Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the US dollar rose slightly against major currencies, while market participants are preparing for the publication of important US data that may affect the prospects for Fed monetary easing.

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 0.11% to 106.19. As for the data, a preliminary estimate of GDP for the 1st quarter will be published on Thursday, and on Friday the personal consumption expenditures price index, the Fed's preferred inflation indicator, will be released. Earlier this month, data indicating sustained inflation in the United States along with continued economic growth forced markets to reconsider expectations of a Fed interest rate cut. According to the CME FedWatch Tool, markets now fully account for just one rate cut this year (markets see a 15.2% probability of a 25 basis point rate cut at the Fed meeting in June, and a 41.5% probability of a rate cut in July). The move is expected to take place in September at the earliest - that is, after similar actions by the European Central Bank and the Bank of England, which are expected to begin easing policy in the summer.

The yen rose 0.1% against the US dollar to 154.71, but remains near a new 34-year low reached yesterday (154.85). Traders are cautiously watching the fall of the yen to the level of 155.00, which, according to many participants, may cause intervention by the Japanese authorities. Japan's finance minister said a meeting last week with his US and South Korean counterparts laid the groundwork for Tokyo to take action against excessive yen movements, issuing the most serious warning about the possibility of intervention. However, there are doubts about whether Tokyo will act ahead of the Bank of Japan meeting, the results of which will be announced on Friday. The Bank of Japan is expected to indicate in new forecasts that inflation will remain at 2% for the next three years, signaling its readiness to raise interest rates again this year.