FX market froze in anticipation of Fed meeting
2023.01.30 03:52
FX market froze in anticipation of Fed meeting
By Kristina Sobol
Budrigannews.com – The majority of Asian currencies strengthened in anticipation of a Federal Reserve meeting and a slew of economic data releases this week, and local markets in China saw a sharp rise in the Chinese yuan on Monday.
Bets that the Lunar New Year holiday would help China’s economy recover contributed to the increase of 0.4 percent. According to reports from state media, domestic travel and spending have significantly improved over the past week.
In order to determine whether the economy benefited from the lifting of restrictions on COVID, markets are now awaiting key business activity data from China this week. Although it is still anticipated to remain in contraction territory, analyst forecasts see an improvement in both and PMIs.
Given that China is battling its worst COVID-19 outbreak yet, traders are also uncertain about the timing of an economic recovery.
However, given that Asian markets rely on China as a trading partner, a recovery in the country’s economy bodes well for them. Oil and other commodities have already experienced sharp rises in recent sessions in anticipation of a rebound in Chinese demand.
In anticipation of this week, the dollar stabilized while the broad Asian currencies advanced slightly. Most people think that the central bank will raise interest rates by 25 basis points.
Nevertheless, given that recent data presented a somewhat mixed picture of the U.S. economy, the central bank’s forecast for monetary policy will be the primary focus.
Around 101.9, the and remained unchanged. This week, data from the United States and the euro area are also the focus.
The increased in tandem with Chinese markets, rising by 0.2 percent and adding 0.3 percent.
As data showed that inflation has eased in the country in recent months, the fell 0.2%, having largely lagged its peers in recent sessions.
