Most Asian currencies kept to a tight range on Thursday amid caution ahead of key Chinese economic data, while easing fears of a banking crisis spurred sharp gains in Treasury yields and a recovery in the dollar.<\/p>\n
The dollar rose in overnight trade, and firmed slightly in the Asian session as easing pressure on the banking sector saw markets reassess their outlook on\u00a0U.S. interest rate hikes<\/a><\/span>\u00a0in the near-term.<\/p>\n The\u00a0dollar index<\/a><\/span>\u00a0and\u00a0dollar index futures<\/a><\/span>\u00a0rose less than 0.1% each, after adding 0.2% in overnight trade.<\/p>\n The\u00a0Chinese yuan<\/a><\/span>\u00a0was flat as investors digested a slew of signals on Asia\u2019s largest economy. Premier Li Qiang said that the economy had improved in March after a sluggish start to the year, and that the government will keep rolling out supportive measures.<\/p>\n But optimism over his statements was somewhat offset by fears of worsening U.S.-China tensions, as Beijing warned of retaliation over Taiwan President Tsai Ing-wen\u2019s American visit.<\/p>\n Focus is now squarely on Chinese\u00a0manufacturing<\/a><\/span>\u00a0and\u00a0service sector<\/a><\/span>\u00a0activity data for March, due on Friday. Analysts are expecting some cooling in growth, after activity rebounded past pre-COVID levels in February.<\/p>\n China is facing increased economic headwinds from slowing global demand for Chinese goods, as well as sluggish domestic consumption.<\/p>\n Broader Asian currencies edged lower, with China-exposed units marking small losses. The\u00a0Malaysian ringgit<\/a><\/span>\u00a0and\u00a0Philippine peso<\/a><\/span>\u00a0fell 0.2% and 0.1%, respectively, while the\u00a0Singapore dollar<\/a><\/span>\u00a0fell less than 0.1%.<\/p>\n The\u00a0Thai baht<\/a><\/span>\u00a0fell 0.2% as data showed\u00a0exports<\/a><\/span>\u00a0continued to fall in February, albeit at a slower pace than expected. The country\u2019s\u00a0trade deficit<\/a><\/span>\u00a0also shrank sharply from the prior month.<\/p>\n The\u00a0Australian dollar<\/a><\/span>\u00a0was flat amid growing bets that the Reserve Bank could pause its current rate hike cycle by as soon as April. Analysts also\u00a0trimmed their forecasts for the RBA\u2019s terminal rate<\/a><\/span>, as inflation retreated further in February.<\/p>\n