EUR/USD

The EUR/USD pair is trading in a narrow range of 1.0940–1.0960 after a moderate rise the day before. On Thursday, data on business activity in the services sector in the eurozone and the US were published. The index for European countries fell from 52.0 points to 50.9 points, which was worse than expected by experts (51.1 points), while the Composite PMI corrected from 49.9 points to 48.6 points instead of the expected 48.9 points, continuing to move in the stagnation zone. The slowdown in business activity in the European economy continued to rise, which increased the risks of a deepening economic downturn. Similar figures for the United States turned out to be somewhat better: the Non-Manufacturing Purchasing Managers Index from the Institute of Supply Management (ISM) fell from 53.9 points to 52.7 points instead of the 53.0 points expected by experts, and the Composite PMI went down from 53.2 points to 52.0 points. Business activity in the US economy continues to rise, albeit at a slower pace than before, which allows analysts to hope that a recession can be avoided. Today, the EUR/USD pair is showing flat dynamics in anticipation of the publication of July statistics on the US labor market. Unemployment Rate is expected to remain at 3.6%, and the Employment Change may slow down growth from 209.0 thousand to 200.0 thousand. It should be noted that the leading indicator of employment from the company Automatic Data Processing (ADP) in July increased by 324.0 thousand, exceeding the forecasts of experts at the level of 189.0 thousand. If today's data also show an increase in Employment, then the positions of the US currency may begin to strengthen again, as the US Federal Reserve officials will have a new argument in favor of another increase in the cost of borrowing.

GBP/USD

The day before, the GBP/USD pair fell to 1.2620, then won back the losses, but today it resumed growth and is now trading around 1.2710. The focus of investors remains the results of yesterday's meeting of the Bank of England, at which the interest rate was raised by 25 basis points to 5.25%, which is a 15-year high. Also officials of the department said that the continuing high level of inflation is unlikely to allow to abandon the tightening of monetary policy in the near future. Borrowing costs should remain high for a sufficiently long period of time to bring inflation down to the 2.0% target. In addition, the Governor of the Bank of England, Andrew Bailey, noted that the regulator may have to increase the indicator even more, but such a decision will depend on the publication of statistical data. These statements allowed the pound to win back losses. Also the day before, July data on business activity in the UK were presented: the Services PMI sector fell from 53.7 points to 51.5 points, and the Composite PMI fell from 52.8 points to 50.8 points. The growth of business activity in the British economy continues to slow down, which increases the risks of a recession in the country, although most experts hope to avoid it.

AUD/USD

The AUD/USD pair rose to the 0.6587 area, but is now losing ground, trading at 0.6560. In general, the long-term downtrend continues. The Australian currency is under pressure amid the publication of the quarterly report of the Reserve Bank of Australia (RBA) on monetary policy. The regulator downgraded economic growth estimates and predicted that inflation would return to the target range of 2.0-3.0% by the end of 2025. At this time, consumer prices should reach the level of 2.8%. As for economic growth, this year it may reach 0.9%, which is less than 1.2% previously estimated by experts, and in 2024 the country's Gross Domestic Product (GDP) may add 1.6%. The interest rate this year is likely to peak at 4.25%, and then it may start to decline, and in 2025 it may drop to 3.25%. Officials noted that if inflation expectations rise, the RBA will be forced to raise borrowing costs again to ensure a more significant slowdown in the economy and a larger increase in unemployment to return consumer prices to target levels.

USD/JPY

The USD/JPY pair is trading in a narrow range of 142.90–142.30 after falling the day before. Investors are waiting for the publication of the July data on employment in the US, which can provide a significant movement in the quotes of the trading instrument. It should be noted that in the near future the strengthening of the yen may contribute to the growth of the Japanese economy. According to a Reuters poll of leading economists, Gross Domestic Product (GDP) is expected to be 3.1% year-on-year in the second quarter. Experts are confident that the Japanese economy will continue to recover on the back of rising domestic consumption and capital expenditures.

XAU/USD

The XAU/USD pair continues to trade in a sideways range of 1938.00–1932.50, but the overall downtrend in the market continues. The instrument is in a state of uncertainty before the publication of the July data on the US labor market, as they may affect the further actions of the US Federal Reserve. If employment growth exceeds forecasts, and the labor market again demonstrates its stability, officials may think about a new increase in interest rates, which will strengthen the position of the US currency against its main competitors. Otherwise, the dollar may be under pressure.