| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Germany | CPI, y/y | January | 3.7% | 2.9% | 2.9% |
During today's Asian trading, the US dollar consolidated against major currencies, but is preparing to record its 4th consecutive weekly increase amid weakening expectations of monetary easing by the Fed in the near future.
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 0.03% to 104.13. Since the beginning of the week, the index has increased by 0.18%. The next catalyst for the dollar will be the US CPI data for January, which will be published next Tuesday. Economists expect price growth to accelerate to 0.3% m/m from 0.2% m/m in December, while core inflation rose again by 0.3% m/m. If price growth exceeds forecasts, this may cause another reassessment of the timing of the Fed's monetary policy easing. According to the CME FedWatch Tool, markets see a 17.5% probability of a 25 basis point rate cut at the Fed meeting in March and a 61.4% probability of a rate cut in May, with 115 basis points of cuts priced in for this year.
The yen fell to a 10-week low against the US dollar, but then returned to its opening level, as traders dialed back bets on how quickly the Bank of Japan will raise interest rates. Meanwhile, the head of the Bank of Japan Kazuo Ueda said today that there is a high probability of maintaining soft monetary conditions even after the Central Bank stops the policy of negative interest rates, which the market expects will happen in March. These statements were similar to yesterday's comments by his deputy Shinichi Uchida that "it's hard to imagine" that rates would rise "rapidly."
The New Zealand dollar rose 0.6% against the US dollar, as the latest stronger-than-expected labor market data strengthened investors' confidence that the Central Bank will not rush to lower interest rates. Meanwhile, ANZ experts said they now expect quarter-point hikes both this month and in April as their main scenario.