Ekonomické zprávy

Asian session review: the US dollar shows a weak decline

TimeCountryEventPeriodPrevious valueForecastActual
06:30SwitzerlandIndustrial Production (YoY)Quarter I5.9% 3.4%

During today's Asian trading, the US dollar eased slightly against major currencies, continuing Friday's decline, which was caused by news of the unexpected termination of negotiations on raising the US debt ceiling.

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 0.09% to 103.10.

Although negotiations on raising the US debt ceiling eventually resumed, neither side reported any progress. Market participants are now waiting for a key meeting between US President Joe Biden and Republican House Speaker Kevin McCarthy.

The dollar is also being influenced by the reassessment of the Fed's monetary policy prospects after Fed Chairman Powell said on Friday that tightening credit conditions means that "the interest rate may not need to be raised as much as it would otherwise be to achieve the Fed's goals." However, he reiterated that interest rate decisions would be made "meeting by meeting." According to the CME FedWatch Tool, markets now see an 11.6% chance that Fed rates will be raised by 25 basis points in June, compared with 17.4% on Friday.

The Chinese yuan fell 0.2% against the US dollar after the Central Bank promised to do everything possible to prevent significant fluctuations in the exchange rate. According to traders, investors refrained from aggressively testing new lows for the yuan after the Central bank on Friday promised to curb speculation and urged key participants to maintain stability in the foreign exchange market. Traders added that additional measures may be taken to prevent the rapid depreciation of the yuan after verbal warnings.

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