Asia FX flat in anticipation of key economic events
2023.02.01 01:21
Asia FX flat in anticipation of key economic events
By Ray Johnson
Budrigannews.com – On Wednesday, markets positioned for an interest rate hike and a potentially hawkish message from the central bank saw the dollar rise while the majority of Asian currencies moved little in anticipation of a Federal Reserve meeting.
The and advanced approximately 0.1 percent each, indicating a slight strengthening of the dollar against a basket of currencies.
After U.S. inflation decreased over the past few months, it is generally anticipated that the Federal Reserve will. However, given that recent data indicated some resilience in the U.S. economy, comments from Fed Chair Jerome Powell on the path of monetary policy will be closely watched.
Additionally, investors anticipate Powell to address the recent market rally.
Given that it indicates a further narrowing of the gap between low-risk and risky debt yields, a hawkish Fed outlook is likely to weigh on Asian currencies.
Traders weighed conflicting data on the nation’s manufacturing sector on Wednesday, which led to a 0.1% increase to approximately 6.7492 against the dollar. While government data showed on Tuesday that the, a private survey showed that as it eases away from restrictions imposed three years ago to combat COVID,
Still, in January, the yuan reached a seven-month high due to optimism regarding a Chinese economic recovery.
Following a weak reading on Tuesday, data showed that the country’s shrank even more in January.
In addition, the Bank of Japan is the focus of attention as it prepares to appoint a new governor in advance of a widely anticipated change in monetary policy.
Despite data showing that the country’s trade deficit significantly worsened in January, the increased by 0.2 percent. However, South Korea’s finance minister, Choo Kyung-ho, stated that China’s reopening this year will benefit the nation.
A lot of Asian economies, which rely on China as a trading partner, stand to gain from the Chinese economy recovering. However, the country is still dealing with the worst COVID-19 outbreak in its history, which may put off a full recovery.
Before the and this week’s decisions on interest rates, the and were also flat against the dollar elsewhere. The interest rates at each bank are expected to rise by 50 basis points.
