Dollar falls on Asia FX trading session
2023.01.23 03:06
Dollar falls on Asia FX trading session
By Kristina Sobol
Budrigannews.com – The dollar weakened further on Monday as investors increased their bets that the Chinese economy will recover this year and turned their attention to important U.S. data due this week.
Since most markets were closed for the Lunar New Year, there was little volume traded in the region. However, following the country’s reopening of its borders and the relaxation of the majority of anti-COVID measures, markets are betting on a significant boost to the Chinese economy from the weeklong holiday.
The remained unchanged during holiday trading, while the gained 0.2% to a rate that was better than its onshore counterpart against the dollar.
On expectations of more hawkish actions from the, the was one of the best performers for the day, rising 0.3 percent and remaining close to an eight-month high against the dollar.
The yen has surged since the BOJ modified its yield curve control measures in December, despite the fact that the central bank maintained its ultra-accommodative policy earlier this week. In light of the significance of the BOJ’s policy shift, the minutes of the December meeting of the central bank revealed that government officials had requested a brief adjournment to contact their respective ministries.
Markets are now betting that the central bank will eventually tighten policy as a result of rising inflation, which has significantly boosted the yen in recent weeks.
The and were brought down by the yen’s strength. With hawkish signals from the European Central Bank also weighing, both greenback indicators fell 0.3%.
On Monday, the and added 0.2 percent to other Asian currencies.
This week, the United States’ due date is the primary focus. As the effects of tight monetary conditions begin to show, the reading is expected to show a further slowdown in growth from the previous quarter. This could signal a slowdown in the world’s largest economy.
The majority of regional currencies also benefited from growing bets that the will slow its pace of rate hikes to prevent further economic destruction, despite the fact that a recession in the United States bodes poorly for Asian currencies.
On that idea, the yields on the dollar and the Treasury note decreased.
