Dollar Steady as Asian Currencies Remain Stable
Dollar steady, CPI awaited for more rate cues
Most Asian currencies showed little movement on Wednesday, with the focus on the upcoming U.S. inflation data that could impact interest rates. The dollar remained stable as traders refrained from making significant bets.
Anticipation of the inflation data for March kept the and around the 104 level. This data is crucial as it will influence the Federal Reserve’s decision on interest rates, especially after a strong report that suggested a hawkish stance.
Additionally, the are set to release their decision, with expectations of rate cuts. However, warnings from Fed officials about persistent inflation may alter this outlook.
Yen on intervention watch as USDJPY nears 152
Concerns over potential intervention by the Japanese government in currency markets kept traders cautious, particularly as the yen approached its weakest level in 34 years. Verbal warnings from Japanese officials added to the uncertainty surrounding the USDJPY pair.
Despite mildly weaker-than-expected inflation data, the yen remained stable. Expectations of rising inflation in Japan due to wage growth could impact future currency movements.
USDCNY flat, Fitch cuts China credit outlook
The Chinese yuan’s pair saw minimal changes following a strong midpoint fix by the People’s Bank of China. However, Fitch’s decision to lower China’s credit outlook due to increasing debt levels and slowing economic growth affected market sentiment.
Although the USDCNY pair neared five-month highs, the PBOC’s intervention to prevent further gains signaled Beijing’s preference for a stable yuan. Broader Asian currencies remained subdued, with the Australian dollar’s pair falling slightly and the Indian rupee’s pair staying close to record highs.
