Asia FX flat Australian dollar rises on RBA statements
2023.02.07 01:34
Asia FX flat Australian dollar rises on RBA statements
By Kristina Sobol
Budrigannews.com – In anticipation of Federal Reserve Chair Jerome Powell’s speech on Tuesday, most Asian currencies did not move much. However, the Australian dollar surged after the Reserve Bank raised interest rates and indicated that additional hikes were on the horizon.
The gained 0.7 percent to $0.6929, close to the crucial 0.7 level against the dollar. As anticipated, the raised interest rates by 25 basis points and hinted at additional increases to combat inflation.
In anticipation of additional economic cues from Powell later in the day, broad Asian currencies were muted. The dollar and Treasury yields rose last week as a result of stronger-than-expected data, so the Fed Chair’s remarks on inflation and monetary policy will be closely watched.
On Tuesday, the dollar lost ground against a basket of currencies, with the and both falling 0.1%. However, following the payrolls data, the majority of gains made since Friday were retained by both instruments.
Markets increased their expectations for additional Fed rate hikes this year in response to the payrolls data, which has a negative impact on the outlook for Asian currencies as the gap between risky and low-risk yields narrows.
The added 0.4%, while the gained 0.1% among regional currencies.
As news stories fueled speculation about the next Bank of Japan Governor, the gained 0.3 percent. According to Reuters, the candidates for governor to succeed Haruhiko Kuroda will be presented by next week.
The BOJ’s ultra-loose monetary policy must be balanced against rising inflation and market expectations for a hawkish pivot by Kuroda’s successor. However, the yen has benefited from speculation regarding the bank’s eventual hawkish inclination.
On Tuesday, Southeast Asian currencies with a lot of risk were the worst performers, falling 1% and 0.7 percent, respectively.
Despite a January inflation reading that was significantly higher than anticipated, the fell 0.9%. The reading not only indicates that the archipelago’s economy will be put under more pressure, but it is also anticipated to prompt additional interest rate hikes by the
As markets awaited a Reserve Bank of India meeting on Wednesday, the was muted. Before announcing a pause in its current rate hike cycle, the central bank is expected to do so one more time.
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