©Reuters.
Investing.com– Most Asian currencies fell on Monday, while the dollar regained ground as investors hunkered down ahead of a flurry of signals on U.S. interest rates and inflation expected later this week.
Anticipation of numerous regional economic signals, particularly Japanese inflation and Chinese Purchasing Managers’ Index data, also kept traders on the edge of their seats, especially against a backdrop of growing anxiety over slowing growth in the major economies of the region.
The Japanese yen is hovering above 150, data on the consumer price index are awaited
It moved little on Monday, but held well above the 150 level for the dollar and remained near three-month lows.
This week the focus was exclusively on Japanese (CPI) data for January, due on Tuesday. The reading is expected to show core inflation falling within the Bank of Japan’s 2% annual target range, giving the central bank even less impetus to begin aggressive tightening policy.
This notion has had a key bearing on the yen in recent months, especially with US rates likely to remain higher for longer. But further yen losses were limited by the threat of potential government intervention, as levels above 150 have attracted intervention in the past.
Dollar businesses with PCE inflation, Fed signals in focus
Both rose 0.1% in Asian trade on Monday, after posting their first weekly loss in 2024.
But the greenback remained within sight of three-month highs as a chorus of Federal Reserve officials warned that the bank was in no rush to start cutting interest rates early, especially as inflation remains sticky.
The data, which is the Fed’s preferred inflation gauge, is expected to provide further guidance on inflation this week. Several more Fed officials are expected to speak this week and are likely to reiterate the prospect of higher interest rates for a longer period.
Such a scenario does not bode well for Asian markets, as it limits the attractiveness of high-yield, high-risk assets. Most regional currencies fell on Monday, with both losing 0.1% each. also for January it is scheduled for this week.
The result was stable, while the decline was 0.1%.
Chinese yuan flounders ahead of PMI test
It moved little on Monday following a stronger-than-expected midpoint correction by the People’s Bank.
Sentiment towards Chinese markets remained largely tense as we awaited further signals on the Chinese economy from February data, expected later this week.
Concerns about a slowing economic recovery have had a key bearing on the yuan in recent months, keeping the currency at three-month lows.