NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Asia FX muted before more rate cues; yen shrugs off intervention fears

Published 04/22/2024, 11:48 PM
© Reuters.
USD/JPY
-
AUD/USD
-
USD/SGD
-
USD/INR
-
USD/KRW
-
USD/CNY
-
DX
-

Investing.com-- Most Asian currencies moved little on Tuesday even as easing safe haven demand saw the dollar weaken slightly, although anticipation of more cues on the U.S. economy and interest rates kept traders biased towards the greenback.

Regional currencies were still nursing steep losses against the dollar over the past week, as hawkish signals from the Federal Reserve and waning risk appetite pushed the dollar to over five-month highs.

These factors are expected to remain in play over the coming week. 

USDJPY hovers near 155 despite intervention fears, BOJ awaited 

The Japanese yen’s USDJPY pair moved little on Tuesday, but remained just in sight of new 34-year highs above the 155 level. 

Weakness in the yen came despite increasing speculation over just when the Japanese government will intervene in currency markets. Traders are watching for USDJPY to hit 155 level and trigger intervention by the government.

The drop in the yen comes just days before a Bank of Japan meeting, where the central bank is widely expected to keep rates on hold after raising them for the first time in 17 years in March. But the central bank may potentially present a more hawkish stance to support the Japanese currency.

Purchasing managers index data on Tuesday showed improvements in Japan’s manufacturing and services sector through April. Strength in the economy gives the BOJ more headroom to present a hawkish stance.

Dollar treads water with GDP, PCE inflation on tap 

The dollar index and dollar index futures moved little in Asian trade on Tuesday, with focus squarely on upcoming inflation and economic growth readings. 

While the greenback had strengthened sharply in recent weeks, its momentum was somewhat dulled by easing fears of an escalation between Iran and Israel, which sapped some safe haven demand for the dollar.

Gross domestic product data due on Thursday is expected to show just how resilient the U.S. economy remained in the first quarter.

This will be followed by PCE price index data on Friday, which is the Fed’s preferred inflation gauge, and is widely expected to factor into the central bank’s outlook for interest rate cuts.

The dollar still remained close to over five-month highs hit earlier in April, as waning expectations of early interest rate cuts by the Fed saw traders pile into the greenback. This notion kept most Asian currencies under pressure.

The Australian dollar’s AUDUSD pair rose from near five-month lows on Tuesday, with focus turning to an upcoming reading on consumer inflation for the first quarter. 

The Chinese yuan’s USDCNY pair tread water but remained close to five-month highs, while the South Korean won’s USDKRW pair also hovered close to five-month highs.

The Singapore dollar’s USDSGD pair was flat, while the Indian rupee’s USDINR pair hovered below record highs hit last week. 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.