Asia FX dips, dollar at over 2-mth high with Powell in focus
investing.comInvesting.com — Most Asian currencies fell on Friday, while the dollar surged to two-month peaks as markets hunkered down ahead of more signals on monetary policy from the Jackson Hole Symposium.
The greenback saw strong overnight gains, while Treasury yields also moved back towards multi-decade highs as data showed continued resilience in the U.S. jobs market.
Focus is now chiefly on an address by Federal Reserve Chair Jerome Powell at Jackson Hole, with markets fearing any potentially hawkish signals from the Chair, given that U.S. inflation remains sticky while the labor market is strong.
The dollar index and dollar index futures both rose 0.2% each in Asian trade, and were sitting at their strongest levels since early-June. While the greenback saw some consolidation this week, following weak business activity readings, it was still set to rise for a sixth straight week of gains.
The prospect of higher U.S. interest rates bodes poorly for Asian currencies, as the gap between risky and low-risk yields narrows. Most regional units retreated on that notion.
The Japanese yen fell 0.1% after steep overnight losses, and was now back within sight of a near 10-month low. The yen was also hit by concerns over deteriorating relations with China, after Beijing blocked all seafood exports from Japan on concerns over radioactive contamination.
The rate-sensitive South Korean won was flat after the Bank of Korea kept interest rates steady earlier this week, for the fourth straight month. But the move was seen as a hawkish pause, as the central bank moves to curb sticky inflation.
The Australian dollar fell 0.1%, trading close to nine-month lows as it tracked weakness in commodity prices. The Singapore dollar fell 0.1%, as did the
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