Investors and FX traders are focused on the conclusion of a trade agreement between the United States and India. On the eve of the announcement, White House head Donald Trump said that New Delhi had committed to reducing non-tariff barriers to exports and increasing purchases of U.S. goods by up to $500.0 billion, as well as abandoning imports of Russian crude oil, while the United States is prepared to adjust trade tariffs from 25.0% to 18.0%. Nevertheless, most agreements reached by the Republican administration with key partners remain framework deals, contain limited disclosed details, and lack specific implementation timelines. In this case, it is also unclear which product categories India plans to use to boost imports. Moreover, Prime Minister Narendra Modi has not confirmed a отказ from Russian energy supplies, making the terms of the deal even more uncertain.
At the same time, market participants paid attention to business activity data from the Institute for Supply Management (ISM), which proved positive. In the manufacturing sector, the index rose from 47.9 to 52.6 points, while in services it increased from 44.8 to 48.1 points. These figures confirmed the resilience of the U.S. economy and strengthened expectations that the Federal Reserve will maintain its current monetary policy stance in the medium term. Today, Atlanta Fed President Raphael Bostic noted that if the labor market stabilizes amid strong macroeconomic indicators, cutting borrowing costs is unlikely to slow inflation toward the 2.0% target. As a result, the regulator may find it appropriate to pause its dovish cycle this year.
Eurozone
The European currency is moderately strengthening against the yen and the pound, while showing mixed performance against the U.S. dollar.
In the absence of major economic releases, price movements are being driven mainly by external factors. At the same time, investors noted the publication of the European Central Bank’s quarterly bank lending survey. According to the report, eurozone financial institutions have tightened access to corporate borrowing and expect further deterioration amid rising economic uncertainty, largely driven by White House trade policy. The sharpest tightening was observed in Germany and France, while conditions remained unchanged in Italy and Spain. At the same time, banks confirmed that demand for loans is expected to continue rising across most sectors, with the exception of the automotive industry, wholesale and retail trade, and commercial real estate.
United Kingdom
The pound is losing ground against the euro, strengthening against the yen, and showing mixed dynamics against the U.S. dollar.
Traders are assessing January food inflation data from Worldpanel by Numerator. Price growth in this category slowed to a nine-month low of 4.0%, although it remains well above the Bank of England’s 2.0% target. At the same time, consumers continue to favor cheaper products, as household financial resilience has yet to fully recover.
Japan
The yen is weakening against its major counterparts—the euro, the pound, and the U.S. dollar.
Market attention is focused on recent comments from Prime Minister Sanae Takaichi, who noted that a weak national currency also has positive effects: it supports corporate sales as domestic investment recovers and facilitates exports of domestically produced goods. A similar view was expressed by Finance Minister Satsuki Katayama. Such rhetoric from officials has raised concerns among traders that the government may refrain from taking active measures to stabilize the exchange rate, such as currency interventions. These concerns have already been reflected in yen price action, which has resumed its decline.
Australia
The Australian dollar is strengthening today against its major counterparts—the euro, the pound, the yen, and the U.S. dollar.
Investors are focused on the outcome of the Reserve Bank of Australia’s monetary policy meeting, at which the interest rate was raised by 25 basis points to 3.85%. The driver behind the hawkish rhetoric was inflation, which—unlike in other developed economies—remains firmly above the target range of 2.0–3.0%. In its accompanying statement, the regulator noted that it is still unclear whether the current monetary stance is sufficiently restrictive, which experts interpreted as a signal of possible further rate hikes. RBA Governor Michele Bullock emphasized that she is not certain whether the current tightening marks the start of a full-fledged cycle or will remain a one-off move. Market participants currently estimate the probability of another rate increase in May at 75.0%, while over the course of the year rates could rise by a total of 40 basis points.
Oil
Oil prices are making moderate attempts to rise today following reports of a trade agreement between India and the United States, which experts believe could support global economic growth and strengthen demand for energy resources.
The document reportedly includes a requirement for New Delhi to abandon Russian oil, which could lead to a reduction in global supply. However, neither side has yet commented on possible changes in cooperation. It is also worth noting recent remarks by Russian Deputy Prime Minister Alexander Novak, who oversees the energy sector and stated that the global oil market remains balanced for now, with demand expected to gradually recover in March and April. Today at 23:30 (GMT+2), markets will receive weekly inventory data from the American Petroleum Institute (API), where an increase of 0.7 million barrels is expected—potentially adding downside pressure to prices.
