Asian session review: the US dollar traded steadily against major currencies

During today's Asian trading, the US dollar consolidated against major currencies, remaining near its lowest level since January 15, while the yen rose 0.2% amid increased expectations that the Central Bank of Japan will abandon negative interest rates at the March meeting. Japan's GDP data for the 4th quarter also came into focus, indicating that the country avoided a technical recession. GDP expanded a seasonally adjusted 0.1% q/q. That was shy of forecasts for an increase of 0.3% following the 0.7% contraction in Q3.

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 0.01% to 102.72. Last week, the index fell by 1.11% on the back of dovish statements by Fed Chairman Powell and data on the US labor market, which slightly increased the likelihood that the Fed will begin to cut interest rates in June. According to the CME FedWatch Tool, markets see a 25.1% probability of a 25 basis point rate cut at the Fed meeting in May, and a 73.9% probability of a rate cut in June. Tomorrow's U.S. consumer price data will be the next test of market pricing, ahead of the next Fed meeting on March 19-20. The January CPI data was stronger than expected and renewed concerns about how quickly inflation could fall. Despite the strong start of the year, experts believe that the downward trend in inflation will continue. Most likely, the February data will show that although inflation remains depressingly high, the overall trend is not strengthening. Economists expect the overall consumer price index to rise by 0.4% m/m in February - partly due to a jump in gasoline prices - but the annual rate remained at 3.1%. However, the core consumer price index likely eased in February - experts forecasting a monthly increase of 0.3% and a decline in the annual figure to 3.7%.