| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 02:00 | New Zealand | RBNZ Rate Statement | | 5.50% | 5.50% | 5.50% |
| 06:00 | United Kingdom | HICP, Y/Y | April | 3.2% | 2.1% | 2.3% |
| 06:00 | United Kingdom | HICP ex EFAT, Y/Y | April | 4.2% | 3.6% | 3.9% |
| 06:00 | United Kingdom | HICP, m/m | April | 0.6% | 0.2% | 0.3% |
During today's Asian trading, the US dollar declined slightly against major currencies, while market participants analyzed the statements of Fed policymakers and prepared for the publication of the minutes of the Fed's May meeting, which may clarify the prospects for monetary policy 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) fell by 0.07% to 104.59. Investors have largely been shorting up U.S. rate cut bets after a milder inflation reading last week, even as Fed officials continued to sound a cautious note. Yesterday, Fed Board member Christopher Waller said he still needed to see several more months of good inflation data before he would consider lowering interest rates. He noted that the April CPI data indicate that progress towards the 2% target has probably resumed, but added that progress has been modest. In turn, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said that the Fed, in his opinion, should be careful about the first change in interest rates, and he would prefer to wait longer for a rate cut to ensure that inflation does not start to rise sharply. While markets remain hopeful that U.S. inflation will continue to cool, PCE data due on May 31 will be a crucial test for confirming those expectations. According to the CME FedWatch Tool, markets see a 0% probability of a 25 basis point rate cut at the Fed meeting in June, a 18.3% probability of a rate cut in July, and a 60.1% probability of monetary policy easing in September.
The New Zealand dollar fell 0.4% against the US dollar on the back of the results of the Reserve Bank of New Zealand (RBNZ) meeting. RBNZ, as expected, left the interest rate at 5.5%. The Monetary Policy Committee observed that inflation is likely to return to within the 1%-3% target range by the end of 2024. The welcome decline in inflation in part reflects lower inflation for goods and services imported into New Zealand. "However, services inflation is receding slowly, and expected policy interest rate cuts continue to be delayed," the bank said. "The Committee agreed that monetary policy needs to remain restrictive to ensure inflation returns to target within a reasonable timeframe," the bank added.
The pound rose 0.25% against the US dollar as the latest UK inflation data exceeded economists' forecasts and cast some doubt on the Bank of England cutting rates as soon as the next Monetary Policy Committee meeting in June.