Chinese economic data released over the weekend painted a mixed picture of recovery

Asian currencies traded in tight ranges on Monday, as investors weighed persistent geopolitical uncertainty in the Middle East.

Markets remained focused on developments in the Middle East and the outlook for monetary policy worldwide.

Currency moves across Asia were largely subdued.

The yen’s USD/JPY pair edged up 0.1 per cent.

The won’s USD/KRW pair climbed 0.6 per cent, bucking the trend, while the Singapore dollar’s USD/SGD traded 0.1 per cent higher.

The Indian rupee’s USD/INR pair dropped 0.2 per cent. The Australian dollar’s AUD/USD pair traded largely flat.

The yuan’s onshore pair USD/CNY was little changed.

Chinese economic data released over the weekend painted a mixed picture of the country’s recovery. Official data on Sunday showed China’s manufacturing purchasing managers’ index (PMI) slipped in April, indicating factory activity stalled as weak domestic demand and rising production costs weighed on sentiment.

However, the official non-manufacturing PMI improved, suggesting a modest recovery in services activity.

Markets have increasingly shifted focus toward inflation risks after recent increases in oil prices complicated the outlook for some central banks.

In related news, investors have pared expectations for U.S. central bank rate cuts this year, with some analysts now seeing a growing possibility of another rate increase if energy-driven inflation remains elevated. Attention this week will also on local labor market data, including Friday’s nonfarm payrolls report, for further clues on the bank’s policy path.

Traders are also watching comments from other central bank officials and upcoming meetings from Asian central banks, including the Bank of Japan and the Reserve Bank of India.