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 await new catalysts, which could come from today's US data on the housing market and the labor market.

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 0.09% to 105.35. As for the data, economists expect that in May building permits rose to 1.45 million from 1.44 million in April, while housing starts increased to 1.37 million from 1.36. Also today, a report on initial jobless claims for the past week will be presented. Consensus estimates suggest that initial jobless claims fell to 235 thousand from 242 thousand a week earlier. Meanwhile, the PMI indices will be presented tomorrow. All these data will help clarify the current state of the economy and may affect the prospects for the Fed's monetary policy. According to the CME FedWatch Tool, markets see a 10.3% probability of a 25 basis point rate cut at the Fed meeting in July, a 65.9% probability of a rate cut in September, and a 78.2% probability of monetary policy easing in November.

The pound fell 0.1% against the US dollar as investors remain cautious ahead of the Bank of England meeting. Economists expect the Bank of England to leave the interest rate at 5.25%. But market participants will be closely monitoring any "dovish" forecasts that may indicate a potential start of monetary policy easing in the coming months. Although yesterday's data showed that British inflation returned to the 2% target in May for the first time in almost three years, details of the report pointed to persistent underlying price pressures - ruling out chances of an early rate cut. Overall, economists expect the central bank to implement an initial rate cut of 0.25% at its August meeting.