United States of America
The dollar today is strengthening against the euro and the yen and shows an ambiguous dynamics with the pound.
The focus is on the US-China trade conflict and new comments by President Trump on the Fed. Today, the Chinese Ministry of Finance announced plans to lift taxes on 16 types of American products from September 17, including livestock feed, cancer drugs, and lubricants. All this encourages the market before the resumption of negotiations in October. Meanwhile, US President Donald Trump continued to criticize the Fed, demanding lower rates. Today, he again said on Twitter that the regulator should reduce interest rates to zero or make them negative. The president also noted that the USA should refinance its debt burden. These comments are unlikely to have a significant impact on the Fed's position, as Jerome Powell has repeatedly pointed out that a change in monetary policy will not depend on political reasons.
The euro is weakening today against its main competitors – USD, JPY, and GBP.
Investors expect tomorrow's ECB meeting, the results of which are seen as uncertain. The market hopes that amid the latest negative statistics, the ECB could announce a future interest rate cut and possibly return the QE program, especially since Mario Draghi announced in June that he was exploring the possibility of new stimulating measures. Recently, however, a number of ECB officials, for example, the President of the France Central Bank Francois Villeroy de Galhau and the President of the Central Bank of Estonia Madis Müller, are against the introduction of a wide stimulus package. Of particular skepticism is the launch of the quantitative easing program. However, experts believe that the regulator may announce a reduction in deposit rates by 20 basis points and the launch of QE program in the amount of EUR 30 billion for a period of at least 12 months.
Today, GBP is growing against EUR and shows an ambiguous dynamics with USD and JPY.
In the absence of significant economic releases, investors continue to follow the development of the political crisis in the country. Yesterday, the activities of the Parliament of Great Britain were suspended according to the decree of Prime Minister Boris Johnson. However, today Scotland's Court of Session ruled that this decision was illegal, and the Prime Minister is trying to prevent the deputies from controlling the course of Brexit. Now the opposition, led by Labor, demands the resumption of Parliament's work. However, government officials announced that they would appeal to the Supreme Court in London, and the deputies would not resume work before it was considered. In general, the political crisis strengthens the prospects for a "tough" Brexit and puts pressure on British business.
The yen is weakening today against USD, strengthening against the euro and has ambiguous dynamics with the pound.
In the absence of significant releases, the movement of the yen is technical. It is worth noting that South Korea has filed a complaint to the WTO against the actions of Japan, which restricts the export of key high-tech materials to South Korean electronics manufacturers. Korean representatives believe that this decision is politically motivated and discriminatory. The new Japanese Minister of Commerce, Isshu Sugawara, said the government does not believe that restrictions violate WTO rules.
The Australian currency today generally strengthens to its main competitors – the pound, the euro, the US dollar, and the yen.
The Australian dollar is growing, despite the negative data on the Westpac consumer sentiment index for September. The indicator fell by 1.7%, despite the introduction of significant tax exemptions and simplified lending rules for households by the Australian government. These measures supported the housing sector, but demand remained weak in other spheres. Experts believe that in the current conditions, the RBA can make a new cut in rates at the next meeting in October.
Oil quotes had ambiguous dynamics today: morning growth was replaced by a downward correction.
Prices are influenced by mixed factors. On the one hand, they are supported by the data from the API report, according to which oil reserves in the USA fell by 7,200 million barrels, as well as by investors' hopes for easing the trade confrontation between the USA and China. On the other hand, the resignation of US National Security Advisor John Bolton, which may lead to a relaxation of tensions in the Middle East, and the downward revision of the forecast of oil demand by OPEC, are pressuring prices. Now the cartel expects that by the end of the year demand will grow by 1.02 million barrels per day, and by 2020 it will reach 1.08 million. In the evening, investors are waiting for the EIA report on oil stocks. Crude oil inventories are projected to decline by 2,686 million barrels. At the same time, gasoline inventories could be reduced by 0.847 million, and distillates could grow by 0.072 million barrels. Realization of the forecast can provide additional support to prices.