EUR rose against USD on Thursday, updating local highs of August 29. At the same time, during the day the instrument traded mainly with a decrease, and the published ECB decision on monetary policy even led to a short-term collapse of EUR to the lows of September 3. As expected, the European regulator kept the key interest rate unchanged at 0.0% and lowered the deposit facility rate to –0.50%. The ECB also announced the launch of a new quantitative easing program of EUR 2.6 trillion at a rate of EUR 20 billion per month in November. Despite the fact that the regulator’s decision coincided with forecasts, analysts note that a certain split has been outlined in the ECB camp, and this may threaten new problems in the future. However, the European regulator is waiting for changes soon as Christine Lagarde, who now heads the IMF, will take the chair.
GBP showed a slight increase against USD on Thursday, continuing the development of flat dynamics in the short term. The focus of investors remains on the situation with Brexit. Despite the efforts of the British Parliament, the threat of the hard Brexit persists, since a new deal has not yet been developed, and the British Prime Minister remains adamant about the Irish border backstop. Yesterday’s US statistic was ambiguous. In August, the Consumer Price Index slowed from +0.3% MoM to +0.1% MoM, which coincided with the forecasts. In annual terms, consumer inflation grew by 1.7% YoY, which turned out to be worse than market expectations of +1.8% YoY. Core CPI showed an increase of 0.3% MoM with a forecast of +0.2% MoM.
AUD showed moderate increase against USD, updating local highs of July 31. At the same time, the instrument failed to consolidate at new highs, and by the time the afternoon session closed, USD won back part of the losses amid cautious optimism from the publication of consumer inflation in the US. AUD is supported by emerging progress in the US-Chinese trade negotiations. Earlier the parties made concessions to each other: Washington postponed the date of another increase in import duties, and Beijing resumed import of agricultural machinery, raw materials and medicines from the US. Investors today are focused on macroeconomic statistics on US retail sales in August. In addition, traders are interested in data on import prices and Michigan consumer expectations in September.
USD continues a confident upward rally against JPY, updating highs of August 1. USD is supported by a high demand for risky assets amid some improvement in global prospects. In particular, investors are optimistic about the start of a new round of trade negotiations between the United States and China, because this time the parties approach this process with some groundwork. During today’s Asian session, the instrument is trading in both directions. Traders are interested in data on retail sales and Michigan consumer expectations in the US. It is possible that at the end of the week the instrument will try to correct against the background of the closure of part of the long dollar positions.
Oil prices fell on Thursday, responding to OPEC+ decision to leave the parameters for reducing oil production unchanged. The central place in the discussions was given to the reduction of production in Russia, Nigeria and Iraq to the indicated levels, and it was decided to postpone the discussion of the issue of changing these levels to the December meeting of the cartel. Additional pressure on the instrument was provided by the ECB decision to lower deposit rates and to launch a new program of quantitative easing. Immediately after the publication of the decision of the European regulator, Donald Trump again criticized the Fed and demanded immediate action. It is possible that the decision of the American regulator next week will be adjusted according to the example of the ECB, and the market will see a more active easing of monetary policy. On Friday, investors expect the Baker Hughes Oil Rig Count in the US to be published.