Investing.com — Most Asian currencies moved little on Monday as traders digested mediocre signals from China on its fiscal stimulus plans, while the yuan softened on weaker-than-expected inflation data.
The dollar firmed slightly, with attention turning to a slew of Federal Reserve speakers this week for more signals on interest rates. The dollar posted gains last week amid bets on a slower pace of rate cuts.
The and rose 0.1% each in Asian trading.
Regional trading volumes were dampened by a holiday in Japan, while the yen weakened slightly on lingering doubts about the Bank of Japan’s ability to raise rates further. The pair was back within sight of 150 yen.
Chinese Yuan dented by weak inflation and mediocre stimulus
The Chinese yuan weakened slightly on Monday, with the pair rising 0.1%.
The currency was particularly affected by data showing that Chinese deflation was still playing a role. grew less than expected in September, while there was a 23rd consecutive month of contraction.
Sentiment towards China was also affected by mixed signals on fiscal stimulus.
The Treasury Department said in a weekend briefing that it planned to provide fiscal support, including more debt issuance and aid to provincial governments.
But the briefing left out key details about the planned measures, particularly their scope and timing, leading to limited optimism about more stimulus.
Beijing had announced a series of large monetary stimulus measures in late September to help support sluggish growth. While sentiment was initially high about the new measures, a lack of clear details about their implementation dampened overall optimism.
The Indian rupee is nearing a low while inflation is at a steady pace
Among other Asian currencies, the Indian rupee hovered near record lows after the Reserve Bank of India announced a reversal of its aggressive policy at a meeting last week.
The rupee pair fell 0.1% after briefly touching a record high of 84,205 rupees.
The focus was now on the Indian figures and the inflation figures that would be released later in the day. Consumer inflation is expected to rise sharply in September due to food prices.
Broader Asian currencies were muted. The Australian dollar pair fell 0.1%, while the South Korean won pair rose 0.5%.
The Singapore dollar pair rose 0.1% after the Monetary Authority of Singapore left policy unchanged. Gross domestic product data shows the island nation’s economy grew sharply in the third quarter, albeit from a lower comparison base.
