According to the FedWatch tool, 97% of the market expects the regulator to keep rates unchanged next week. As a result, the US dollar weakened amid optimistic sentiment in the equity markets.

However, the greenback was still trading above 103.5 near its 6-month high today. The US dollar index moderately declined in a narrow range of 105.2-105.4.

On the other hand, the strong US economy continues to support the rise in Treasury yields and favors US dollar bulls.

The Japanese yen is also acting as a safe-haven asset. It looks much weaker than the dollar in this regard. The yen's strength was also short-lived after comments from Bank of Japan governor Kazuo Ueda earlier this week.

The policymaker suggested that the country's economic conditions would allow the regulator to move away from its ultra-loose stance at the end of the year. The dollar/yen pair stopped reacting to Monday's promises and resumed its upward momentum on Friday.

Since the beginning of 2023, this trend confirms strong bullish momentum. If the bullish pressure intensifies, the yen may weaken to 148.0. In case of a decline, the first technical support awaits the pair at 145.9.

At the end of the week, there will be no publication of the most important economic data in Japan, so the Japanese currency completely depends on its US counterpart. While waiting for new data on the US economy, the pair is consolidating in a narrow range of 147.3-147.8.

Notably, yesterday's reports on Japanese core machinery orders slumped on a monthly and yearly basis. The fresh data failed to support the Japanese currency against the backdrop of the Bank of Japan's ultra-loose monetary policy.

Meanwhile, a batch of economic data from China supported the yuan as well as the Australian and New Zealand dollars. As a result, the Asian morning saw an uptick in sentiment for the antipodean markets.

At the same time, the Australian dollar approached the 2-week high and even managed to pierce the high of 0.647. In fact, the aussie has been attracting bulls for the second day in a row and was trading higher in the range of 0.6430-0.6475 today. However, the aussie/dollar pair requires some caution when trading.

Especially since the fundamental background is still on the side of the greenback. The US economic data that will be released later today may push the Australian currency down.

A similar situation is unfolding on the chart of the New Zealand dollar. On Friday, the kiwi began with an uptrend. However, the currency dropped below 0.5935 and began to decrease. Despite the green price range of 0.5902-0.5939, the kiwi ended the Asian session declining in the area of 0.5915.



00:00 Intro
00:39 CHINA INDUSTRIAL PRODUCTION
01:00 The results of Beijing's support measures
01:47 China's struggling real estate sector
02:29 USDX
03:25 The Japanese yen
03:59 USD/JPY
04:58 AUD/USD
05:55 NZD/USD
06:25 New Zealand

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