Investing.com–Most Asian currencies moved within tight ranges on Wednesday, with the yuan treading water after China left its benchmark interest rate unchanged, while the dollar was steady after recent losses.
Regional markets saw a lack of significant clues this week as traders largely held back from making big bets while waiting for more clues about what a Donald Trump presidency will mean for the US.
The idea also helped the dollar remain stable after three straight days of losses, while investors became more uncertain about the path of US interest rates.
Most Asian currencies also posted steep losses in the past two weeks as the dollar shot to its highest level in a year after Trump’s election. The Japanese yen was one of the hardest hit by this trade.
The Chinese yuan is muted as the PBOC leaves rates unchanged
The Chinese yuan moved little on Wednesday, with the pair hovering near a three-month high.
The People’s Bank of China left its benchmark unchanged, as widely expected, after cutting interest rates last month.
Analysts said Beijing was likely holding off on releasing more economic support in light of uncertainty over a Trump presidency as he has vowed to impose steep trade tariffs on China.
Wednesday’s grab also follows some new stimulus measures from China since late September, although Beijing has yet to take more targeted fiscal measures.
The dollar remains stable after three days of losses
Trading in Asia remained steady after pulling back over the past three sessions.
The dollar saw some profit-taking after rising to a one-year high in the wake of Trump’s presidency. More recently, growing uncertainty about the path of US interest rates has also supported the dollar.
Traders were pricing in a 61% chance that the Federal Reserve would cut rates by 25 basis points in December, and a 39% chance that rates would remain unchanged, it showed.
But the long-term outlook for interest rates was uncertain, especially as Trump expected to pursue more expansionary policies, which could potentially boost inflation.
Broader Asian currencies moved largely within a tight range on Wednesday. The Japanese yen remained vulnerable, with the pair rising 0.3% and remaining near four-month highs.
Japan posted a larger-than-expected trade deficit in October, with focus shifting to upcoming consumer inflation data from the country due Friday.
The Australian dollar pair fell 0.1%, while the Singapore dollar pair rose 0.1%.
The South Korean won pair was flat, as was the Indian rupee pair. The rupee remained close to the record low against the dollar reached earlier in November.
