Investing.com — Most Asian currencies edged higher Wednesday as the dollar weakened ahead of a key U.S. inflation read, while attention turned to China’s annual economic policy meeting for clues on new stimulus from its second-largest economy in the world.
Investors were cautious ahead of US data, due later in the day, which is likely to play a role in the Federal Reserve’s interest rate plans. Uncertainty about the long-term outlook for interest rates has provided some strength to the dollar, putting pressure on Asian currencies in recent weeks.
The price lost 0.1%, but was also lower in Asian trading on Wednesday.
The Chinese Yuan Rises with CEWC in Focus
The Chinese yuan’s offshore pair fell 0.2% on Wednesday, while the onshore pair was largely unchanged. Both pairs fell last session after China’s Politburo issued its most dovish signals yet on plans to unlock more stimulus and support growth.
The focus was now on the China Central Economic Works Conference (CEWC), a two-day meeting starting later in the day. The CEWC serves as a barometer for how China will tackle internal challenges such as slowing growth, weak consumption and external pressures such as trade tensions.
The annual meeting is a crucial event not only for China, but also for the broader Asian region, as China is the largest trading partner for many Asian countries and the country’s economic health directly impacts regional growth.
The Singapore dollar pair rose 0.1%, while the Indian rupee pair was slightly lower.
The Australian dollar pair edged higher after falling sharply on Tuesday as the country’s central bank held interest rates steady, taking a somewhat dovish stance.
The South Korean pair fell 0.1% after four straight sessions of gains amid an ongoing political crisis in the country.
President Yoon Suk Yeol is under criminal investigation for insurrection following his controversial declaration of martial law earlier this month. South Korean police raided the president’s office on Wednesday as they conducted their investigation.
The Japanese yen rises after speculation about a rate hike by the BOJ
The Japanese yen fell 0.4% on Wednesday after data showed the Japanese yen rose for a third straight month in November as companies faced higher labor and raw material costs.
The figures show that pressure is increasing on the Bank of Japan to consider raising interest rates again, in a context of persistent inflation.
Markets are divided on whether the BOJ will raise again ahead of the two-day policy meeting ending on December 19. The central bank has raised interest rates twice this year due to a rise in inflation and wages, although momentum has weakened somewhat in the two countries. slowed down in recent months.