Asian Currencies Strengthen on Positive China GDP, Middle East Tensions
Asian currencies gain momentum from China’s economic growth
Most Asian currencies experienced slight gains on Wednesday, driven by stronger-than-expected Chinese GDP figures. However, concerns about the Israel-Hamas conflict limited substantial progress. Trade-heavy currencies, particularly those linked to China, saw some positive movement following a robust third-quarter GDP report. The gained 0.2%, along with the and .
Renewed fears of higher US interest rates persist
The US release of better-than-anticipated September data on heightened concerns of prolonged higher interest rates. Market participants worried about potential inflationary pressures. Despite this, currencies heavily influenced by trade, especially with China, managed to make modest gains.
Chinese yuan shows resilience despite underlying concerns
The Chinese yuan strengthened by 0.1%, while the improved by 0.2% after the release of positive third-quarter GDP figures. These numbers indicated that Beijing’s stimulus measures were starting to yield results. However, Chinese economic growth still lags behind pre-COVID levels, and worries persist regarding a possible debt default in China’s property sector. Additionally, concerns about a renewed trade war with the US dampened overall optimism towards China.
Dollar steadies as rate hike expectations rise
The and weakened slightly in Asian trade but remained close to 11-month highs. This followed the release of data showing higher-than-expected US retail sales in September, leading to concerns about persistent inflation. These concerns could keep the Federal Reserve in a hawkish stance. Furthermore, traders closely watched for any hawkish signals from Fed Chair Powell, who is scheduled to speak later this week.
In conclusion, Asian currencies received a boost from China’s GDP growth, but escalating Middle East tensions and fears of higher US interest rates tempered the gains. The Chinese yuan showed resilience despite underlying concerns, and the dollar steadied as rate hike expectations rose.
