© Reuters
Investing.com – Most Asian currencies fell on Monday, while the dollar stabilized after solid gains as markets await more signals about the world’s largest economies, as well as monetary policy signals from several Federal Reserve speakers this week.
It fell 0.1 percent and hit a two-month low against the dollar. The currency was also within striking distance of Level 7 against the dollar, amid growing concerns about a slowdown in China’s economic recovery.
The focus this week is on data from Asia’s largest economy, which follows a string of disappointing readings for the month of April. All of the data beat expectations last month, even as the state rolled back anti-COVID measures earlier this year.
Weakness in China soured sentiment towards other Asian markets, with highly risky Southeast Asian currencies losing ground on Monday. It fell 0.5%, while it lost 0.6%.
These were among the few outliers for the day, rising 0.3% as the country’s national elections appeared to have swung in favor of the opposition pro-democracy party.
Monday’s data showed that growth was also more than expected in the first quarter.
It fell 0.3% as inflation data came in weaker-than-expected for the month of April, indicating less pressure on the Bank of Japan to tighten policy immediately.
But the main point of focus for Japanese markets this week is inflation data for April, which is due on Friday. The reading is expected to remain flat from the previous month and well above the Bank of Japan’s annual target of 2%.
Among other outliers, it rose 0.3% as it recovered from a one-week low last week, while adding 0.2%.
The broader Asian currencies remained under pressure as the US dollar held most of its recent gains. Expectations that the Federal Reserve will not cut interest rates this year sent the dollar to its best week since September.
And they were both flat on Monday. Markets are now awaiting data from the US for more economic signs, after a weaker-than-expected reading of consumer confidence on Friday added to concerns about a possible recession this year.
The focus this week is also mainly on a series of federal speakers, most notably on Friday. Given that inflation has remained stubborn despite slowing economic growth, markets are seeking more clarity on monetary policy.