Asian session review: the US dollar is showing negative dynamics

During today's Asian trading, the US dollar declined slightly against major currencies, retreating from its highest level since August 15, reached yesterday. The correction was caused by a reassessment of the Fed's monetary policy prospects against the background of recent 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) decreased by 0.07% to 102.93. Yesterday, the index rose to 103.18. Experts said that signs of weakness in the US labor market increased arguments in favor of a faster Fed rate cut. However, stronger-than-expected CPI growth in September signaled that restrictive monetary policy may still be needed to control inflation. While the Fed has signaled a shift in its focus towards full employment over price stability, investors had been looking to the CPI print for confirmation that inflation was coming under control. Meanwhile, yesterday's statements by Fed policymakers also failed to clarify the situation. Chicago Fed President Austan Goolsbee said that the "vast majority" of policymakers expect rates to "gradually decrease to a level well below where they are today." However, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, advocated not lowering the rate at the November meeting. Today, investors will be watching the publication of the US producer price index for September, hoping to get additional clues about the Fed's actions. According to the CME FedWatch Tool, markets see a 84.3% probability of a 0.25% rate cut at the November meeting (compared to 94.4% a week earlier) and a 82.8% probability of a 0.25% rate cut in December (compared to 80.2% a week earlier).