Ekonomické zprávy

Asian session review: the US dollar is showing negative dynamics

TimeCountryEventPeriodPrevious valueForecastActual
00:30AustraliaRetail Sales, M/MJanuary-2.7%1.5%1.1%
07:00GermanyRetail sales, real unadjusted, y/yJanuary-1.7%-1.5%-1.4%
07:45FranceCPI, y/yFebruary3.1%2.7%2.9%
07:45FranceGDP, q/qQuarter IV0%0%0.1%
08:00SwitzerlandGross Domestic Product (QoQ) Quarter IV0.3%0.1%0.3% 

During today's Asian trading, the US dollar declined slightly against major currencies, while investors are cautious ahead of the publication of US inflation data, which may affect further actions by the Fed.

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 0.10% to 103.87. However, since the beginning of the month, the index has increased by 0.6% amid weakening expectations of a Fed interest rate cut. As for the data, the personal consumption expenditures price index (the Fed's preferred inflation indicator) will be presented today at 13:30 GMT. Economists expect core PCE to grow by 0.4% compared to December and by 2.8% per annum in January. However, the January data on the consumer price index and the producer price index suggest higher monthly figures for both the overall and core PCE, driven by growth in the services sector. Given that services remain a key factor in the steady decline in inflation, this is likely to prevent an inevitable rate cut from the Fed. Experts warn that a stronger than expected PCE deflator can cause markets to reduce pricing for a May rate cut even further, supporting the U.S. dollar. According to the CME FedWatch Tool, markets see a 19.4% probability of a 25 basis point rate cut at the Fed meeting in May, and a 63.5% probability of a rate cut in June, with approximately 80 basis points of cuts priced in for this year.

The yen rose by 0.65% against the US dollar, helped by statements from Bank of Japan board member Hajime Takata. He noted that there are finally prospects of achieving the 2% inflation target, paving the way for a move away from negative rates and bond yield curve control. However, the yen is preparing to record another monthly decline in February (-1.9%).

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