During today's Asian trading, the US dollar consolidated against major currencies, remaining near the lowest level of 2024 reached last week.
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 0.03% to 100.67. Last week, the index fell by 1.68%, recording the 5th consecutive weekly decline amid dovish statements by Fed Chairman Jerome Powell. Although Fed officials had sounded increasingly dovish in the lead up to the Fed's annual Jackson Hole symposium, Powell on Friday "used stronger language" than his peers, keeping the door open to larger rate-cut increments. According to the CME FedWatch Tool, markets see a 38.5% probability of a 0.5% rate cut in September (up from 24% the week before), and a 61.5% probability of a 0.25% rate cut (down from 76.0% the week before), with a 1% rate cut expected by the end of the year.
The yen rose 0.4% against the US dollar, reaching its highest level since August 5, helped by the "hawkish" position of the head of the Bank of Japan Kazuo Ueda. Speaking on Friday, Ueda stuck to the scenario that the Bank of Japan needs to adjust the degree of easing – the Central Bank is in favor of further rate hikes - and he downplayed the significance of the July rate hike amid market turmoil. Many market participants expected that Ueda could take a less hawkish position at a special session of parliament, which was convened amid criticism of the unexpected rate hike last month.