In April, the employment level increased by 175.0K, less than the forecasts of 238.0K and the previous value of 315.0K, and unemployment – from 3.8% to 3.9%. Key indicators for the US Fed, growth in average hourly wages adjusted from 0.3% to 0.2% MoM and from 4.1% to 3.9% YoY, instead of 4.0% expected. These data strengthen investor confidence that regulator officials will begin reducing interest rates in September and may reduce them again before the end of the year, while the possibility of financial authorities refusing to ease monetary policy until 2025 is not excluded.

Eurozone

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

In March, the unemployment rate in the Eurozone countries, as expected, remained at 6.5%: since last March, the figure has been stable at 6.4–6.5%. Investors are assessing comments from representatives of the European Central Bank (ECB). So, today, board member of the regulator Yannis Stournaras said that officials were likely to cut interest rates three times this year, and more monetary easing was not expected due to stronger-than-expected economic growth supporting inflation. In addition, agency experts still predict that the consumer price index will reach 2.0% by the middle of next year, and the regulator’s chief economist, Philip Lane, notes that officials will need to evaluate macroeconomic statistics before each adjustment to borrowing costs.

The United Kingdom

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

In April, the services PMI increased from 53.1 points to 55.0 points instead of the expected 54.9 points, and the composite PMI – from 52.8 points to 54.1 points versus the forecast of 54.0 points. The country’s key services sector is recovering at the fastest pace in a year, allowing experts to count on the national economy emerging from recession and an increase in Q1 gross domestic product (GDP) by at least 0.4%. However, analysts remain cautious, citing the recent 10.0% rise in the low wage as the rise in demand for services but overall UK households are limiting spending under pressure from high consumer prices.

Japan

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

Today is a public holiday in Japan, so financial institutions are closed and investor activity is reduced. The market’s focus remains on the actions of the financial authorities, who carried out currency interventions twice this week, slightly stabilizing the yen. It is not known yet whether officials are ready for a long-term confrontation with market participants who, due to the difference in interest rates between Japan and other leading economies, still consider the yen attractive for sale. According to experts, supporting the yen is expensive, and 59.0B dollars has already been spent on it. How much more funds the Japanese government has left for these purposes is unknown, but experts believe that the officials will try to maintain the value of one dollar within the range of 150.0–155.0 yen.

Australia

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

In April, Services PMI decreased from 54.4 points to 53.6 points instead of the expected 54.2 points, and the composite PMI – from 53.3 points to 53.0 compared to forecasts of 53.6 points: indicators are recovering, albeit at a slower pace than experts had expected, supporting the risks of continued high inflation in the country and reducing the likelihood of the Reserve Bank of Australia (RBA) adjusting its monetary policy soon.

Oil

Oil prices are trying to decline.

The negative dynamics are developing against data from the American labor market, reflecting a weakening of the national economy, which could cause a drop in oil demand. In addition, the ongoing negotiations in Cairo between Israel and representatives of the Palestinian Hamas movement, which may result in a temporary truce, are putting pressure on the asset. However, a significant drop in quotations is hampered by statements from OPEC and allies about the likelihood of extending voluntary restrictions on the production and oil supply to the market, expiring in June, if oil demand maintains.