Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the US dollar rose significantly against major currencies, and is preparing to record a second weekly increase in a row, as the U.S. economy is in a good spot and it doesn't look like the Fed needs to be in any hurry to cut rates.

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 0.86% to 104.30 (the highest value since February 20). Since the beginning of the week, the index has added 0.84%, helped by the results of the Fed meeting. The central bank, as expected, left the interest rate unchanged, and indicated that it still predicts three rate cuts by the end of the year. But it also said it will not start moving until it has more confidence that inflation is sustainably falling toward 2%. According to the CME FedWatch Tool, markets see an 9.0% probability of a 25 basis point rate cut at the Fed meeting in May, and a 72.2% probability of a rate cut in June (compared to 58.8% a week earlier), with about 80 basis points of cuts priced in for this year - much lower than the 160 or so that had been priced in at the start of the year.

The yen rose 0.15% against the US dollar, while investors analyzed Japan's inflation data. The Ministry of Internal Affairs and Communications said that in February, the national CPI increased by 2.8% per annum, as expected, after an increase of 2.2% per annum in January. On a monthly basis, inflation was flat for the second straight month. Core CPI, which excludes the volatile costs of food, was up 2.8% per annum - also matching forecasts and accelerating from 2% per annum in January.

The Chinese yuan fell by 0.35% against the US dollar amid expectations of policy easing in China. The Australian dollar was also under pressure, as Australia is a key trading partner of China - the AUD/USD fell by 0.8%.