Investing.com — Most Asian currencies fell on Friday as the dollar regained some of recent losses after a series of Federal Reserve officials warned that bets on interest rate cuts may be premature.
While the dollar is still on track to post some weekly losses, it was trading well above the one-month low hit on Thursday. US Treasury yields also rebounded, putting pressure on risk-driven markets.
Regional factors also affected Asian currencies, as economic data from China and Japan were disappointing.
The Chinese yuan is weak amid mixed economic prints
The Chinese yuan pair rose 0.1%, returning to its highest levels in six months above 7.22.
Economic readings from the country continued to provide moderate signs of economic recovery. Friday's data showed more-than-expected growth in April.
But other readings showed a sharp slowdown in growth in China, while the decline in China accelerated last month.
China's economy also grew at a lower-than-expected rate in April, while falling from a seven-month high, but remaining relatively high.
The readings presented mixed expectations for Asia's largest economy. It also came after the United States imposed higher tariffs on key Chinese industries, raising fears of a renewed trade war between Beijing and Washington.
Concerns about China weighed on other currencies with trade exposure to the country. The Australian dollar pair fell 0.2%, while the South Korean won pair rose 0.7%.
The Singapore dollar pair rose 0.1% after the island nation grew at a slower pace than expected in April, and also contracted sharply from a year ago.
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The Japanese yen's weakness was exacerbated by weaker-than-expected first-quarter GDP data. The pair rose 0.3% and was close to breaking above the 156 level, extending its sharp gains overnight.
The dollar recouped most of its weekly losses as the Federal Reserve tapered interest rate cuts
Both indexes rose 0.2% in Asian trading, continuing its overnight recovery from one-month lows.
The dollar's rebound came as several Fed officials, specifically members of the bank's interest rate-setting committee, said they needed more confidence that inflation was falling, beyond some of the decline in inflation in April.
This has led traders to reduce their bets on a rate cut in September, albeit slightly, according to .
However, the dollar is expected to lose about 0.7% this week, after some weaker than expected data for April. This reading, coupled with weak data, has raised hopes that inflation will subside in the coming months.