Investing.com — Most Asian currencies rose slightly on Wednesday as dollar weakness provided some relief to regional markets, although the Japanese yen’s underperformance continued despite fears of government intervention.
The dollar retreated further from recent five-month highs this week on some soft purchasing managers’ index data. But continued bets on longer US yields and anticipation of more important economic data left traders largely favoring the dollar.
Yen weak while USDJPY heads towards 155
But the Japanese yen saw little relief from a softer dollar, with the pair trading near a 34-year high and within sight of the 155 level.
The yen weakened even as a slew of Japanese officials warned of government action to prop up the beleaguered currency. Traders saw USDJPY at 155 as potentially picking up government intervention.
The yen’s weakness came ahead of next Friday, where the central bank is expected to keep rates unchanged after a historic rate hike in March. But the outlook for inflation and economic growth will be closely watched.
The Australian dollar is recovering due to higher-than-expected inflation
The Australian dollar pair was among the best performing in Asia on Wednesday, rising 0.5% to a near two-week high.
The currency surged after inflation turned out to be stronger than expected for the first quarter, moving further above the Reserve Bank of Australia’s annual target of 2% to 3%.
The outcome gives the RBA more impetus to keep rates high for longer, which bodes well for the Australian dollar.
Remove ads
.
The dollar held steady after overnight losses, GDP and inflation data awaited
The and moved little in Asian trading after falling sharply on Tuesday as data showed unexpected weakness in US business activity.
But the dollar retained much of the gains made so far in April as traders priced in expectations of early rate cuts by the Federal Reserve.
More key economic signals from the US will follow this week, with first quarter data due on Thursday, while – the Fed’s favorite inflation gauge – due on Friday. Both measures are widely expected to play a role in the central bank’s interest rate outlook.
The dollar’s weakness provided some relief for Asian currencies, although they still suffered losses so far in April.
The Chinese yuan pair remained near a five-month high amid renewed doubts about a recovery in Asia’s largest economy. But further yuan weakness was limited by signs of currency market intervention by the People’s Bank.
The South Korean won pair fell 0.2%, while the Singapore dollar pair fell 0.1%.
The Indian rupee pair moved further away from last week’s record highs, but still remained well above the 83 level.
