EUR/USD: according to the head of the Central Bank of the Netherlands, the ECB will cut rates in September
During the Asian trading session, the euro shows a slight increase against the US dollar, hovering around the 1.0830 mark ahead of important macroeconomic announcements this week. Traders are cautious in opening new positions, waiting for key economic statistics.
The political instability caused by the results of parliamentary elections in European countries also contributes to the pressure on the euro. So, in France, after the second round of elections, the New Popular Front coalition won, while Marine Le Pen's far-right National Unification party took only third place, and the coalition of incumbent President Emmanuel Macron retained second place. According to experts, the French parliament remains divided, and the formation of a new government may face problems: recently acting Prime Minister Gabriel Attal resigned, but the president refused to accept it.
Meanwhile, Claes Noth, head of the Dutch Central Bank, expressed the opinion that the European Central Bank (ECB) is unlikely to cut interest rates this month, but the September meeting may be more flexible and allow for necessary adjustments. He stressed that the measures taken to control inflation are effective and the target of 2.0% will be achieved by the end of 2025. Nevertheless, the duration of the process of stabilization of inflation levels indicates a slow decline in the deposit rate from the current 3.75%, which still limits economic growth. Markets expect from one to two changes in the cost of borrowing this year and up to four changes over the next eighteen months, assuming that the deposit rate will remain above 3.00% in the second half of 2025.
- Resistance levels: 1.0844, 1.0863, 1.0900, 1.0930.
- Support levels: 1.0820, 1.0800, 1.0765, 1.0730.
GBP/USD: the UK, with the new prime minister, is looking for ways to strengthen trade with the EU
The pound sterling is showing stagnation, having stabilized around the 1.2800 mark. The day before, it reached new highs since June 12, but by the end of the day, most of the acquired advantages were lost. The support for the currency was influenced by the outcome of the parliamentary elections, in which the Labor Party, which advocates reducing public spending, won for the first time in 14 years. However, this factor is beginning to lose its relevance.
On Thursday, investors in the UK will focus on GDP data for May, which is expected to show economic growth from 0.0% to 0.2%. It is also expected that industrial production will increase by 0.6% year-on-year after the previous decrease of -0.4%, and monthly growth by 0.2% after a significant drop of 0.9%.
Meanwhile, new Prime Minister Keir Starmer, while on a visit to Scotland, announced the intentions of the Labour Party to strengthen ties with the European Union to review trade agreements concluded by former Prime Minister Boris Johnson in 2020. However, according to experts from the UK in a Changing Europe think tank, these actions may have a limited impact on reducing government spending, which increased after Brexit. In addition, they note that 78% of Labour voters would support Britain's return to the EU.
- Resistance levels: 1.2817, 1.2860, 1.2900, 1.2963.
- Support levels: 1.2776, 1.2730, 1.2700, 1.2650.
USD/CHF: SECO forecasts strengthening of consumer sentiment in Switzerland
During the Asian trading session, the USD/CHF exchange rate settled at 0.8983, influenced by the weakening of the US dollar and a less pronounced strengthening of the Swiss franc, which may receive support from upcoming data from the Swiss State Secretariat for Economic Affairs (SECO) this month.
According to forecasts, in June, the consumer sentiment index will reach the level of -37.0 points, which is 3.0 points higher than a year ago. Sub-index indicators are also expected to improve, including expected economic development, financial situation and planning for significant purchases. Analyzing the trends of the consumer sentiment indicator, it can be noted that after a decline starting in July 2023, by autumn the indicator reached a minimum level of -53.0 points. However, SECO's current forecasts are much more positive and may contribute to the strengthening of the Swiss franc.
- Support levels: 0.8950, 0.8830.
- Resistance levels: 0.9020, 0.9160.
AUD/USD: at Westpac Banking Corp. they do not rule out a rate cut in Australia in November
During the Asian trading session, the AUD/USD exchange rate is gaining momentum, stabilizing at 0.6742. The rise in quotations is supported by the latest inflation data, which may affect the postponement of monetary policy changes by the Reserve Bank of Australia (RBA), especially considering that such an option was considered at their last meeting in June.
At the same time, experts from Westpac Banking Corp. It is assumed that a rate cut in November remains likely, as the central bank seeks to stimulate an increase in employment. Analysts expect rates to fall to 4.10% in November, to 3.85% by March and to 3.10% by next September. Nevertheless, if the fall in the consumer price index continues, and the labor market remains stable, this may push the RBA to take more drastic measures. On the other hand, today's data from the National Australia Bank (NAB) showed an increase in the business confidence index from -2.0 to 4.0 points, based on a survey of 350 companies. At the same time, Westpac's consumer sentiment indicator fell from 1.7% to -1.1%, highlighting the negative impact of high interest rates on the economy.
- Support levels: 0.6700, 0.6580.
- Resistance levels: 0.6760, 0.6870.