EUR/USD

The EUR/USD pair is showing mixed dynamics, holding close to 1.0890 and local lows from August 8. Market activity remains subdued as investors await the release of the European Central Bank (ECB) meeting results tomorrow. Markets are expecting another 25-basis-point cut in the key interest rate from 3.65% to 3.40%, as well as signals in favor of further monetary easing in the near future. Also on Thursday, macroeconomic statistics from the eurozone on inflation will be presented: forecasts do not suggest any changes from the previous values of –0.1% in monthly terms and 1.8% in annual terms, while the Core Consumer Price Index is likely to be fixed at 2.7%. Meanwhile, the single currency received some support from August Industrial Production data: the annual dynamics added 0.1% after –2.1% in the previous month, while analysts expected –1.0%, and in monthly terms the pace of production accelerated by 1.8% after –0.5%, which fully coincided with market expectations. Another optimistic signal for the euro was the rise in the Economic Sentiment index from the Centre for European Economic Research (ZEW) in October from 9.3 points to 20.1 points, with preliminary estimates of 16.9 points. In turn, the Economic Sentiment index in Germany rose from 3.6 points to 13.1 points, with a forecast of 10.0 points. In turn, American data on business activity reflected a sharp decline in the index in the NY Empire State Manufacturing Index in October from 11.5 points to –11.9 points, while experts expected 2.3 points. Today, investors will focus on the publication of the August US Budget Statement, while in the eurozone, ECB President Christine Lagarde will speak.

GBP/USD

The GBP/USD pair is trading with a downward trend, testing 1.3020 for a breakdown, and investors are focused on the block of macroeconomic statistics from the UK. The Consumer Price Index in annual terms in September slowed sharply from 2.2% to 1.7% with a forecast of 1.9%, and in monthly terms — from 0.3% to 0.0%, while the market expected 0.1%. The Core CPI fell from 3.6% to 3.2%, while analysts had expected 3.4%. Market participants also continue to evaluate the UK labor market report presented the day before: the Claimant Count Change in September increased from 23.7 thousand to 27.9 thousand with expectations of 20.2 thousand, the Net Employment Change in August rose from 265.0 thousand to 373.0 thousand, and the Unemployment Rate adjusted from 4.1% to 4.0%. At the same time, Average Earnings Including Bonus fell from 4.0% to 3.8%, and Excluding Bonus — from 5.1% to 4.9%. Meanwhile, moderate pressure on the position of the American currency was exerted the day before by data on NY Empire State Manufacturing Index: in October, the index fell from 11.5 points to –11.9 points, while experts expected –2.3 points. Tomorrow, the US will release September Retail Sales and Industrial Production data, with sales expected to rise 0.1% to 0.3%, and the rate excluding autos expected to be 0.1%.

NZD/USD

The NZD/USD pair is showing a confident decline, testing 0.6060 for a breakdown and updating local lows from August 16. Pressure on the instrument's position on Wednesday morning was exerted by statistics from New Zealand: the Consumer Price Index in the third quarter on an annualized basis slowed sharply from 3.3% to 2.2%, and in the quarterly terms it accelerated from 0.4% to 0.6% with a forecast of 0.7%. Low inflation is likely to lead to further reductions in borrowing costs by the Reserve Bank of New Zealand (RBNZ) at a faster pace than previously estimated. Markets also paid attention to the Retail Sales data that was published earlier in the week: Electronic Card Retail Sales in annual terms in September fell by 5.6% after –2.9% the month before, and in monthly terms they adjusted from 0.2% to 0.0%. In addition, the instrument is under pressure at the beginning of the week from statistics from China, which is increasing investors’ anxiety about the pace of recovery of the national economy: thus, the Consumer Price Index in September fell from 0.6% to 0.4% in annual terms and from 0.4% to 0.0% in monthly terms, and the Producer Price Index demonstrated a confident decline of 2.8% after –1.8%. Tomorrow, the US will release data on Retail Sales and Industrial Production for September, as well as on Jobless Claims. Forecasts suggest that Initial Jobless Claims for the week ended October 11 will remain at 258.0 thousand.

USD/JPY

The USD/JPY pair shows ambiguous dynamics, consolidating near 149.25. The dollar is weakening slightly against the yen after updating local highs from early August the day before, which is partly due to technical factors and low trading volumes on the market. Investors noted a significant decline in the NY Empire State Manufacturing Index in October from 11.5 points to –11.9 points, compared to a forecast of 2.3 points. Meanwhile, Japanese data for August showed Industrial Production contracting 4.9% year-on-year, the same as the previous month, and 3.3% month-on-month, in line with market expectations. At the same time, Capacity Utilization fell by 5.3% after increasing by 2.5% the month before. Today, Japan released statistics on Machinery Orders, the volume of which in August fell by 3.4% year-on-year after growing by 8.7%, and from –0.1% to –1.9% month-on-month.

XAU/USD

The XAU/USD pair is again showing weak growth, testing 2670.00 for a breakout. US trading floors were closed earlier in the week for the Columbus Day holiday, while investors assessed consumer and producer inflation data released earlier. In September, the Core Consumer Price Index accelerated from 3.2% to 3.3% year-on-year and added another 0.3% month-on-month, while analysts had expected 0.2%, and the CPI slowed from 2.5% to 2.4%, compared with a forecast of 2.3%. In turn, the Producer Price Index for the same period adjusted from 1.9% to 1.8% year-on-year, compared to preliminary estimates of 1.6%, and the Core PPI adjusted from 2.6% to 2.8%. More persistent inflation will impact the Fed's future monetary policy. At the same time, the regulator had previously refused to rapidly reduce the cost of borrowing, so the presented statistics only slightly affected expectations from the November meeting of the Fed. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, analysts are expecting a rate adjustment of –25 basis points with a probability of about 89.0%. The European Central Bank (ECB) is set to meet tomorrow, and its results could provide moderate support for gold: the regulator is expected to cut borrowing costs by 25 basis points to 3.40%.