| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:00 | New Zealand | RBNZ Interest Rate Decision | | 5.25% | 4.75% | 4.75% |
| 06:00 | Germany | Trade Balance (s.a.), bln | August | 16.9 | 18.9 | 22.5 |
During today's Asian trading, the US dollar consolidated against major currencies, remaining near a 7-week high, while investors are cautious ahead of the publication of the minutes of the last Fed meeting and US inflation data that will help assess the interest rate outlook.
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 0.06% to 102.61. Later today (at 18:00 GMT), the minutes of the September Fed meeting will be presented, which will show discussions about what at the time had appeared to be a determining labor market that ended with all but one politician agreeing to a 0.5% cut. Meanwhile, the September US CPI report will be released tomorrow. The core CPI is expected to grow by 0.2% per month and 3.2% per annum in September. Meanwhile, lower prices at gas stations paved the way for a more significant decline in the overall consumer price index - the index is estimated to have increased by only 0.1% in September. If the forecast is confirmed, the overall inflation rate will drop to 2.3%, which corresponds to the inflation rate immediately before the pandemic in February 2020. But if the CPI data exceeds forecasts, this will cause a reassessment of the Fed's monetary policy prospects. According to the CME FedWatch Tool, markets see a 86.8% probability of a 0.25% rate cut at the November meeting (compared to 64.8% a week earlier) and a 78.5% probability of a 0.25% rate cut in December (compared to 35.7% a week earlier), with a 0.5% rate cut expected by the end of the year.
The New Zealand dollar fell 0.9% against the US dollar, reaching its lowest level since August 19 on the back of the results of the meeting of the Reserve Bank of New Zealand (RBNZ), which lowered interest rates by 0.5% to 4.75%, and indicated the possibility of even more aggressive monetary easing. Previously, the bank had reduced the interest rate by 0,25% in August, which was the first cut since March 2020. Policymakers observed that inflation is currently within the 1-3% target band and it is expected to converge to the 2% target midpoint. The committee discussed the benefits of both 0,25% and 0,5% cuts in the official cash rate. They said the key rate at 4.75% is still restrictive and leaves monetary policy well-placed to deal with any near-term surprises.