On the eve, Federal Reserve Board member Stephen Miran stated that the Republican administration’s trade policy has had a limited impact on the U.S. economy, with most of the costs associated with higher tariffs and taxes borne primarily by foreign companies, while the effect on household consumer spending remains minimal. Analysts and forex traders view this as confirmation of gradually easing inflationary pressure, creating conditions for potential monetary policy easing while preserving financial stability. In addition, White House economic adviser Kevin Hassett noted that employment growth may slow in the coming months due to weaker labor force growth, rising productivity, and reduced inflows of labor migrants, which could affect job vacancies. Toward the end of the week, market participants will focus on key U.S. labor market data, where unemployment is expected to remain at 4.4%, employment growth is projected to adjust from 50.0K to 66.0K, while average hourly earnings are likely to hold near 0.3%, in line with previous rates.
Eurozone
The euro is strengthening against the pound, weakening against the yen, and showing mixed dynamics versus the U.S. dollar.
Investors are assessing the rhetoric of monetary authorities. European Central Bank President Christine Lagarde reaffirmed forecasts that inflation in the euro area could fall below 2.0% later this year before returning to that level over the medium term. German Bundesbank President Joachim Nagel shares this view, emphasizing that monetary policy is currently at an optimal level and inflationary pressure should soon stabilize near the target. According to Nagel, the ECB would take decisive steps to adjust monetary conditions only if medium-term inflation expectations fail to materialize; for now, the situation remains sufficiently stable, and small, temporary deviations in components such as energy prices do not warrant a policy shift. Meanwhile, Slovak central bank governor Peter Kažimír stated that a significant deviation from economic trends and a clear acceleration in inflation would be required for the ECB to consider changing interest rates—conditions that are not currently observed.
United Kingdom
The pound is losing ground against its major counterparts—the U.S. dollar, the euro, and the yen.
Political instability in the UK remains in focus for forex investors. Within a few days, two key aides to Prime Minister Keir Starmer were forced to resign, significantly increasing the likelihood of an early leadership change. Scottish Labour leader Anas Sarwar called on Starmer to step down, a demand the prime minister rejected, stating his intention to remain in office. Sources indicate that most party members oppose a leadership change before the May local elections, though the probability may rise significantly afterward if internal tensions persist. At the same time, retail sales data from the British Retail Consortium (BRC)—which tracks sales at stores open for at least one year—showed annual growth accelerating from 1.0% to 2.3%, far exceeding analyst expectations of 1.2%. The increase was driven by higher household spending on food (+3.8%) and non-food items (+1.7%). The figures point to a recovery in consumer activity and stronger domestic demand, which could support short-term economic indicators and perceptions of the UK economy’s resilience.
Japan
The yen is strengthening against the pound and the euro today but shows mixed dynamics against the U.S. dollar.
Investors remain focused on the Japanese government’s initiative to reduce the 8.0% consumption tax on food products, a move that could increase government spending by about ¥5.0 trillion per year. Finance Minister Katsuyuki Katayama confirmed that the use of part of Japan’s foreign exchange reserves—estimated at $1.4 trillion—is being considered to cover the potential shortfall, though no final decision has been made. At the same time, data on machinery orders—one of Japan’s key export categories—showed annual growth accelerating from 10.9% to 25.3%, creating favorable conditions for sustaining investment activity.
Australia
The Australian dollar is weakening against the yen and showing mixed dynamics against the euro, the pound, and the U.S. dollar.
January business confidence data from National Australia Bank (NAB) were released today: the business conditions index declined from 9.0 to 7.0 points, while the business confidence index improved from 1.0 to 3.0 points. The business survey also indicated that labor and input costs declined, while quarterly retail price growth slowed from 0.5% to 0.3%.
Oil
Oil prices are showing moderate gains today amid expectations surrounding the outcome of negotiations between the United States and Iran on the nuclear deal, which will largely determine the medium-term price trajectory. If no compromise is reached, the risk of supply disruptions through the Strait of Hormuz remains, potentially removing up to 20.0 million barrels per day from the global market. Geopolitical tensions continue to rise: the U.S. Maritime Administration (MARAD) has advised U.S.-flagged commercial vessels to temporarily avoid Iranian territorial waters, following reports of suspicious activity in the area.
At 23:30 (GMT+2) today, the American Petroleum Institute (API) will publish its weekly report on crude oil, gasoline, and distillate inventories. Previously, crude stocks fell by 11.1 million barrels, and a continuation of this trend would act as a catalyst for further upside in energy prices.
