Today Forex is a public holiday in the U.S., so financial institutions are closed and market activity is muted. Investors are assessing Friday’s ruling by the U.S. Court of Appeals, which declared the tariffs imposed by President Donald Trump unlawful. Officials had invoked the International Emergency Economic Powers Act (IEEPA) to introduce the measures, but the judges held that only Congress has the authority to apply this legal framework. Authorities intend to roll back most tariffs, excluding sector-specific ones, which would reduce the share of taxed imports from 69.0% to 16.0%. Such steps would lower the risk of inflation accelerating and could influence the Federal Reserve’s next monetary policy moves. The decision can be appealed until October 14. On Truth Social, Trump said the ruling would place unprecedented pressure on the national economy.

Eurozone

The Forexeuro is strengthening against the U.S. dollar and the yen, while showing mixed performance versus the pound.

Investors are digesting August activity data: the euro area manufacturing PMI rose from 49.8 to 50.7, beating the 50.5 forecast, while Germany’s reading increased from 49.1 to 49.8, still indicating stagnation. Overall, last month marked the first acceleration since early 2022, driven by a notable pickup in domestic demand and new orders, with Greece and Spain leading the improvement. Better economic conditions alongside low inflation allow the European Central Bank (ECB) to pause policy adjustments at least until November. Meanwhile, ECB President Christine Lagarde warned that President Trump’s attempt to dismiss Fed Board member Lisa Cook to gain control over the Federal Reserve could have negative consequences for both the U.S. and the global economy.

United Kingdom

The pound is strengthening against the U.S. dollar and the yen, while showing mixed performance versus the euro.

In August, the manufacturing PMI fell from 48.0 to 47.0, below the 47.3 consensus, reflecting a drop in new orders amid global trade tensions and expected tax hikes in the UK. The Nationwide house price index slipped from 0.5% to −0.1% m/m and from 2.3% to 2.1% y/y. According to the lender, the downturn reflects weaker buyer demand as high inflation continues to squeeze household incomes.

Japan

The yen is weakening against the euro and the pound, while trading mixed versus the U.S. dollar.

Traders are focused on August activity data: the manufacturing PMI eased from 49.9 to 49.7, defying expectations for an unchanged reading. The sector is slowing as foreign orders decline and U.S. tariffs exert pressure. On the other hand, Q2 capital expenditures rose from 6.4% to 7.6%, beating the 6.3% forecast and signaling a stable economy, which increases the likelihood of a more hawkish Bank of Japan stance.

Australia

The Australian dollar is strengthening against the euro, the pound, and the yen, while showing mixed performance versus the U.S. dollar.

In August, the manufacturing PMI edged up from 52.9 to 53.0, despite expectations for an unchanged print. The industrial sector is strengthening despite global trade instability, adapting to crisis conditions and raising the odds of another Reserve Bank of Australia (RBA) rate cut before year-end.

Oil

Crude prices are rising on reports of reduced Russian supply: tanker-tracking data show weekly exports from Russian ports fell to a four-week low of 2.72 million barrels per day.

However, the sector’s near-term trajectory could change: if OPEC+ and its allies agree to another production increase at the September 7 meeting, downward pressure on prices may build. Meanwhile, analysts at HSBC Holdings Plc expect a significant rise in global hydrocarbon inventories in Q4 this year and Q1 next year.