| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | China | PPI y/y | June | -1.4% | -0.8% | -0.8% |
| 01:30 | China | CPI y/y | June | 0.3% | 0.4% | 0.2% |
| 02:00 | New Zealand | RBNZ Interest Rate Decision | | 5.5% | 5.5% | 5.5% |
During today's Asian trading, the US dollar consolidated against major currencies, remaining near a three-week low amid cautious statements by Fed Chairman Powell.
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 0.02% to 105.11. Yesterday, Powell said that the data for the first quarter did not give Fed policymakers confidence that it was necessary to lower interest rates. He also reiterated that lowering rates is not advisable until the Fed has "greater confidence" that inflation is steadily approaching the target level (2%). At the same time, Powell warned that easing policy too early and too much could damage the progress made on inflation, while easing too late or too little could unduly weaken the economy. Now investors' attention is turning to the US CPI data for June, which will be published on Thursday. Economists expect annual inflation to fall from 3.3% in May to 3.1% in June. This will mark the lowest reading since January and is expected to strengthen markets' bets that the Fed will approve the first of its long-awaited interest rate cuts at a meeting in mid-September. According to the CME FedWatch Tool, markets see a 4.7% probability of a 25 basis point rate cut at the Fed meeting in July, a 73.3% probability of a rate cut in September, and a 85.0% probability of monetary policy easing in November.
The New Zealand dollar fell 0.6% against the US dollar, retreating from a 3-week high reached on Monday. The fall in the currency was caused by the results of the meeting of the Reserve Bank of New Zealand, which again left the interest rate at 5.5%, but signaled the possibility of easing monetary policy if inflation is slow as expected. "Restrictive monetary policy has significantly reduced consumer price inflation, with the committee expecting headline inflation to return to within the 1 to 3 percent target range in the second half of this year," the central bank said. At the previous meeting in May, policymakers had flagged the potential for an additional rate hike.