Asia FX muted, dollar subdued with U.S. PMIs in sight
Investing.com-- Asian currencies kept to a tight range on Friday, while the dollar moved little as a U.S. market holiday made for scant trading, although focus now turned to key business activity readings due later in the day.
Most regional currencies were set for some weekly gains amid growing conviction that the Federal Reserve was done raising interest rates. This notion had put the dollar at near three-month lows at the beginning of the week.
But the greenback saw some strength in recent sessions, following strong U.S. labor data and some hawkish signals from the minutes of the Fed’s recent meeting.
Weak purchasing managers index (PMI) readings from the euro zone and Japan provided negative cues to regional markets, as the outlook for the global economy weakened. Trading volumes were also muted on account of a U.S. holiday.
In Asia, the Chinese yuan fell 0.1%, but remained within sight of a four-month high after a series of strong daily midpoint fixes by the People’s Bank of China. Markets were also awaiting PMI readings from China next week, amid persistent concerns over a sluggish economic rebound.
The yuan was up 0.8% this week- its fourth straight week of gains as it extended a rebound from an over one-year low.
The Japanese yen rose 0.1%, as data showed that consumer inflation grew slightly less than expected in October. The reading, coupled with weak PMI data for November, give the Bank of Japan more headroom to maintain its ultra-dovish policy.
The Australian dollar was flat but was headed for a 0.7% weekly gain following somewhat hawkish signals on inflation from the Reserve Bank. The South Korean won fell 0.3% and was set for a 0.7% weekly decline.
The Indian rupee traded sideways after hitting a record
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