© Reuters
Investing.com – Most Asian currencies fell on Wednesday as the dollar rebounded from 15-month lows, as recent US data spurred more bets that the Federal Reserve was close to pausing its rate-hiking cycle.
The pair rose about 0.1% each in Asian trade, extending its overnight recovery after data showed that the United States rose less-than-expected in June.
The reading indicated that US inflation was likely to ease in the coming months, but it boosted bets that the Federal Reserve would raise interest rates one last time in late July before announcing a pause. The central bank is widely expected next week.
However, overnight strength in the dollar pressured most Asian currencies, losing 0.3%, while the greenback fell 0.4%.
Concerns about slowing economic growth in China also kept the sentiment towards Asia largely negative.
The Chinese Yuan extends losses after weak GDP
Currencies were among the worst performers in Asia on Wednesday, falling 0.4% and once again crossing the 7.2 mark against the dollar.
The currency posted huge losses this week after data showed a significant slowdown in the second quarter, dampening sentiment about Asia’s largest economy.
While weak economic readings have fueled expectations for further stimulus measures from Beijing, any increases in domestic liquidity conditions are likely to be negative for the yuan.
Concern about China has also spilled over into other Asian currencies with exposure to the country. It fell 0.1%, while both lost 0.4%.
The New Zealand dollar is rising as steady inflation spurs bets for a rate hike
It was among the few gainers of the day, rising 0.2% after data showed the country held flat during the second quarter. The currency was trading near a five-month high.
While the bank signaled the end of its nearly two-year rate hike cycle earlier in July, the overheated inflation data spurred bets that the central bank may have to raise interest rates further.
But the New Zealand economy is expected to deteriorate further this year, after entering a technical recession in the first quarter.