Investing.com–Most Asian currencies fell on Tuesday as anticipation of a Federal Reserve meeting this week kept traders largely toward the dollar, with the Japanese yen falling slightly after a rebound due to suspected government intervention.
Most regional currencies suffered losses through April as traders steadily priced in expectations of early Fed rate cuts. A series of higher-than-expected inflation rates in the US were the driving force behind this idea.
The and were both up about 0.3% in Asian trading as investors positioned for the . The central bank is expected to keep interest rates steady, but could give aggressive signals in the wake of persistent inflation data.
Fears of longer interest rates in the US put the dollar on course for a 1.3% rise in April.
The Japanese yen softens, USDJPY rises after falling from 160
The pair, which measures the amount of yen needed to buy one dollar, rose 0.3% to around 156.80 on Tuesday.
The pair had fallen sharply from a 34-year high above 160 on Monday, prompting speculation that the Japanese government had intervened to support the yen. Traders said it appeared the Japanese government’s new limit was USDJPY at 160.
Although the government gave no official word on the intervention, the yen’s recovery over the past month came after a series of verbal warnings from Japanese officials.
Mixed Japanese data reflected on yen weakness on Tuesday. Although interest rates rose more than expected in March, they fell well short of expectations, providing a muted outlook for consumer spending and inflation.
Remove ads
.
The yen was the worst performer in Asia through April, with the USD/JPY pair rising almost 4%.
The Australian dollar is falling as weak retail sales hurt the outlook
The Australian dollar was the worst performer in Asian trading on Tuesday, with the pair down 0.5% after significantly weaker-than-expected data.
The results showed that persistent inflation and high interest rates weighed heavily on consumer spending, creating a softer outlook for inflation. Traders saw expectations down that the Reserve Bank of Australia will raise interest rates further this year.
The Aussie should expect a muted performance in April.
The Chinese Yuan Weakens on Mediocre PMIs
The Chinese yuan pair rose 0.2% on Tuesday after mixed purchasing managers’ index data pointed to some slowdown in the Chinese economy.
Official data showed activity slowed slightly less than expected but grew significantly less than expected.
Although a rosier picture of manufacturing activity was painted, the overall figures still showed limited strength in Chinese business activity.
The USDCNY pair rose 0.3% in April, with further gains limited by continued efforts from the People’s Bank.
Other Asian currencies weakened on Tuesday. The South Korean won pair rose 0.3%, while the Singapore dollar pair added 0.1%.
The Indian rupee’s pair edged closer to record highs earlier this month as caution over the 2024 general election provided little relief for the rupee.
