EUR/USD: The European currency is strengthening against the US dollar today. Investors await the EU leaders’ summit where the situation on the energy market and the issue of the possibility of revising the rules of the European energy market will be discussed. In the draft joint statement following the summit, the governments of European countries are invited to provide urgent support to consumers and companies affected by the rise in prices. In addition, a number of countries (Italy, Spain, Greece) propose to carry out common EU gas purchases to form strategic reserves, while others (Germany, Belgium) refuse this, suggesting that the price crisis is temporary and by April they will stabilize. Representatives of the German Ministry of Finance today noted that tax collections in the country have increased this year. Officials expect economic growth to resume next year as inflationary pressures ease.
USD/JPY: The USD/JPY pair showed mixed dynamics this week. The day before yesterday, the price reached highs since November 2017, after which a corrective pullback began.
The current decline in quotations is seen as technical, as general fundamental factors remain negative for the yen. September data on Japan’s foreign trade was broadly weak for the second straight month. Japan’s export growth slowed from 26.2% to 13.0%, which corresponds to a seven-month low. The trade deficit decreased from 637.2 to 622.8 billion yen. According to the Bank of Japan, the country’s banking system as a whole remains stable but may face risks due to the increase in the cost of loans associated with a weak economic recovery. In addition, the uncertain political situation negatively affects the yen. The country is preparing for new parliamentary elections, but Japan’s ruling Liberal Democratic Party may not maintain its leading position, as its popularity among citizens is declining.
XAU/USD: Gold prices are rising during the morning session, continuing their recovery after a significant decline at the end of last week, when the instrument failed to gain a foothold at the local highs of September 15. The reason for the increase in buying activity for the instrument is the fear of rising inflationary pressure, which is gaining momentum in Europe and the United States. Record prices for energy resources, in particular for natural gas, as well as upward trends in oil markets, add to the negative market. In turn, investors are concerned about an imminent rise in interest rates by the world’s leading financial regulators. The US Federal Reserve may announce the quantitative easing tapering as soon as November, and the Bank of England is actively hinting at the possibility of an interest rate hike.