Asian Currencies Weaken as Dollar Strengthens Amid Mixed China PMI Data
Asian Currencies and Dollar Movement
Most Asian currencies weakened on Friday, while the dollar retained its gains. This was due to signs of economic weakness in China offsetting optimism over easing U.S. inflation and interest rates.
China PMI Data Impact
Purchasing managers index (PMI) data from China indicated little improvement in business activity in February. This suggested that Asia’s largest economy’s recovery remained sluggish.
Chinese Yuan Performance
The Chinese yuan dipped by 0.1% on Friday, staying close to recent three-month lows. Official PMI data showed China’s economy shrank for the fifth consecutive month in February, offsetting some positive signs of growth.
Dollar Strength and PCE Data
The dollar and euro saw slight declines in Asian trade on Friday, holding onto most of their overnight gains. This came after data revealed that inflation eased as expected in January, impacting rate cut positioning.
Market Sentiment and Rate Speculation
Traders were still pricing in a possibility of U.S. rate cuts, with slight fluctuations in different currencies. The overall market sentiment remained cautious amid uncertainties.
Regional Currency Movements
Most other Asian currencies remained relatively stable on Friday. The yen and rupee showed mixed performances, reflecting the broader market dynamics and economic indicators.
