During today's Asian trading, the US dollar was almost unchanged against major currencies amid a lack of new catalysts and low trading activity during the holiday period.
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 0.03% to 108.17. It has been essentially in a holding pattern around 108 all week, with many traders on holiday around Christmas and the New Year. Meanwhile, since the beginning of December, the index has added 2.3%, and is preparing to record the third monthly increase in a row amid increasing expectations of a slower Fed monetary policy easing cycle next year. Last week, Fed Chairman Jerome Powell said that the Central Bank "will be cautious about further rate cuts". In addition, economists believe that Trump's looser regulations, tax cuts, tariff hikes and tougher immigration policies will boost both growth and inflation. According to the CME FedWatch Tool, markets see a 10.7% probability of a 0.25% rate cut in January (compared to 8.6% a week ago), while the probability of an additional rate cut in March is 43.7%.
The yen rose 0.1% against the US dollar after falling 0.38% yesterday to its lowest since July 17. The yen was supported by statements by the Japanese Finance minister, who said that the government was "alarmed by changes in the foreign exchange market and would take appropriate measures against excessive movements". Meanwhile, a summary of opinions from the BOJ's December policy meeting showed that some officials are becoming more confident of a rate hike in the near term, while others remain cautious amid uncertainty about wage dynamics and the policies of the new Donald Trump administration.