🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Asia FX muted, dollar nurses weekly losses with nonfarm payrolls in focus

Published 06/06/2024, 11:42 PM
© Reuters
USD/JPY
-
AUD/USD
-
USD/SGD
-
USD/INR
-
USD/KRW
-
USD/CNY
-
DX
-
DXY
-

Investing.com-- Most Asian currencies moved little on Friday in anticipation of key U.S. payrolls data due later in the day, although growing expectations of interest rate cuts saw the dollar headed for a weekly loss.

Sentiment towards risk-driven assets improved this week following interest rate cuts from the European Central Bank and the Bank of Canada.

But mixed economic cues from some major Asian economies kept capital flows into regional markets limited, as did anticipation of more cues on U.S. interest rates.

Chinese yuan flat after mixed trade data 

The Chinese yuan’s USDCNY pair moved little on Friday, remaining close to a six-month high following middling trade data from the country. 

China’s exports grew more than expected in May, buoyed by strong industrial production and overseas demand. This saw the country’s trade balance also log a bigger-than-expected surplus.

But China’s imports grew at a much weaker-than-expected pace, indicating that local demand remained subdued as the broader economy grappled with an uneven economic recovery.

Sentiment towards China had soured in recent weeks amid growing doubts over an economic rebound in the country and more stimulus measures from Beijing. 

Dollar nurses weekly drop, nonfarm payrolls awaited 

The dollar index and dollar index futures both steadied in Asian trade on Friday, and were set to lose about 0.5% each this week.

The greenback was wallopped by a swathe of weak economic readings, particularly on the labor sector, which pushed up expectations that the Federal Reserve will have increasing confidence to cut interest rates this year. 

Traders were seen sharply increasing their bets on a 25 basis point cut in September

The weak labor data also came ahead of nonfarm payrolls data due later on Friday, which is set to offer more definitive cues on the labor market and interest rates.

The Fed is also set to meet next week, and is widely expected to keep rates steady. 

Indian rupee tests record lows, RBI awaited

The Indian rupee’s USDINR pair moved little on Friday, remaining close to record highs with a Reserve Bank of India meeting due later in the day.

The RBI is widely expected to keep its policy repo rate steady, while its signals on inflation and the economy will be in close focus.

The rupee weakened substantially this week after the results of the 2024 general elections showed the ruling BJP-led alliance won a much smaller majority than expected. 

Broader Asian currencies moved in a tight range. The Japanese yen’s USDJPY pair hovered near 156 yen, with focus squarely on a Bank of Japan meeting next week, where the central bank is expected to begin tapering its bond purchases, tightening policy.

The Australian dollar’s AUDUSD pair rose 0.1%, while the South Korean won’s USDKRW pair rose 0.3%.

The Singapore dollar’s USDSGD pair moved little.

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.