Investing.com — Most Asian currencies moved little Wednesday while the dollar stabilized, with the focus squarely on the upcoming presidential election and a series of key economic data.
The Japanese yen also traded sideways after a three-month low, with focus shifting to the conclusion of a Bank of Japan meeting on Thursday.
Regional currencies have posted steep losses in recent weeks as traders became increasingly risk-averse ahead of a tight US presidential race.
A raft of key US economic data is also expected this week, ahead of a period when the central bank is widely expected to cut rates by another 25 basis points.
Trading in Asia remained steady after reaching a three-month high earlier this week.
Japanese Yen Vulnerable as BOJ Meeting Looms
The Japanese yen was flat on Wednesday, with the pair hovering around 153 yen after reaching nearly 154 yen in overnight trading.
The yen’s weakness came before a Thursday close, where the central bank is widely expected to leave interest rates unchanged.
Increased political uncertainty in Japan is expected to cloud the BoJ’s plans to raise rates further after two rate hikes earlier this year.
Japan’s governing coalition, led by the Liberal Democratic Party, lost its parliamentary majority in the recent general election, leaving a fragmented picture for Japanese politics.
This uncertainty is expected to prompt the BOJ to take a more cautious approach to higher interest rates, while the central bank is also expected to face increased political resistance to raising interest rates.
The yen, which had already suffered losses through October, was further affected by this idea.
Chinese Yuan Softened by PMIs, Stimulus in Focus
The Chinese yuan weakened slightly on Wednesday, with the pair rising 0.1% and staying near a two-month high.
The focus this week was on data from the country, which follows several new stimulus measures from Beijing rolled out through October.
The focus is also on a meeting of China’s National People’s Congress in early November, which is expected to provide more clues about the government’s plan to increase budget spending.
Broader Asian currencies moved from flat to low as traders remained generally risk averse. The Australian dollar pair fell 0.3% after mixed consumer inflation data showed it fell in the third quarter but remained unchanged.
The South Korean won pair was flat, while the Singapore dollar pair rose 0.1%.
The Indian rupee pair was flat but remained close to record highs above 84 rupees.
