Asia FX muted as Powell comments offer little cheer, dollar steadies
Investing.com-- Most Asian currencies kept to a tight range on Friday, while the dollar steadied following somewhat mixed comments from Federal Reserve Chair Jerome Powell on the path of interest rates.
Persistent concerns over the Israel-Hamas war also kept traders largely wary of risky assets, especially amid growing fears over a bigger conflict in the Middle East.
Powell’s comments were seen as somewhat dovish, as the Fed Chair said that a recent spike in bond yields was helping tighten financial conditions, lessening the need for more rate hikes.
But Powell still left the door open for at least one more rate hike this year, amid resilience in the U.S. economy and sticky inflation levels.
The dollar index and dollar index futures logged some losses after Powell’s speech, but steadied in Asian trade on Friday. The greenback was still set to close the week about 0.4% lower, as traders locked in some recent profits.
U.S. Treasury yields also saw extended losses on Friday as a recent rally paused, although the 10-year rate remained within spitting distance of the 5% level.
Regional currencies saw some relief in overnight trade as the dollar retreated. But this was limited, with most units moving in a flat-to-low range on Friday. Most currencies were also set to end the week unchanged.
The Japanese yen was flat after data showed that consumer price index inflation grew more than expected in September.
While overall inflation still eased, a core reading followed by the Bank of Japan remained near 40-year highs, indicating that underlying inflation still remained largely elevated.
The Indian rupee fell slightly, with any overnight gains being largely offset by higher oil prices. The South Korean won rose 0.2%, but was
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