| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | United Kingdom | Retail prices, Y/Y | January | -2.4% | -1.4% | 0.7% |
| 07:00 | United Kingdom | Retail Sales (MoM) | January | -3.3% | 1.5% | 3.4% |
| 07:45 | France | CPI, y/y | January | 3.7% | 3.1% | 3.1% |
During today's Asian trading, the US dollar rose slightly against major currencies, and is preparing to record another weekly increase, as the latest US data reduced the likelihood of easing the Fed's monetary policy 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) rose by 0.08% to 104.38. Since the beginning of the week, the index has increased by 0.25%. Experts warn that overall market expectations on the timing of the first Fed cut and magnitude of the cut will continue to drive volatility in FX markets. Meanwhile, today investors will focus on January data on US producer prices. Economists expect producer price growth to slow to 0.6% per annum from 1% per annum in December. If price growth exceeds forecasts, it is more likely that the Fed will keep interest rates at the current level for longer. According to the CME FedWatch Tool, markets see a 8.5% probability of a 25 basis point rate cut at the Fed meeting in March and a 32.9% probability of a rate cut in May, with 94 basis points of cuts priced in for this year (nearer to Fed's own projection of 75 basis points of easing).
The yen fell 0.22% against the US dollar, breaking the 150 mark again - a level that puts the market on alert for possible intervention by Japan to weaken its currency as well as jawboning from officials. Earlier this week, Finance Minister Shunichi Suzuki said that while a weak yen has advantages and disadvantages, he is "more concerned" about the negative aspects of a weak currency. Since the beginning of 2024, the yen has declined by about 6% as investors have revised their expectations for a Fed rate cut. Meanwhile, Bank of Japan Governor Kazuo Ueda said today that the central bank will consider whether to maintain various monetary easing measures, including negative interest rates, when it becomes possible to sustainably achieve the inflation target.