Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the US dollar rose slightly against major currencies, while investors took a wait-and-see attitude ahead of the release of US data.

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 0.09% to 105.42. As for the data, the retail sales report for May will be presented today at 12:30 GMT. Retail sales fell short of expectations in April, and real personal consumption of durable goods was sharply revised downward, showing a contraction of almost 2% per annum for the first quarter. The reduction in spending on household goods confirms the concern of retailers, who have warned investors and politicians that the number of buyers has decreased and they have become price sensitive, as a result of which some of them have switched to cheaper goods. Economists expect consumption to grow at a more modest pace in the second half of the year. The level of personal savings decreased, the growth of consumer lending slowed due to an increase in overdue debts, and the growth of real disposable incomes weakened against the background of a slowdown in the labor market. These growing obstacles have put pressure on discretionary spending, which is likely to hold back retail sales growth in the coming months. Department store sales were unchanged in May, while car sales rose slightly. According to forecasts, retail sales increased by 0.3% in May after being unchanged in April. In addition to the data, investors will analyze speeches by Fed policymakers today, including the Boston Fed's Susan Collins and the Richmond Fed's Thomas Barkin, which may clarify the timing and pace of interest rate cuts. According to the CME FedWatch Tool, markets see a 8.3% probability of a 25 basis point rate cut at the Fed meeting in July, a 61.5% probability of a rate cut in September, and a 74.9% probability of monetary policy easing in November.

The Australian dollar rose 0.2% against the US dollar, helped by the results of the RBA meeting, which has kept interest rates at 4.35% (a 12-year high), but warned that it still needs to be vigilant about inflation risks. The Central Bank also reiterated that it was not ruling anything in or out on policy. "The economic outlook remains uncertain, and recent data have shown that the process of returning inflation to the target level is unlikely to be smooth. Meanwhile, the revision of the level of consumption and savings indicates the persistence of risks to growth," the RBA said. Overall, most economists now expect the RBA to cut rates only in the 4th quarter of this year.