| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | Germany | GDP (QoQ) | Quarter I | -0.5% | 0% | -0.3% |
| 06:00 | Germany | GDP (YoY) | Quarter I | 0.8% | -0.1% | -0.5% |
| 06:00 | Germany | Gfk Consumer Confidence Survey | June | -25.8 | -24 | -24.2 |
During today's Asian trading, the US dollar rose slightly against major currencies, continuing yesterday's increase, and approaching the highest level since March 17. Demand for the US dollar, seen as a safe haven asset, intensified after ratings company Fitch put the United States' "AAA" debt ratings on negative watch in a precursor to a possible downgrade should lawmakers fail to raise the amount that the Treasury can borrow before it runs out of money, which could happen as soon as next week. A downgrade could affect the pricing of trillions of dollars of Treasury debt securities. Fitch's actions revived memories of 2011, when S&P downgraded to AA-plus and set off a cascade of other downgrades as well as a stock market sell off.
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 0.11% to 104.05.
The dollar is also supported by a decrease in the probability of a Fed rate cut this year. The minutes of the Fed's May meeting, published yesterday, showed that some participants in the meeting stressed that it was extremely important that policy did not signal the likelihood of rate cuts at the end of this year and did not rule out further increases. "The participants agreed that inflation was unacceptably high and was declining more slowly than they expected. Staff continue to forecast a recession at the end of this year, followed by a moderate recovery,” the minutes showed.
The euro fell 0.25% against the US dollar on the back of disappointing German data. Final data published by the Federal Statistical Office (Destatis) showed that in the 1st quarter, GDP shrank by 0.3% after falling by 0.5% in the 4th quarter. Economists had expected GDP to remain unchanged, according to a preliminary estimate. This revised figure indicated a second consecutive quarter of economic decline, plunging Europe's largest economy into a recession. The data also showed that in annual terms, GDP fell by 0.5% after an increase of 0.8% in the 4th quarter. It marked the first period of economic contraction since the first quarter of 2021, primarily driven by persistently high inflation and increased borrowing costs. Consensus estimates assumed a decline in GDP by 0.1%.
The Chinese yuan fell 0.2% against the US dollar, updating a 6-month high, as the latest Chinese data points to weak consumer demand and suggesting a post-pandemic recovery has already run its course.