During today's Asian trading, the US dollar consolidated against major currencies amid a shortage of new catalysts. Investors are also being cautious ahead of the release of important US data that may affect the timing of the Fed's rate cut.
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 0.02% to 104.34. Yesterday, the index added 0.07%, while experts said that the market reaction to U.S. President Joe Biden's decision to bow out of the election race was muted, though there was some unwinding of the so-called Trump trade. As for the US data, PMI indices for July, GDP report for the 2nd quarter, as well as the June report on personal income and spending will be published later this week. If the growth of this indicator exceeds forecasts, the probability of easing the Fed's monetary policy in September is likely to decrease.
The yen rose 0.3% against the US dollar after rising 0.35% yesterday. The yen has found some support on the back of Tokyo's recent bouts of intervention. Market participants are also preparing for the meeting of the Bank of Japan, which will be held on July 31. Speculation continued over the chance of a rate hike at the July meeting. Questions also remain regarding the pace and scale of Japanese government bonds purchase cuts that the bank will announce this month.