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Investing.com — Most Asian currencies were in tight ranges on Monday as trading volumes were limited due to a market holiday in much of the region and the dollar weakened slightly ahead of key inflation data to be released this week. It has changed.
Markets in China, Singapore, South Korea and Hong Kong were closed for Lunar New Year, and markets in Japan were closed for Memorial Day.
This resulted in limited movement in most regional currencies, while expectations for the US inflation outlook also led traders to shy away from riskier currencies.
Offshore trade fell 0.1%. It also fell by 0.1%.
It was flat ahead of the main (CPI) inflation data to be released on Tuesday. The reading is expected to show that inflation remains sticky and comes days after the Reserve Bank of India said it would maintain a hawkish stance to rein in inflation.
Dollar gradually declines along with CPI, Fed immediately comments
and fell 0.1% each in Asian trading as traders awaited a number of clues on US interest rates this week.
It is expected to be announced on Tuesday and is expected to ease inflation to some extent. However, price pressures are expected to remain relatively persistent, and stocks in particular are expected to remain well above the Fed's annual 2% target, providing further impetus for the Fed to keep interest rates steady for the long term. It's a scenario.
In addition to the inflation data, this week also includes speeches from several Fed officials, including and . Central bank officials are widely expected to further downplay bets on early interest rate cuts.
Asian currencies took a hit in recent trading as hopes for early monetary easing from the Federal Reserve faded, and the dollar remained on track for three-month highs.
The Japanese yen remains at its lowest level in two and a half months due to the dovish Bank of Japan.
There was a small move on Monday, but the Bank of Japan's Deputy Governor Shinichi Uchida said the Bank of Japan's ultra-dovish stance would be reduced in stages, carrying significant losses from last week.
Mr. Uchida signaled an eventual end to the Bank of Japan's low interest rate regime, but traders are pricing in the possibility of a rapid rate hike by the Bank of Japan following his remarks. Such a scenario bodes ill for the yen, as the chasm between domestic and US interest rates has widened over the past two years.
The yen was trading at 149.23 yen to the dollar, its lowest level since late November. So far in 2024, it has been the worst performing currency among Asian currencies.
