– On Monday, most Asian currencies fell as the dollar nearly hit a month-high as markets became cautious ahead of this week’s highly anticipated U.S. inflation data and as regional economic indicators also came into sharper focus.
Risk-heavy The currencies of Southeast Asia performed the worst for the day, dropping about 0.8% apiece.
the country’s GDP in the fourth quarter of 2022, according to statistics, declined by 0.2%. The Monetary Authority, the nation’s major trade partner, cited expectations for a future economic recovery in China as the reason for maintaining its growth prediction for 2023.
With concerns that Governor Haruhiko Kuroda would continue his ultra-loose economic policies, the yen has fallen in recent weeks, further weakening the value of the Japanese yen.
As the People’s Bank tries to support economic development, weaker-than-expected January data increased predictions of another interest rate drop by the institution.
However, given China’s status as a significant trading hub, the country’s economic resurgence is encouraging for larger Asian nations.
Although it is predicted that inflation will have decreased from the previous month in January, it is still likely to remain high, which might encourage the Federal Reserve to continue tightening its monetary policy.
In relation to a basket of currencies, the dollar gained strength and was trading close to its recent highs from early January.
The performance of Asian currencies in recent weeks has been primarily influenced by worries about more interest rate increases by the Fed, and traders are now waiting for fresh economic data from the United States to determine the direction of monetary policy. Asian currencies have also suffered due to worries about a possible U.S. recession, which has increased short-term Treasury rates.
The decreased by 0.2% ahead of for January, which was largely anticipated to indicate a consistent reduction. However, the Reserve Bank has lately indicated that it would continue to tighten monetary policy in order to achieve its 4% annual inflation objective.