Ekonomické zprávy

Asian session review: the US dollar is showing negative dynamics

TimeCountryEventPeriodPrevious valueForecastActual
03:00ChinaTrade Balance, blnFebruary75.34107125.16
07:00GermanyFactory Orders s.a. (MoM)January12.0%-6%-11.3%

During today's Asian trading, the US dollar fell slightly against major currencies, continuing yesterday's decline and reaching its lowest level since February 2, which was caused by increased expectations of easing of the Fed's monetary policy at the June meeting.

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 0.11% to 103.26. Yesterday, Fed Chairman Powell said that a rate cut would "probably be appropriate" later this year "if the economy develops as a whole as expected" and as soon as officials gain more confidence in a sustained slowdown in inflation. In addition, data released yesterday indicated a softening of conditions in the US labor market, which put additional pressure on the dollar. According to the CME FedWatch Tool, markets see a 20.2% probability of a 25 basis point rate cut at the Fed meeting in May, and a 68.1% probability of a rate cut in June. However, these expectations may change dramatically after the publication of the February nonfarm payrolls report (on Friday). The pace of hiring remains strong, and experts expect that employment increased by 200,000 in February. In addition, the unemployment rate is expected to remain unchanged, and the growth of average hourly earnings slowed to 0.3% m/m amid normalization of supply and demand for workers.

The yen rose 0.95% against the US dollar, reaching its highest level since February 7, helped by growing speculation that the Bank of Japan may lift negative interest rates as early as this month. Bank of Japan board member Junko Nakagawa said today that Japan's economy is steadily moving toward sustainably achieving the central bank's inflation target (2%). Meanwhile, the media reported yesterday that at least one of the Bank of Japan's nine board members is likely to say that ending negative interest rates would be reasonable at the March meeting.

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