Asian session review: the dollar rose slightly against most currencies

During today's Asian trading, the US dollar rose slightly against the euro and the yen, but fell against the Australian and New Zealand dollars.

The focus of traders this week is on US GDP data for the first quarter of 2021. As part of the GDP report, the dynamics of the PCE Core index, a key indicator of inflation tracked by the Federal Reserve System (Fed), is traditionally published. The consensus forecast of experts provides for the growth of the PCE Core index in the first quarter by 2.3%,. In the fourth quarter of last year, the index increased by 1.3%. Traders are closely watching the inflation figures, believing that the acceleration in consumer price growth, together with the improvement in the labor market and the economy as a whole, may force the Federal Reserve System (Fed) to start scaling back stimulus earlier than markets expected.

Fed Vice Chairman Richard Clarida said yesterday that the Fed could begin discussions on reducing the volume of asset repurchases under the quantitative easing (QE) program at the next meetings, as the US economy is recovering quickly from the coronavirus pandemic.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.03%.

The New Zealand dollar rose more than 1% against the US dollar on the back of the results of the RBNZ meeting. New Zealand's central bank held interest rates, but hinted at a hike as early as September next year. The hawkish stance contrasts with persistently dovish comments from the U.S. Federal Reserve and the neighbouring Reserve Bank of Australia, which has said there would be no rate rises until 2024 at the earliest. The Reserve Bank of New Zealand (RBNZ) held rates at a record low 0.25%, but said it sees at least one 25 basis point rate hike by September 2022.