| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 08:00 | Switzerland | KOF Leading Indicator | December | 96.7 | 96.9 | 97.8 |
During today's Asian trading, the US dollar declined slightly against major currencies, resuming its downward trend after yesterday's moderate increase. Experts said that the currency moves subdued amid a holiday lull leading up to the New Year.
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 101.16. Since the beginning of December, the index has fallen by 2.25% amid increased expectations that the Fed may proceed to ease monetary policy already at the March meeting. According to the CME FedWatch Tool, markets see a 72.8% probability of a 25 basis point rate cut at the Fed meeting in March 2024 and a 99.8% probability of a rate cut in May 2024, with over 150 basis points of cuts priced in for next year. According to Saxo Bank experts, the dollar is likely to come under pressure in 2024 as the Fed formally signals a dovish pivot, but we need to see how growth outside the U.S. transcends.
The euro rose 0.1% against the US dollar, and is preparing to end December with an increase of 1.65%. Meanwhile, the pound rose by 0.15%, and has gained 1.02% since the beginning of the month. While ECB and Bank of England policymakers did not signal any imminent rate cuts at their December meetings, traders continue to bet that a Fed pivot and the prospect of lower U.S. rates next year would give room for other major central banks to follow suit.
The yen rose 0.1% against the US dollar. Since the beginning of December, the yen has risen by 4.65%, but has significantly decreased since the beginning of the year (by about 7%) against the background of the Bank of Japan's ultra-loose monetary policy stance. While market expectations are for the Bank of Japan to exit negative interest rates in 2024, the Central Bank continues to stand by its dovish stance and has provided little clues on if, and how, such a scenario could play out.