| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | Australia | Trade Balance | April | 4.841 | 5.50 | 6.54 |
| 06:00 | Germany | Factory Orders s.a. (MoM) | April | -0.8% | 0.3% | -0.2% |
During today's Asian trading, the US dollar consolidated against major currencies as recent economic data increased uncertainty about the timing of the Fed's monetary policy easing.
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 0.03% to 104.23. Yesterday, the index rose by 0.14%, as ADP employment data, which pointed to further easing in labor market conditions in May, was offset by a strong ISM report. The ISM said that the services sector returned to expansion territory in May after a short-term contraction a month earlier - the non-manufacturing index rose to 53.8 from 49.4 in April. The May indicator, which became the highest since August 2023, exceeded the expectations of economists, who predicted an increase to 50.5. Tomorrow, a key report on the US labor market for May will be published, which may be decisive for the Fed in determining the further course of monetary policy. According to the CME FedWatch Tool, markets see a 18.3% probability of a 25 basis point rate cut at the Fed meeting in July, a 68.1% probability of a rate cut in September, and a 80.5% probability of monetary policy easing in November.
The euro rose 0.1% against the US dollar, while investors are preparing for the ECB meeting, the results of which will be announced at 12:15 GMT. Experts believe that the ECB will cut interest rates today, as inflation is moving in the right direction and economic growth prospects remain subdued. Policymakers were well informed about the easing of the ECB's policy in June, and experts expect the rate to be cut by 25 basis points. At the same time, policymakers are likely to try to show a certain "hawkish" attitude and caution when providing further guidance on the possibility of additional rate cuts in the future. Since the ECB lowers interest rates earlier than the Fed, the possibility of currency depreciation may contribute to the resumption of inflationary pressures, and this situation is likely to be avoided by policymakers. Expressing caution and dependence on data can be used as a tool to prevent excessive depreciation of the euro due to the fact that the ECB will cut the rate earlier than the Fed. The May consumer price index data should also reinforce the ECB's need for caution. This data was higher than expected, especially for core inflation. Although the eurozone has made more progress in bringing inflation back to target levels than the US, the May data still suggests that the work is not yet complete.