Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Asia FX flat, dollar steadies ahead of nonfarm payrolls data

Published 08/04/2023, 12:30 AM
© Reuters.
USD/JPY
-
AUD/USD
-
USD/THB
-
USD/KRW
-
USD/CNY
-
USD/TWD
-
DX
-
DXY
-

Investing.com -- Most Asian currencies moved in a tight range on Friday, while the dollar steadied after a strong week as markets awaited more economic signals from key U.S. payrolls data due later in the day.

The dollar was headed for a third straight positive week, tracking a bounce in Treasury yields as investors braced for a potentially strong reading on the jobs market.

The dollar index and dollar index futures fell 0.1% each in Asian trade, but were up nearly 1% for the week.

Traders also remained largely risk-averse after Fitch cut the U.S. sovereign rating earlier in the week. This pressured most Asian units, while spurring flows into the dollar.

The Japanese yen was flat on Friday, while the rate-sensitive South Korean won lost 0.5%.

The Taiwan dollar fell 0.2%, while the Thai baht led losses across Southeast Asia with a 0.4% decline.

The Australian dollar was among the few outliers for the day, rebounding 0.3% from steep losses earlier in the week.

Nonfarm payrolls awaited for more Fed cues

Markets were focused squarely on nonfarm payrolls data for July, due later on Friday. While analysts expect payrolls to have eased slightly after a substantial drop in June, private payrolls data released earlier in the week heralded a potentially stronger-than-expected official reading.

Strength in the job market gives the Federal Reserve more headroom to keep raising interest rates, especially given that the central bank is also targeting some cooling in the labor market to help curb inflation.

Higher interest rates bode poorly for Asian markets, as the gap between risky and low-risk yields narrows.

Chinese yuan inches higher amid more stimulus promises

The Chinese yuan rose 0.1% on Friday, following a stronger-than-expected daily midpoint fix from the People’s Bank.

The currency was also somewhat supported by top government officials promising more measures to boost local consumption and economic activity in the coming months.

But officials once again offered no concrete details on the planned stimulus measures, souring investor optimism over a potential economic recovery in the country.

China’s central bank also said that it will use its liquidity measures flexibly in order to support an economic recovery in the country. But any measures to further loosen Chinese monetary policy are likely to weigh on the yuan.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.