| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | Australia | Producer price index, q / q | Quarter II | 0.9% | 1% | 1% |
| 06:30 | Switzerland | Consumer Price Index (MoM) | July | 0% | -0.2% | -0.2% |
| 06:30 | Switzerland | Consumer Price Index (YoY) | July | 1.3% | 1.3% | 1.3% |
During today's Asian trading, the US dollar declined moderately against major currencies, partially reversing yesterday's gains driven by increased demand for safe-haven assets due to rising geopolitical tensions.
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 0.19% to 104.22, as market participants adjusted their positions ahead of the release of key US labor market data for July. Although job growth remained above 200,000 in June, the increase over the previous two months was significantly revised downward (-111 thousand in net terms), and the June increase was mainly concentrated in the less sensitive to cyclical changes in sectors of public administration and healthcare. The most obvious sign of the cooling of the labor market was the increase in unemployment to 4.1%, which is almost 0.5% higher than at the beginning of the year. The expected increase in the number of jobs by 175 thousand in July will still be a decent increase, but it will emphasize that the overall situation in the labor market is deteriorating. The average hourly wage is expected to have increased by 0.3% in July, bringing the annual rate to 3.7% (more than a three-year low). Meanwhile, the unemployment rate is likely to remain unchanged at 4.1%. Experts warn that an upside surprise in the NFP headline figure and wage inflation data will reduce the likelihood of an additional rate cut this year, and give a boost to the US dollar. According to the CME FedWatch Tool, markets see a 100% probability of a rate cut in September, and a 100% probability of monetary policy easing in November, with about 86 basis points worth of cuts priced in for the rest of the year.
The pound fell to its lowest level since July 3 against the US dollar, but then returned to the opening level of the session. The pound continues to be pressured by the outcome of the Bank of England meeting, which yesterday began its interest-rate cutting cycle in a finely balanced decision. BoE Governor Bailey led a 5-4 decision to reduce rates by a 0,25% to 5%, and said the central bank would move cautiously going forward.
The yen rose 0.3% against the US dollar amid flows into safe-haven assets. Meanwhile, Japanese Finance Minister Suzuki said that the government will continue to analyze the impact of the sudden strengthening of the yen on the country's economy. Suzuki said that the strengthening of the yen has both positive and negative consequences, although rapid fluctuations in exchange rates can increase uncertainty in business activity and negatively affect people's lives. Suzuki also commented on the potential increase in debt servicing costs after the tightening of the monetary policy. "The government must ensure that it can finance the necessary expenses, even if debt-related payments increase and additional efforts are needed to improve the financial condition," the finance minister said. Given that the Bank of Japan plans to significantly reduce bond purchases, the government also needs to implement a robust debt management policy in the future, Suzuki said.