Investing.com — Most Asian currencies moved little on Friday in anticipation of key U.S. jobs data due later in the day, although rising expectations for interest rate cuts had the dollar heading toward a weekly loss.
Sentiment towards risk-driven assets improved this week following interest rate cuts from .
But mixed economic signals from some major Asian economies kept capital flows into regional markets limited, as did expectations of more signals on US interest rates.
The Chinese yuan stabilized after mixed trade data
The Chinese yuan pair moved slightly on Friday, staying close to a six-month high following moderate trade data from the country.
China's economy grew more than expected in May, supported by strong industrial production and external demand. This also saw the country record a larger surplus than expected.
But growth in China was much weaker than expected, suggesting that domestic demand remained weak at a time when the broader economy faces an uneven economic recovery.
Sentiment towards China has deteriorated in recent weeks amid growing doubts about the country's economic recovery and further stimulus measures from Beijing.
Dollar presses weekly decline, awaiting non-farm payrolls report
The pair settled in Asian trading on Friday, and are set to lose about 0.5% each this week.
The US currency has been affected by a group of weak economic readings, especially regarding the labor sector, which has increased expectations that the Federal Reserve will have increased confidence to cut interest rates this year.
Traders were seen sharply increasing their bets on…
The weak labor data also came ahead of data scheduled for release later on Friday, which is set to provide more definitive signals on the labor market and interest rates.
The Federal Reserve is also scheduled to meet next week and is widely expected to keep interest rates steady.
Indian rupee tests record lows, RBI waits
The Indian rupee pair moved slightly on Friday, remaining close to record levels with the Reserve Bank of India meeting scheduled for later in the day.
The Reserve Bank of India is widely expected to remain steady, while its signals on inflation and the economy will be in close focus.
The rupee weakened significantly this week after the results of the 2024 general elections showed that the ruling alliance led by the Bharatiya Janata Party won a much smaller majority than expected.
The broader Asian currencies moved in a narrow range. The Japanese yen pair is hovering near 156 yen, with the focus squarely on an area where the central bank is expected to start reducing its bond purchases and tighten policy.
The Australian dollar pair rose 0.1%, while the South Korean won pair rose 0.3%.
The Singapore dollar pair moved slightly.