| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | Australia | Retail Sales, M/M | April | -0.4% | 0.3% | 0.1% |
During today's Asian trading, the US dollar declined slightly against major currencies amid increased demand for risky assets. At the same time, investors are being cautious ahead of the publication of inflation data from the largest economies, which may affect further actions by Central Banks.
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 104.45, reaching its lowest level since May 20. This week, investors' main attention will be focused on the core personal consumption expenditure price index, which is the Federal Reserve's preferred measure of inflation. Economists expect that this indicator, which will be published on Friday, increased by 0.3% m/m in April after a similar increase in March. If the data exceeds forecasts, it will further reduce the likelihood of a Fed policy easing this year. According to the CME FedWatch Tool, markets see a 10.2% probability of a 25 basis point rate cut at the Fed meeting in July, a 49.4% probability of a rate cut in September, and a 61.7% probability of monetary policy easing in November.
The euro rose 0.2% against the US dollar, reaching its highest level since May 20, while market participants are preparing for the publication of inflation data for Germany (on Wednesday) and the eurozone (on Friday). These data will help to understand how the monetary easing cycle of the European Central Bank (ECB) may develop during this year. Given the significant progress in the fight against inflation, somewhat modest economic growth and clear signals from politicians, experts are confident that policymakers will announce a 25 basis point rate cut at their upcoming June meeting. Although it is unlikely that this week's inflation data will affect the forecast of a rate cut in June, it may be useful to assess the current forecast that ECB policymakers will suspend rate cuts in July before continuing in September. Economists expect that overall consumer inflation rose to 2.5% year-on-year in May, while core inflation remained at 2.7%.