| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | HICP, Y/Y | May | 3.5% | 3.4% | 3.4% |
| 06:00 | United Kingdom | HICP ex EFAT, Y/Y | May | 3.8% | 3.6% | 3.5% |
| 06:00 | United Kingdom | HICP, m/m | May | 1.2% | 0.2% | 0.2% |
During today's Asian trading, the US dollar declined moderately against major currencies, while markets awaited the Federal Reserve's rate decision and monitored the escalating conflict between Israel and Iran. Israel has conducted six days of strikes targeting Iran’s nuclear facilities and called for regime change. Meanwhile, the U.S. has increased its military presence in the region, raising fears of a broader conflict that could disrupt global energy supply chains.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.26% to 98.57.
But the dollar has risen about 1% against the yen, franc, and euro since Thursday, as investors thought safety. Though weakened by concerns over President Trump's trade policies earlier this year, the dollar remains a preferred haven due to its liquidity, economists said.
Traders are focused on the Fed’s upcoming decision, with expectations for rates to remain unchanged. However, recent signs of economic slowdown and volatile oil markets complicate the outlook. The labor market remains a key factor, with jobless claims data due later Wednesday.
In the UK, the pound rose 0.2% to $1.3465 after inflation slowed to 3.4% per annum in May, as expected. On a monthly basis, the consumer price index rose 0.2%, slowing compared to April (+1.2%) and recording the weakest increase since March (+0.3%). Consensus estimates also suggested a 0.2% increase. Economists and investors expect the Bank of England (BoE) to keep interest rates unchanged at its meeting tomorrow. But the recent increase in oil prices following the Iran-Israel conflict may push inflation higher again. Markets currently see an 87% chance of no rate move this week, but expect two 25-basis-point cuts by year-end. While the BoE forecasts inflation peaking at 3.7% this year, some economists believe April might mark the peak - though geopolitical risks could change that.