Asian currency market corrects after falling
2022.11.21 23:55
Asian currency market corrects after falling
Budrigannews.com – Despite hawkish remarks from some officials of the Federal Reserve and concerns about rising COVID-19 cases in China, markets remained subdued on Tuesday as the majority of Asian currencies recovered from sharp declines in the previous sessions.
Climbed 0.2% to 7.1518 against the dollar, rebounding from a 10-day low despite the People’s Bank’s slightly bearish midpoint fix.
However, as the world’s second-largest economy battled its worst COVID outbreak yet, sentiment toward it remained subdued.New lockdown measures were implemented in several economic centers, including Beijing and Shanghai, in response to record-high daily infections.
Given that the nation serves as a major trading partner for the majority of the region, this affected sentiment toward broader Asian currencies this week.On Monday, the currencies of China-exposed nations like South Korea and Singapore saw sharp declines.
Following a slew of hawkish signals from some Fed officials, the and held steady on Tuesday after rallying 0.8% overnight.
Mary Daly, president of the San Francisco Fed, said on Monday that the central bank still needs to tighten monetary policy more to reduce inflation, and Loretta Mester, chief of the Cleveland Fed, said she supports a 50 basis point rate increase in December.
However, according to both speakers, the Fed’s approach to interest rates will largely depend on how inflation develops in the coming months.
Even though inflation eased more than anticipated in, it remained well above the Fed’s target, likely prompting the bank to act again.The dollar is expected to rise as a result, putting pressure on Asian currencies in the near future.
For additional clues regarding U.S. monetary policy, focus now shifts to the, due on Thursday.
The was flat, while the gained 0.3 percent from a 10-day low on Tuesday.
In recent weeks, markets in India priced in a smaller interest rate hike by the in the coming months, which led to the Indian rupee falling behind its regional counterparts.
After a hotly contested general election that resulted in the country’s first-ever hung parliament, the fell 0.1 percent in Southeast Asia, extending losses.
