Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Asia FX edges higher, dollar mixed ahead of Fed cues, inflation data

Published 04/11/2023, 01:16 PM
Updated 04/11/2023, 01:16 PM
© Reuters

© Reuters

By Ambar Warrick

Investing.com -- Most Asian currencies rose slightly on Tuesday, while the dollar was somewhat mixed ahead of more cues on the U.S. economy and monetary policy from key inflation data due later this week.

Still, gains in regional currencies were limited following a string of less hawkish cues from local central banks, amid signs that inflation was peaking across a bulk of the region.

China’s yuan was flat as data showed consumer price index inflation in the country missed expectations in March, while producer price index inflation continued to fall. The reading pointed to a mixed economic rebound in the country, especially as its manufacturing sector struggles with slowing demand.

The reading also limits the potential for interest rate hikes by the People’s Bank of China, which is expected to dent the yuan’s appeal.

The Australian dollar jumped 0.4%, and was among the best performers for the day as data indicated an improvement in local consumer sentiment, after the Reserve Bank paused its rate hike cycle earlier this month.

The South Korean won rose 0.2%, even as the Bank of Korea kept interest rates steady for a second consecutive meeting on Tuesday. The bank had paused an over-year-long rate hike cycle amid cooling economic growth and retreating inflation.

The Indian rupee fell 0.1%, extending losses after the Reserve Bank of India unexpectedly held interest rates steady last week, and signaled an extended pause in its rate hike cycle on the grounds that inflation had peaked.

The dollar was mixed against a basket of currencies, with relatively strong nonfarm payrolls data fueling immediate demand for the greenback. The dollar index rose nearly 0.3%.

But dollar index futures fell 0.2%, and were also trading at a discount to the greenback’s current price amid expectations that the Federal Reserve has a limited amount of rate hikes left this year.

Focus this week is squarely on inflation data for March, as well as the minutes of the Fed’s March meeting. Both indicators are due on Wednesday, and are expected to provide more cues on the path of interest rates.

The Japanese yen rose 0.2% as improving sentiment dented the currency’s safe haven appeal. A dovish near-term outlook for Japanese monetary policy also kept appetite for the yen limited.

The Philippine peso rose 0.2% as data showed that the country’s industrial production blazed past expectations in February. But the country also logged an unexpected trade deficit during the month.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.