| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 02:00 | New Zealand | RBNZ Interest Rate Decision | | 5.5% | 5.5% | 5.5% |
During today's Asian trading, the US dollar consolidated against major currencies, as market participants took a wait-and-see attitude ahead of the publication of US inflation data, which will provide additional clues about the Fed's policy course.
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 0.01% to 104.15. The latest US data raises questions on how soon and how much the central bank will cut rates this year. Today's CPI report, which will be released at 12:30 GMT, will assess the Fed's success in curbing inflation, as well as clarify the timing of the Fed's monetary policy easing. Consensus estimates suggest that in March, the CPI increased by 0.3% m/m and 3.4% per annum, and the core CPI increased by 0.3% compared to February and by 3.7% per annum. Experts said that a stronger-than-expected increase in inflation could further reduce the likelihood of a Fed rate cut in June, as well as trigger a dollar rally. Even if the data comes in below expectations, the dollar may only dip modestly, with June bets likely to be little changed as hurdles remain. According to the CME FedWatch Tool, markets see a 6,3% probability of a 25 basis point rate cut at the Fed meeting in May, and a 54.0% probability of a rate cut in June (compared to 62.3% a week earlier).
The New Zealand dollar rose markedly against the US dollar, reaching its highest level since March 21, helped by the results of the meeting of the Reserve Bank of New Zealand. As expected, the Central Bank left the interest rate at 5.5%, and said that the previous tightening of monetary policy had helped slow down the economy and curb price growth. However, the Central Bank warned that inflation remains above the target level. Such a statement suggests that the rate will need to remain restrictive for some time yet. Currently, investors estimate a 92% probability that the Central Bank will cut the rate in August. They see an easing of 60 basis points this year, down slightly from 63 bps before the decision.