Ekonomické zprávy

Asian session review: the US dollar is showing positive dynamics

TimeCountryEventPeriodPrevious valueForecastActual
01:30AustraliaWage Price Index, q/qQuarter I0.8%0.9%0.8%
01:30AustraliaWage Price Index, y/yQuarter I3.4%3.6%3.7%
04:30JapanIndustrial Production (MoM) March4.6% 1.1%
04:30JapanIndustrial Production (YoY)March-0.5% -0.6%

During today's Asian trading, the US dollar rose slightly against major currencies, continuing yesterday's increase and reaching its highest level since April 10. The US currency is supported by weakening expectations of easing the Fed's monetary policy after the publication of favorable data on consumer spending and hawkish statements by Fed policymakers. Demand for the dollar, considered as a safe haven asset, also intensified amid the risk of a US default.

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) rose by 0.15% to 102.72.

President Joe Biden and Republican House Speaker Kevin McCarthy approached an agreement on raising the US debt ceiling, but nothing has been decided yet. While Biden warned that any default would lead the economy into recession, investors fear that the consequences on a global scale will be negative, and therefore view the dollar as a safe asset.

As for the prospects for the Fed's monetary policy, Chicago Fed President Austan Goolsbee said that "it is too premature to talk about lowering rates," and Cleveland Fed President Loretta Mester said that rates have not yet reached the point where the Central Bank could keep them stable, given steady inflation. Earlier this month, Fed Chairman Jerome Powell indicated that, depending on the data, interest rate hikes could be suspended soon. According to the CME FedWatch Tool, the markets estimate the chances of a 25 basis point rate cut at the July meeting at 23.1% (versus 27.7% the day before), while the probability that rate will remain unchanged is estimated at 61.1% (versus 59.1% the day before).

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