Asian forex flat, dollar drops ahead of U.S. inflation data

by Jonathan Adams
Asian forex

The Chinese yuan dropped 0.1% in offshore trade, while the Australian dollar dropped 0.1%, and the South Korean won also shed 0.1%

Most Asian currencies moved in a tight range on Monday as market holiday across most of the region kept trading volumes limited, while the dollar dropped marginally ahead of key inflation data due this week.

Chinese, Singapore, South Korean and Hong Kong markets were shut for the Lunar New Year holiday, while Japanese markets were shut for memorial day.

This saw most regional currencies clock limited moves, while anticipation of the U.S. inflation figures also kept traders averse to risk-heavy currencies.

The Chinese yuan dropped 0.1% in offshore trade, while the Australian dollar dropped 0.1%. The South Korean won also shed 0.1%.

The Indian rupee was flat before key CPI inflation data due on Tuesday. The figure is expected to show inflation remaining sticky, and comes just days after the RBI said it will remain hawkish to keep inflation in check.

The dollar index and dollar index futures dropped 0.1% each in Asian trade as traders awaited cues on U.S. interest rates this week.

Consumer price index data for January is due on Tuesday and is expected to show some easing in inflation. But price pressures are still expected to remain relatively sticky, with the core consumer price index figures in particular set to remain well above the Fed’s 2% annual target- a scenario that gives the Federal Reserve more impetus to keep rates higher for longer.

Beyond the inflation data, addresses from several Fed officials, including Neel Kashkari, Mary Daly and Ralph Bostic are scheduled for this week. Fed officials are widely expected to further downplay bets on early rate cuts.

Waning bets on early monetary loosening by the Federal Reserve battered Asian currencies in recent sessions, and kept the dollar within sight of a three-month peak.

Related Posts

    Sign up for our newsletter

    Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.

    © Copyright 2022-23
    Trading and Investment News.
    Part of CAS Media Group Publishing Ltd whose registered office is – Unit 7, Lombard Business Park, 12 Deer Park Road, Wimbledon, SW19 3FB

    Latest articles