Asia FX edges past China woes as markets look to less hawkish Fed
Investing.com-- Most Asian currencies rose slightly on Wednesday as weak U.S. labor data spurred continued bets on early interest rate cuts by the Federal Reserve, helping investors look past persistent concerns over China’s economy.
JOLTs data showed U.S. job openings declined in October, pushing up hopes for a prolonged cooling in the labor market which could limit the space the Fed has to keep rates higher for longer.
The reading pulled down Treasury yields, and comes just a few days before closely-watched nonfarm payrolls data.
Optimism over a less hawkish Fed helped most Asian currencies clock some gains on Wednesday. The Taiwan dollar and South Korean won rose 0.1% each, while the Japanese yen steadied after marking a sharp recovery against the dollar in recent sessions.
The Australian dollar jumped 0.7%, recovering from two days of steep losses even as data showed Australia’s economy grew less than expected in the third quarter, hit chiefly by declining export demand in China. But local demand and spending remained robust.
A less hawkish Reserve Bank was the key source of pressure on the Australian dollar, after the bank kept interest rates on hold on Tuesday and flagged a largely data-driven approach to future hikes.
The Indian rupee remained an outlier among its peers, hovering around record lows of over 83.3 as the country’s massive trade deficit largely offset optimism over stellar economic growth.
The Chinese yuan fell 0.2%, tracking a weaker daily midpoint fix by the People’s Bank of China. But media reports showed that Chinese state-owned banks were selling dollars and buying yuan on the open market to support the Chinese currency.
Sentiment towards China was battered by ratings agency Moody’s, which
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