© Reuters.
Investing.com – Most Asian currencies fell on Thursday, while the dollar held on to recent gains as minutes from the Federal Reserve’s June meeting showed policymakers support more rate hikes this year.
The report showed that all members of the central bank supported further rate hikes in the coming months, citing stubborn inflation and an overheating job market.
The minutes soared, while also driving investors into the dollar and out of risky Asian markets.
The pair was slightly higher in Asian trade after rising 0.5% overnight, while most Asian currencies saw further weakness. The focus was also on key data, due on Friday, for more signals about the Fed.
The Chinese Yuan is nearing an 8-month low amid the trade war and slowdown fears
The dollar was marginally weaker on Thursday, after posting huge losses in the previous session. The currency was trading close to an eight-month low, after receiving a bit of support from several strong daily midpoint pegs by the People’s Bank of China.
Data over the past week showed a deterioration for the third consecutive month in June, indicating that the country’s post-COVID recovery has largely run out.
More Chinese economic indicators will also be released in the coming days, due for submission next week.
In addition to weak economic conditions, the yuan has also been affected by concerns about deteriorating trade relations between the United States and China. Beijing has blocked the export of key chipmaking materials to the US, raising the threat of US retaliation, which could disrupt global trade.
Other Asian currencies were also lower on Thursday, with and by 0.2% each.
The index fell 0.1% after falling 0.5% on Wednesday, taking a bit of support from stronger-than-expected trade data for May. But the country remains close to its lowest level in nine months, amid weak exports to China.
Japanese yen resilience amid intervention talk
steady by 0.3% on Thursday, appearing somewhat more resilient than its Asian peers amid continuing speculation about government intervention in the currency markets.
Concerns about rising US interest rates, along with the Bank of Japan’s pessimistic outlook, have battered the yen in recent weeks, pushing it closer to levels that spurred government intervention in late 2022.
Several senior Japanese ministers also issued verbal warnings about betting on the yen, which in turn helped inspire some strength in the Japanese currency.