Dollar is falling against Asian currencies
2023.01.02 03:33
Dollar is falling against Asian currencies
Budrigannews.com – As investors bet on slower interest rate hikes by the U.S. Federal Reserve and a weaker dollar, Monday’s holiday trading saw a slight rise in the majority of Asian currencies, indicating a positive start to the new year.
The currency maintained its strong gains from the previous week, climbing 0.1% to 130.96, its highest level against the dollar in five months. The currency lost more than 15% of its value in 2022, but it made up some of its lost ground toward the end of the year, especially after the unexpectedly struck a hawkish chord at its meeting in December.
Nonetheless, the COVID-19 pandemic uncertainty and high inflation continue to impede growth, so the Japanese economy faces additional challenges. That increased to a 41-year high in November, according to data from last month.
Offshore trade decreased by 0.1%, and economic data released over the weekend showed that the country’s economy contracted even more in December as a result of an unprecedented rise in COVID-19 infections. After it eased most of its anti-COVID measures in December, China saw a significant increase in COVID-19 cases.
However, as the nation emerges from nearly three years of stringent lockdown measures that had severely hampered growth, markets are positioning themselves for an eventual economic recovery.
The yuan, alongside most Asian monetary forms, logged steep misfortunes in 2022 as the started raising loan fees. This is generally anticipated to continue as interest rates in the United States are expected to remain high through 2023.
Due to new year’s holidays in most of the world, the and saw little trading on Monday. However, as the Federal Reserve embarked on one of its most aggressive rate-hike cycles to contain runaway inflation in 2022, the dollar gained nearly 8%.
Despite this, data that indicated that the dollar’s peak likely has passed has led to a decline in the currency in recent months, which is expected to prompt the Federal Reserve to slow down its rate hikes. In December, the central bank raised interest rates by only 50 basis points, and it will do so again in February.
After suffering severe losses in 2022, the currency experienced pressure primarily from India’s large trade deficit and reliance on oil imports. Although the nation’s economy performed well in 2022, questions are beginning to surface regarding whether this outperformance will continue into the following year.
After data showed that the country’s remained negative in December, with both and significantly decreasing, the fell 0.6%.
More ECB Head Lagarde says the Euro remains attractive
