Home ForexArticles Asian Currencies Firm, Dollar Falls Ahead of CPI Test By Investing.com

Asian Currencies Firm, Dollar Falls Ahead of CPI Test By Investing.com

by SuperiorInvest

© Reuters.

Investing.com– Most Asian currencies moved in a tight range on Monday, as market holidays in most of the region kept trading volumes limited, while the dollar fell slightly ahead of the key inflation data to be released this week.

Markets in China, Singapore, South Korea and Hong Kong were closed for the Lunar New Year holiday, while Japanese markets were closed for the memorial day.

This caused most regional currencies to see limited moves, while anticipation of the US inflation reading also kept traders averse to risk-on currencies.

Foreign trade fell 0.1%, while foreign trade fell 0.1%. It also lost 0.1%.

It remained stable ahead of key inflation data (CPI) due out on Tuesday. The reading is expected to show inflation remains sticky and comes just days after the Reserve Bank of India said it will remain aggressive in keeping inflation under control.

The dollar falls while waiting for the CPI and comments from the Fed are expected

The and fell 0.1% each in Asian trade as traders awaited a series of signals on US interest rates this week.

It expires on Tuesday and is expected to show some moderation in inflation. But price pressures are still expected to remain relatively firm, and the figure in particular will remain well above the Fed's 2% annual target, a scenario that gives the Fed more impetus to maintain high rates for longer.

Beyond the inflation data, speeches from several Fed officials will be available this week, including and. Central bank officials are widely expected to further play down bets on early interest rate cuts.

Waning bets on early monetary easing by the Federal Reserve hit Asian currencies in recent sessions and kept the dollar within sight of a three-month high.

The Japanese yen, at a low of two and a half months due to the moderate stance of the Bank of Japan

It moved little on Monday but was suffering from sharp losses from last week after Bank of Japan Deputy Governor Shinichi Uchida said any reduction in the bank's ultra-dovish stance will be gradual.

While Uchida signaled an eventual end to the BOJ's low interest rate regime, his comments caused traders to rule out any possibility of rapid interest rate increases by the BOJ. Such a scenario bodes poorly for the yen, which has been hit by a widening gap between local and US interest rates over the past two years.

The yen traded near its weakest level since late November, at 149.23 per dollar. It is the worst performing Asian currency so far in 2024.

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