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Investing.com — Most Asian currencies remained in a narrow range on Monday, but the dollar rebounded from recent losses as markets awaited further clues from the U.S. Federal Reserve's interest rates and key employment data this week. Stable.
This week also focuses on China's annual parliament, where the government is widely expected to announce further stimulus measures to support Asia's largest economy.
Dollar weakens after Powell testimony, non-agricultural sector employment trending upward
There was little movement in Asian trade on Monday after posting a second consecutive week of losses. The dollar fell as confidence grew that the Federal Reserve would start cutting interest rates in June.
Over the past week, softer-than-expected data and inline data have fueled this idea.
Speculation around interest rates has been squarely in focus, with analysts expecting him to largely reiterate his view that rates will remain steady in the near term.
“We expect him to stick with much the same scenario he has been using since the January FOMC meeting, in which the Fed says inflation is on track to return to 2%,” ANZ analysts said in a note. “We need more convincing evidence.”
With labor market strength also being one of the Fed's main considerations in adjusting interest rates, this week will also focus on February statistics due out on Friday.
Asian markets remained range-bound on expectations for further guidance from the Fed. Key indicators released on Tuesday are expected to provide further clues about Japan's economy, with the dollar hovering around the 150 yen level.
We expect this to be flat compared to the fourth quarter, indicating some resilience in the Australian economy.
and were flat, but fell slightly after posting a slight gain last week on stronger-than-expected data.
Waiting for China's economic stimulus package, renminbi exchange rate restrained
Traders were in a tight spot on Monday as they avoided big bets ahead of the 2024 National People's Congress.
The Chinese government is widely expected to launch further stimulus measures to support the slowing economic recovery, especially as it grapples with the real estate market crisis and worsening deflationary trends.
The Chinese government has also set growth targets for this year, with analysts expecting the GDP target to be 5%, the same as in 2023.
