Analysis

Forex. Today, the US currency is weakening against the yen

United States of America, Today, the US currency is weakening against the yen, strengthening against the euro and has ambiguous dynamics with the pound.

Investors are still focused on the US-Chinese trade conflict. Yesterday, it became known that the administration of President Donald Trump is considering imposing more stringent restrictions on the export of technology to China. The escalation of the conflict generates pessimism and concern for global business. According to a recent CNBC poll Global CFO, 75% of the representatives of the world's largest companies believe that US trade policy will have a negative impact on their business over the next six months. None of the respondents expects a positive impact of the conflict.

During the day, October data will be published for the American construction market. It is expected that the number of issued building permits will increase from 1.241 million to 1.260 million, and the construction of new houses may increase from 1.201 million to 1.225 million. The implementation of the forecast is likely to strengthen USD.

Forex

Eurozone

EUR today is weakening against its main competitors - the dollar, the pound, and the yen.

In the absence of significant economic releases, European investors are focused on the UK, where Prime Minister Theresa May is trying to conduct a draft agreement with the EU through parliament. May's appeal for support to large British businesses was generally positively appreciated by the market, but the position of the Prime Minister remains difficult. The Conservative Party does not have a majority in Parliament, and the deputies from the allied Democratic Unionist Patry of Northern Ireland (DUP) expressed dissatisfaction with the terms of the deal and do not want to support it. In the EU, there are also people dissatisfied with the agreement: Spanish Prime Minister Pedro Sanchez said that he insists on direct negotiations over Gibraltar, a territory disputed by Madrid. The fate of Gibraltar should be decided in separate negotiations not only because of its controversial status but also because 96% of its inhabitants voted against Brexit.

United Kingdom

Today, GBP is growing against EUR and shows an ambiguous dynamics with JPY and USD.

Investors are still focused on Brexit. Yesterday, Theresa May spoke to representatives of the Confederation of British Industry (CBI). She said that an agreement with the EU means overall economic success, zero tariffs, and extensive customs arrangements. CBI head, John Allen, said that the deal should take into account the results of the referendum, but limit the damage to the economies of Great Britain and the European Union. Generally, business supports the deal, but this is not enough to agree with it for the parliament, where Teresa May loses supporters.

Also today, the head of the Bank of England Mark Carney addressed the parliamentarians, but he just confirmed his opinion expressed earlier. The official noted that the tough Brexit can cause economic shock in the country and will cause significant inflation, which will force the regulator to start raising rates. The BoE head also noted that in the near future the pound will remain unstable, and the market volatility will be high.

Japan

JPY is now strengthening against the euro and the US dollar and shows ambiguous dynamics with the pound.

In the absence of important macroeconomic releases, JPY movement is of technical nature. One should note yesterday's speech by the head of the Bank of Japan, Haruhiko Kuroda, who warned that lower profits in regional banks could damage the national economy and potentially destabilize the financial system. Kuroda noted that the profitability of regional banks continued to fall due to long-term low interest rates, a decrease in the population, and a drop in the number of firms operating in regions. The words of the official can be regarded as a signal to the change in ultra-soft Japanese monetary policy, but it is unlikely to happen soon.

Australia

The Australian dollar generally continues to weaken against its main competitors - the yen, the pound, the US dollar, and the euro.

Today, minutes of the last meeting of the Reserve Bank of Australia were published; according to them, the country's economy continues to grow - and somewhat faster than expected. The regulator kept the monetary policy unchanged, as it contributes to sustainable growth of the economy and the gradual achievement of the inflation target level. RBA's head, Phillip Lowe, today confirmed that the regulator will maintain the current monetary policy for a long time.

Oil

During the day, oil prices are correcting down.

Quotes are falling in anticipation of the API report, which can fix a new increase in oil reserves in the US (currently this happens for four weeks in a row). The last time they rose by 8.790 million barrels. The continuation of the trend will put additional pressure on prices.

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