During today's Asian trading, the US dollar consolidated against major currencies, remaining near its highest level since September 3, while investors took a wait-and-see attitude ahead of the release of new US economic data.
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 0.04% to 101.72
As for the data, the US producer price index for August will be presented at 12:30 GMT. Economists expect producer prices to rise by 0.1% m/m, as in July, but in annual terms, the growth rate accelerated to 2.5% per annum from 2.4% per annum. Also at 12:30 GMT, the initial jobless claims report for last week will be released, while consensus estimates suggest a slight increase - to 230 thousand from 227 thousand a week earlier. These data may provide clues about the scale of the Fed's monetary policy easing at the September meeting. According to the CME FedWatch Tool, markets see a 13% probability of a 0.5% rate cut in September (down from 40% the week before), and a 87% probability of a 0.25% rate cut (up from 60% the week before).
The euro rose 0.05% against the US dollar, but remained near a four-week low. Investors are preparing for the ECB meeting, the results of which will be announced at 12:15 GMT. Economists expect the ECB to further ease monetary policy and cut interest rates by 25 basis points. Recent economic news, although mixed, has been generally subdued, confirming the need for the ECB to ease policy this month. GDP in the second quarter grew by a moderate 0.2% compared to the previous quarter, while eurozone PMI have been mostly weaker in recent months, although they increased in August due to the Olympic Games. There was some encouraging news on the inflation front, as overall inflation slowed to 2.2% year-on-year in August. However, services inflation remains resilient, rising 4.2% in August, which argues against overly aggressive rate cuts. As for the ECB's statement, the central bank is expected to repeat that it depends on the data and will take a "meeting-to-meeting" approach. The ECB's updated economic forecasts will also be closely monitored. In its June forecasts, the ECB predicted CPI inflation excluding food and energy at 2.0% in 2026. This forecast is likely to remain unchanged or even rise slightly in the September forecasts.