Asia FX flat in anticipation of CPI data in U. S.
2023.01.11 00:46
Asia FX flat in anticipation of CPI data in U. S.
By Kristina Sobol
Budrigannews.com – While the dollar recovered from recent losses, Asian currency markets edged lower on Wednesday as traders avoided risk-driven assets in anticipation of economic cues from key inflation readings this week.
Regional units fell amid uncertainty regarding the course of U.S. monetary policy after making a strong start to the week on optimism regarding a Chinese reopening. After comments from some members of the Federal Reserve reiterated that U.S. interest rates could rise more than anticipated this year, particularly if inflation remains above the central bank’s target range for a longer period of time than anticipated, the dollar also recovered from its seven-month low.
The and demonstrated that on Wednesday, the dollar was trading 0.1% higher against a basket of currencies. Now, the focus is on the United States’ December data, which are expected to show that inflation eased further from the previous month.
However, despite being released this week, expectations that the could resort to more hawkish measures to support the currency and quell overheated inflation increased as the fell by 0.1% against the dollar.
remained close to five-month highs, as optimism over the country’s relaxation of most COVID restrictions had helped the currency make a strong start to the year. However, this optimism was dampened when China experienced its most severe COVID-19 outbreak yet, which is anticipated to further impede economic expansion in the near future.
Even though deflationary trends are anticipated due to the country’s slowing economic growth, this week’s focus is also on the Chinese for December.
After data showed that in the country, in November, rose back to 30-year highs, the was one of the few exceptions for the day, rising 0.3 percent and remaining close to a high of four months. The reading is likely to get the attention of the for more policy tightening, which will raise the dollar.
Separate data also indicated that grew more than anticipated throughout the month, buoyed by increased Black Friday sales.
The and fell 0.3 percent and 0.2 percent, respectively, in Southeast Asian currencies that were more vulnerable to risk.
After soaring to a one-month high against the dollar earlier this week, the dropped 0.1 percent. Also on Thursday, data from India is expected to show that price pressures remained constant in December.
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