| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | United Kingdom | HICP, Y/Y | November | 2.3% | 2.6% | 2.6% |
| 07:00 | United Kingdom | HICP ex EFAT, Y/Y | November | 3.3% | 3.6% | 3.5% |
| 07:00 | United Kingdom | HICP, m/m | November | 0.6% | 0.1% | 0.1% |
During today's Asian trading, the US dollar consolidated against major currencies, remaining near a 3-week high, while market participants are preparing for the announcement of the results of the Fed meeting.
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 106.98.
Economists expect the Fed to cut the interest rate again at the end of the December meeting, by 0.25%, with markets pricing in a 97% probability, according to the CME's FedWatch tool. But the key for investors will be new economic projections for 2025, namely how much further Fed officials think they will reduce rates next year. The current dot plot projects the Fed to deliver four 25 bp cuts next year. Experts said that the strength of the economy increases bond yields and supports the dollar, and therefore the neutral setting for rates may be higher than first thought. Fed officials' median long-run interest rate projection was 2.9% in September. Market pricing implies almost no chance of rates being that low by December next year. Against this background, the Fed is likely to be more concerned about the resumption of inflation and signals a very cautious approach to policy easing in the future. Investors are also assessing the possible impact of tariffs and tax cuts promised by the new Trump administration on the Fed's policy prospects.
The Australian dollar fell by 0.35% against the US dollar, reaching its lowest value since October 2023, as more optimistic economic news from the US boosted investor demand for the US dollar. Investors are also adjusting their positions ahead of the Fed meeting.
The yen declined 0.1% against the US dollar after rising 0.43% yesterday. Market participants have significantly lowered their bets that the Bank of Japan will tighten monetary policy at tomorrow's meeting amid numerous media reports indicating that the central bank may take a cautious position. Experts said that if the Bank of Japan refuses to raise the rate, the head of the Central Bank will still announce a further rate increase, which will help support the yen.