Asia FX muted, dollar rebound holds with more Fed cues on tap
Investing.com-- Most Asian currencies kept to a tight range on Wednesday, while the dollar maintained a recent rebound after several Federal Reserve officials warned against betting that the central bank was done with its interest rate hikes.
This put an upcoming speech by Fed Chair Jerome Powell squarely in focus, with markets seeking more cues on U.S. monetary policy.
Sentiment towards Asian markets remained constrained, as traders remained on edge over any more hawkish signals from the Fed. Continued signs of economic weakness in China also kept traders wary of regional markets.
The Chinese yuan rose 0.1% on Wednesday, benefiting chiefly from a stronger daily midpoint fix by the People’s Bank of China. The yuan also took some support from reports that the Chinese government met with major property developers to gauge their financial positions, potentially heralding more support for the beleaguered sector.
But weak economic data from the country put a cap on any major gains. Data on Tuesday showed that Chinese exports fell more than expected, while the country’s trade balance shrank to a 17-month low in October.
Focus is now on Chinese inflation data, due on Thursday.
The Japanese yen fell 0.1%, remaining well above the 150 level to the dollar as dovish signals from the Bank of Japan and strength in the dollar offered little support.
Weakness in the currency saw traders positioning for any potential intervention by the Japanese government in currency markets, to boost the yen. Japanese ministers had offered a slew of verbal warnings in October over such a move.
The Australian dollar rose 0.1%, recovering slightly after somewhat dovish signals from the Reserve Bank of Australia saw the currency tumble nearly 1% on
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