Most Asian currencies kept to a tight range on Thursday as investors digested mixed signals on U.S. monetary policy, while a market holiday in China kept trading volumes limited.<\/p>\n
Federal Reserve Chair Jerome Powell reiterated the bank\u2019s hawkish stance when testifying before the House Financial Services Committee of Congress on Wednesday, although he did not directly signal that interest rates will rise in July.<\/p>\n
This was also contradicted by other Fed members calling for an extended pause in the central bank\u2019s rate hike cycle to observe the effects of recent monetary policy tightening.<\/p>\n
The mixed signals weighed on the dollar, with the\u00a0dollar index<\/a><\/span>\u00a0and\u00a0dollar index futures<\/a><\/span>\u00a0falling slightly in Asian trade after overnight losses.<\/p>\n But Asian currencies took little advantage of weakness in the dollar, with Powell set to\u00a0testify before the Senate Banking Committee<\/a><\/span>\u00a0later in the day.<\/p>\n A dearth of local economic cues, amid a Chinese market holiday, also saw regional currencies mark small moves.<\/p>\n The\u00a0South Korean won<\/a><\/span>\u00a0fell 0.2%, while the\u00a0Indonesian rupiah<\/a><\/span>\u00a0rose 0.2% ahead of an interest rate decision in the country later on Thursday. The\u00a0Indonesian central bank<\/a><\/span>\u00a0is widely expected to hold rates steady, as inflation retreated in recent months.<\/p>\n The\u00a0Japanese yen<\/a><\/span>\u00a0rose 0.1% on Thursday, but was trading close to six-month lows amid a chorus of Bank of Japan members calling for loose monetary policy.<\/p>\n BOJ board member Asahi Noguchi said that the central bank had to maintain its ultra-loose policy in the near-term to ensure steady wage growth, echoing comments from peer Seiji Adachi on Wednesday, who called for no changes to the BOJ\u2019s yield curve control policy.<\/p>\n The BOJ had largely stood pat on its ultra-loose policy earlier in June, with signs that\u00a0inflation<\/a>\u00a0had peaked giving the bank slightly more headroom to keep interest rates low. But this has weighed heavily on the yen, amid a widening gap between local and offshore interest rates.<\/p>\n Focus is now on\u00a0nationwide inflation data<\/a><\/span>, due on Friday, for more cues on the path of monetary policy.<\/p>\n The\u00a0Australian dollar<\/a><\/span>\u00a0fell 0.2% on Thursday, coming under pressure from uncertainty over Chinese stimulus measures and commodity demand.<\/p>\n China cut in its benchmark\u00a0loan prime rate<\/a><\/span>\u00a0this week disappointed some traders hoping for a bigger reduction, which in turn weighed on currencies with high trade exposure to the mainland.<\/p>\nJapanese yen near six-month lows amid dovish BOJ signals<\/span><\/h2>\n
Australian dollar lags amid China uncertainty<\/span><\/h2>\n