Asian session review: the US dollar is showing negative dynamics

During today's Asian trading, the US dollar declined slightly against major currencies, while market participants are cautiously awaiting the minutes of the January Fed 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 0.07% to 104.02. Yesterday, the index fell by 0.22% amid lower US Treasury yields. The minutes of the Fed meeting, which will be presented at 19:00 GMT, will provide more information about the prospects for Fed policy, while any hawkish position is likely to resume fluctuations in rates expectations. However, according to experts, the overarching FOMC minutes takeaway must be that it is not (yet) time to initiate a rate cut. According to the CME FedWatch Tool, markets see a 35.8% probability of a 25 basis point rate cut at the Fed meeting in May, and a 77.5% probability of a rate cut in June, with approximately 90 basis points of cuts priced in for this year.

The Australian dollar rose 0.25% against the US dollar, helped by Australian data. The Australian Bureau of Statistics said that in the 4th quarter, the wage price index increased by 0.9%. That was in line with expectations and down from 1.3% in Q3. On a yearly basis the wage price index climbed 4.2% - exceeding estimates for 4.1% and unchanged from the previous three months. Meanwhile, survey data from Westpac showed that Australia's leading index remained in negative territory in January signaling that the economy will continue to see sub-par growth well into 2024.

The yen fell 0.1% against the US dollar, to 150.15. In the past, traders have viewed 150 as a line in the sand that could trigger currency intervention from Japanese authorities.