| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 03:00 | Japan | BoJ Interest Rate Decision | | 0.25% | 0.25% | 0.25% |
| 07:00 | Germany | Gfk Consumer Confidence Survey | January | -23.1 | -22.5 | -21.3 |
During today's Asian trading, the US dollar consolidated against major currencies after jumping 1% yesterday and reaching its highest level since November 11, 2022, amid the outcome of the Fed meeting and interest rate forecasts.
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 0.03% to 108.06. The Fed, as expected, lowered the interest rate by 0.25%, but signaled a higher the slow pace of monetary policy easing next year. The Fed indicated that it probably would only lower twice more in 2025, according to the closely watched “dot plot” matrix. The two cuts indicated a slice in half the committee’s intentions when the plot was last updated in September. “We moved pretty quickly to get to here, and I think going forward obviously we’re moving slower,” Fed Chair Jerome Powell said. The Fed also raised its projection for full-year 2024 GDP growth to 2.5%, 0.5% higher than September. However, in the ensuing years the officials expect GDP to slow down to its long-term projection of 1.8%. Meanwhile, the Fed lowered its expected unemployment rate this year to 4.2%, while headline and core inflation according to the Fed's preferred gauge were pushed higher to respectable estimates of 2.4% and 2.8%.
The yen fell 1.2% against the US dollar as the Bank of Japan left the monetary policy parameters unchanged following its December meeting and offered few clues on its monetary outlook. The pressure on the yen intensified after the head of the Bank of Japan, Kazuo Ueda, said that policymakers would need more time to assess incoming economic data and the consequences of Donald Trump's policies after his return to the White House in January. The central bank also said that it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices. "In particular, with firms' behavior shifting more toward raising wages and prices recently, exchange rate developments are, compared to the past, more likely to affect price," the bank said.