Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Final hours: unlock premium data with Claim 60% OFF
Asia FX dips, dollar steadies as Powell testimony looms
Author
Published Jun 21, 2023 12:23AM ET
© Reuters
Investing.com -- Most Asian currencies fell on Wednesday, while the dollar steadied from recent losses as markets hunkered down before more cues on monetary policy from Federal Reserve Chair Jerome Powell later in the day.
Powell is set to testify before Congress later in the day, potentially offering more cues on the path of U.S. interest rates after somewhat mixed signals from a Fed meeting last week.
While the bank paused its rate hike cycle, it flagged a higher peak interest rate this year, potentially heralding more increases in rates.
This kept investors uncertain over what Powell may signal in his testimony, drawing some flows into the dollar on the potential for a hawkish outlook.
The dollar index and dollar index futures rose slightly in Asian trade after logging some gains earlier this week.
Chinese yuan hits near 7-month low after rate cut
The Chinese yuan continued to lag its regional peers, sinking 0.2% to a near seven-month low of 7.1939 against the dollar after the People’s Bank of China cut its key loan prime rate on Tuesday.
The PBOC cut its 1-year and 5-year LPR by 10 basis points each. The cut was the PBOC’s first such move in 10 months, and comes as Beijing struggles to shore up a slowing local economic rebound.
While the move is expected to help support economic growth, it bodes poorly for the yuan, as rising interest rates in the rest of the globe diminish the currency’s appeal.
The cut in the 5-year LPR also disappointed some traders hoping for a bigger reduction, given that the rate is used to peg mortgage prices and is closely tied to the Chinese property market.
U.S. rate-hike fears dent broader Asian currencies
Most other Asian units fell as markets feared any more hawkish signals from Powell later in the day, which could herald higher U.S. interest rates.
The South Korean won lost 0.3%, while the Indian rupee fell 0.1%. The Australian dollar was among the few outliers for the day, rising 0.1% after steep losses in the prior session.
The Japanese yen fell 0.1%, trading close to seven-month lows amid more signals from the Bank of Japan that it will maintain its ultra-loose monetary policy for longer.
The minutes of the BOJ’s April meeting showed that nine out of 10 board members planned to keep the policy on hold, while comments from BOJ officials reiterated this stance on Wednesday.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.