Asia FX big losses for the week
2023.01.20 03:06
Asia FX big losses for the week
By Ray Johnson
Budrigannews.com – Following hawkish remarks from a number of Federal Reserve officials and growing concerns regarding a possible recession this year, the majority of Asian currencies experienced a decline on Friday and were anticipated to end the week lower.
This week, currencies that are exposed to China performed poorly, despite earlier data indicating that the nation’s economy was beginning to pick up following the lifting of most anti-COVID restrictions.
Additionally, traders are preparing for a significant economic boost from the Lunar New Year holiday, which lasts for a week and begins on January 23.
The shed 0.4% on Friday and was also down for the week, while the was expected to lose 1.3% this week.
As it straddles the line between bolstering economic growth and maintaining the strength of the yuan, the People’s Bank of China maintained its benchmark at historic lows for the fifth consecutive month on Friday.
Even after the majority of restrictions have been lifted, China’s near-term economic prospects have been cast into doubt by an increase in COVID-19 cases.
On Friday, the lost 0.5 percent and was one of the Asian currencies that performed the worst this week, losing 0.8 percent. earlier in the day, data indicated, reached a 41-year high in the nation in December.
After defying market expectations for a further widening of its yield curve control policy earlier this week, the yen experienced a sharp decline. However, amid speculation that high inflation may prompt the BOJ to adopt a more hawkish stance later this year, the currency recovered most of those losses.
On Friday, a number of Federal Reserve officials issued a warning that even though the central bank is likely to slow its pace of interest rate hikes, borrowing costs are likely to remain elevated for a longer period of time. As a result, broad Asian currencies fell. The lost 1% and 0.2 percent, respectively.
However, dollar gains were limited as a slew of data this week demonstrated that the U.S. economy is slowing as a result of high inflation and tight monetary policy. The and were expected to finish the week largely flat after hovering around a 7-12 month low on Friday.
The possibility of a global recession this year is now priced in by the markets, particularly if the Fed keeps raising interest rates. Even though this would be bad for the dollar, it would probably also hurt Asian currencies.
More:
Dollar strengthens on Asia FX due to changing market sentiment
U. S. dollar accelerates the fall
Bank of Japan helps yen to reduce losses
