Most Asian currencies were little changed on Monday, while the dollar received some safe-haven demand after the assassination attempt on former U.S. President Donald Trump over the weekend.
Regional trading volumes were thin due to a Japanese market holiday. The yen also weakened slightly against the dollar, keeping markets on edge about possible government intervention.
Asian currencies rose sharply against the dollar last week amid growing optimism about a Federal Reserve rate cut. Although the dollar regained some ground on Monday, it has suffered sharp losses over the past two weeks.
Weak GDP data from China weighed somewhat on sentiment towards Asian markets, while the yuan also weakened after the reading.
Dollar rises as safe havens surge after Trump assassination attempt
Gold and silver prices rose 0.1% in Asian trading, recovering from more than a month’s lows hit last week.
The dollar saw some selling after a shooting at a Trump rally in Pennsylvania, where the former president was shot in the ear. But Trump was seen urging his supporters to “fight!” after the shooting.
Trump is now scheduled to appear at the 2024 Republican Party convention later this week, and is likely to be nominated as the party’s front-runner in the presidential race.
Analysts said the shooting increased his chances of defeating Joe Biden — a scenario that could ultimately benefit the dollar, given that Trump has signaled his intention to enact more protectionist trade policies.
The dollar is also set to receive more cues from a speech later this week.
Japanese Yen Steady, Intervention in Spotlight
The Japanese yen was steady in thin trading on Monday, with the pair hovering around the 158 yen level.
The yen rose sharply against the dollar late last week, sparking speculation about whether the move was due to government intervention or pressure on bets against the yen. The yen also recovered from its weakest level in 38 years.
But despite the recent recovery, the yen has still suffered sharp losses against the dollar over the past two years.
Chinese yuan falls on weak Q2 GDP
The Chinese yuan fell on Monday, with the pair down 0.2% and approaching an eight-month high.
China’s economy grew at a weaker-than-expected 4.7 percent in the second quarter, data showed, amid mounting headwinds from weak consumer spending.
The reading added to concerns about the country’s slowing economic recovery, especially as it grapples with a slowdown in consumer spending.
Broader Asian currencies were mostly weaker on Monday. The Australian dollar fell 0.1%, while the South Korean won rose 0.7%.
The Singapore dollar rose 0.1%, while the Indian rupee remained close to record highs.
