Most Asian currencies retreated on Friday, coming under pressure from uncertainty over U.S. monetary policy following mixed economic readings this week, while the dollar stuck to a 10-day high amid dwindling bets on interest rate cuts this year.<\/p>\n
Risk-driven assets were set for a tough week following signs of sticky U.S. inflation, as well as slowing growth in China.<\/p>\n
The\u00a0Chinese yuan\u00a0traded at two-month lows after disappointing\u00a0trade\u00a0and\u00a0inflation\u00a0data released this week pointed to a slowing economic rebound in Asia\u2019s largest economy. The readings, which came in the wake of a surprise contraction in China\u2019s\u00a0manufacturing sector, drummed up expectations of more policy loosening by Beijing.<\/p>\n
This put the yuan within spitting distance of the 7 level against the dollar, which is psychologically important for Chinese regulators and investors.<\/p>\n
Weakness in the Chinese economy dulled sentiment towards broader Asian markets. The\u00a0South Korean won\u00a0fell 0.2%, while the\u00a0Malaysian ringgit\u00a0shed 0.3%, even as data showed that\u00a0Malaysia\u2019s economy\u00a0grew more than expected in the first quarter.<\/p>\n
The\u00a0Australian dollar\u00a0shed 0.1%, but remained relatively underpinned on expectations of more interest rate hikes by the\u00a0Reserve Bank.<\/p>\n
The\u00a0Japanese yen\u00a0fell 0.1%, and was set for mild weekly gains as fears of a U.S. banking crisis and uncertainty over the debt ceiling made for some safe haven demand.<\/p>\n
On the other hand, the dollar steadied on Friday after strong gains this week. The\u00a0dollar index\u00a0and\u00a0dollar index futures\u00a0were set to add about 0.8% each this week.<\/p>\n
While a surprise jump in U.S.\u00a0jobless claims\u00a0pointed to some cooling in the labor market, sticky inflation readings for April pushed up expectations that the\u00a0Federal Reserve\u00a0will keep interest rates higher for longer this year.<\/p>\n
Both U.S.\u00a0consumer\u00a0and\u00a0producer\u00a0price inflation eased slightly in April, but remained well above the Fed’s target range.<\/p>\n
Fed Fund futures prices\u00a0also showed that markets were dialing down expectations for any interest rate cuts by the central bank this year.<\/p>\n
Such a trend heralds more support for the dollar, and is likely to pressure Asian currencies as the gap between risky and low-risk debt remains narrow. Most Asian central banks have wound down their rate hike cycles this year, providing little support to regional currencies.<\/p>\n
Source: https:\/\/www.investing.com\/news\/forex-news\/asia-fx-dips-amid-fed-uncertainty-dollar-set-for-strong-week-3080823<\/p>\n","protected":false},"excerpt":{"rendered":"
Most Asian currencies retreated on Friday, coming under pressure from uncertainty over U.S. monetary policy following mixed economic readings this week, while the dollar stuck to a 10-day high amid dwindling bets on interest rate cuts this year. Risk-driven assets were set for a tough week following signs of sticky U.S. inflation, as well as […]<\/p>\n","protected":false},"author":1,"featured_media":511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-510","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpautop"],"translation":{"provider":"WPGlobus","version":"2.10.10","language":"sv","enabled_languages":["en","nl","es","sv","fr"],"languages":{"en":{"title":true,"content":true,"excerpt":false},"nl":{"title":false,"content":false,"excerpt":false},"es":{"title":false,"content":false,"excerpt":false},"sv":{"title":false,"content":false,"excerpt":false},"fr":{"title":false,"content":false,"excerpt":false}}},"yoast_head":"\r\n