| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 02:00 | China | Industrial Production y/y | November | 5.3% | 5.3% | 5.4% |
| 02:00 | China | Retail Sales y/y | November | 4.8% | 4.6% | 3% |
| 02:00 | China | Fixed Asset Investment | November | 3.4% | 3.4% | 3.3% |
During today's Asian trading, the US dollar fell slightly against major currencies, retreating from the 3-week high reached on Friday. The pullback was caused by partial profit-taking and correction of positions by investors ahead of the December Fed meeting, the results of which will be announced on Wednesday.
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 0.14% to 106.86. Last week, the index rose by 0.89%, recording the largest increase since mid-November. As for the Fed meeting, economies expect policymakers to cut interest rates again and signal a measured pace of easing for 2025. According to the CME FedWatch Tool, markets see a 97.1% probability of a 0.25% rate cut in December (compared to 84.7% a week earlier), while the probability of an additional rate cut in January is 16.6%. Meanwhile, today investors will focus on the PMI indices for December, which will help clarify the current state of the US economy. According to forecasts, the manufacturing PMI fell to 49.4 from 49.7 in November, and the services PMI fell to 55.7 from 56.1.
The yen consolidated against the US dollar after posting its biggest fall since September last week amid media reports that the Bank of Japan is unlikely to raise interest rates at its December meeting. However, experts point to the possibility of further rate increases in the new year. The economic grounds for further rate hikes still exist, and policymakers are simply taking a more gradual approach to the process of normalizing monetary policy. In terms of the economic rationale for raising rates, inflation and wage growth were boosted while economic growth continued to recover. Overall, the central bank is expected to raise the rate by 25 basis points in January and April 2025, bringing it to 0.75%.