Investing.com – Asian currencies fell further on Wednesday, while the dollar held steady amid hawkish comments from Federal Reserve officials, while concerns about slowing economic growth sent the Chinese yuan lower past key levels.
It fell 0.3% to its weakest level since mid-December, while it breached the psychologically important 7 level for the first time this year, as a series of weak economic readings indicated a slowing recovery in China.
The yuan also weakened as bets mounted that the People’s Bank of China will need to ease monetary policy to support economic growth. This could push the bank’s switch into record low territory, widening the gap between Chinese and US interest rates.
Dollar strength also weighed on the yuan, as the dollar stabilized after a series of hawkish statements from Federal Reserve officials this week. The general consensus among policymakers is that inflation remains very high, which could lead to further interest rate hikes by the central bank in the coming months. US rates are also expected to remain elevated for a longer period.
It rose marginally in Asian trade.
Broader Asian currencies weakened, with sentiment also continuing to sour due to uncertainty about the US debt ceiling. Policymakers are expected to continue talks about raising the cap later this week, though both Republican and Democratic leaders have said a default in the United States is unlikely.
It fell 0.1%, with little support from data that showed the country in the first quarter of 2023. But the outlook for the economy remains bleak, amid slowing growth in Japan’s largest export market.
Losses were limited as data showed a slight slowdown in the first quarter, which could portend lower inflation in the coming months.
The index slipped 0.1%, with the country’s main contraction again in April. The slowdown in China has weighed heavily on Singapore’s economy over the past year, with little recovery in sight.
Other Southeast Asian currencies also declined. It lost 0.5%, while it fell 0.3%.
Sentiment towards riskier Asian currencies is expected to remain tense in the coming days, amid concerns about rising US interest rates, worsening growth in China, and uncertainty about the US debt ceiling.
Asia FX weakens as hawkish Fed comments weigh, Chinese yuan in focus By Investing.com
Investing.com – Asian currencies fell further on Wednesday, while the dollar held steady amid hawkish comments from Federal Reserve officials, while concerns about slowing economic growth sent the Chinese yuan lower past key levels.
It fell 0.3% to its weakest level since mid-December, while it breached the psychologically important 7 level for the first time this year, as a series of weak economic readings indicated a slowing recovery in China.
The yuan also weakened as bets mounted that the People’s Bank of China will need to ease monetary policy to support economic growth. This could push the bank’s switch into record low territory, widening the gap between Chinese and US interest rates.
Dollar strength also weighed on the yuan, as the dollar stabilized after a series of hawkish statements from Federal Reserve officials this week. The general consensus among policymakers is that inflation remains very high, which could lead to further interest rate hikes by the central bank in the coming months. US rates are also expected to remain elevated for a longer period.
It rose marginally in Asian trade.
Broader Asian currencies weakened, with sentiment also continuing to sour due to uncertainty about the US debt ceiling. Policymakers are expected to continue talks about raising the cap later this week, though both Republican and Democratic leaders have said a default in the United States is unlikely.
It fell 0.1%, with little support from data that showed the country in the first quarter of 2023. But the outlook for the economy remains bleak, amid slowing growth in Japan’s largest export market.
Losses were limited as data showed a slight slowdown in the first quarter, which could portend lower inflation in the coming months.
The index slipped 0.1%, with the country’s main contraction again in April. The slowdown in China has weighed heavily on Singapore’s economy over the past year, with little recovery in sight.
Other Southeast Asian currencies also declined. It lost 0.5%, while it fell 0.3%.
Sentiment towards riskier Asian currencies is expected to remain tense in the coming days, amid concerns about rising US interest rates, worsening growth in China, and uncertainty about the US debt ceiling.