🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Asia FX muted amid Fed jitters, Chinese yuan outperforms for the week

Published 03/02/2023, 11:24 PM
Updated 03/02/2023, 11:33 PM
© Reuters.
USD/JPY
-
AUD/USD
-
USD/INR
-
USD/KRW
-
USD/CNY
-
DX
-
US10YT=X
-
DXY
-

By Ambar Warrick

Investing.com -- Most Asian currencies were muted on Friday amid growing concerns over the path of U.S. monetary policy, while the Chinese yuan was among the best performers this week on a string of strong economic readings.

The yuan rose 0.1%, and was set to close the week nearly 0.8% higher. 

A private survey showed on Friday that Chinese service sector activity grew at a faster-than-expected pace in February. The reading comes after government data showed this week that China’s business activity expanded at its fastest pace in over a decade, cementing a post-COVID recovery in the country.

Gains in the yuan spilled over into other China-exposed currencies, with the South Korean won and the Australian dollar both set to close the week higher. 

A recovery in China bodes well for countries with a large trade exposure to the Asian giant, and could help improve the prospects for Asian economies this year. Friday’s positive data also came ahead of a meeting of high-level Chinese officials, which begins on Saturday.

But most other Asian currencies kept to small ranges on Friday, as U.S. Treasury yields surged overnight after a drop in weekly unemployment claims indicated resilience in the jobs market. The dollar also steadied on Friday against a basket of currencies, with the dollar index and dollar index futures falling 0.1% each.

The greenback was set for small weekly losses.

Overnight comments from Federal Reserve officials offered some clarity on where U.S. interest rates could peak this year, with Atlanta Fed President Raphael Bostic backing a 25 basis point hike during the March meeting.

But officials also warned that the Fed’s stance will be largely data-dependent, which, considering that U.S. inflation read higher-than-expected in January, could keep interest rates higher for longer. 

The Japanese yen rose 0.1%, and was nursing some losses for the week as data highlighted weakening economic trends in the country. Inflation in Tokyo eased from an over 40-year high in February, data showed on Friday, but still remained pinned at relatively high levels.

The Indian rupee rose 0.1% and was set to add 0.8% this week as data showed that the country’s economy grew 7% in 2022, vastly outperforming its Asian peers. Indian manufacturing activity also grew more than expected in February, indicating continued resilience in the South Asian economy. 

 

Latest comments

Loading next article…
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.