Investing.com — Most Asian currencies moved little on Wednesday, with the dollar stabilizing near recent highs, while the focus turned to upcoming U.S. inflation data for more signals on interest rates.
The dollar surged last week while most Asian units weakened after Donald Trump won the 2024 presidential election. Uncertainty remained about what a second Trump presidency will entail for Asia.
Traders were also seen pushing for more stimulus from China after the country’s latest set of fiscal measures disappointed.
Dollar near 4-month high with CPI data, Fed in focus
Trading in Asia was steady after falling slightly from a four-month high in the previous session.
Traders piled into the dollar amid bets that Trump will implement more expansionary policies, potentially supporting inflation in coming years.
But that trading halted on Wednesday, with focus turning to key upcoming data later in the day. Inflation is expected to show that inflation remained stable in October.
October’s CPI reading also comes after Minneapolis Fed chief Neel Kashkari warned Tuesday that any rise in inflation could lead the Fed to leave rates unchanged.
His comments saw traders lower their bets with a 25 basis point cut in December, with traders estimating a 64.2% probability of a cut, compared to yesterday’s 66.7% probability of a cut, according to .
More Fed officials will speak this week, especially on Thursday.
Asian currencies have been muted amid uncertainty in the US, and nerves in China
Most Asian currencies moved little on Wednesday, stabilizing after sharp losses in recent sessions, as traders remained largely risk averse.
Disappointing fiscal measures from China also hurt regional sentiment after Beijing failed to propose targeted measures to support private spending and the property market.
The yuan pair fell 0.1% on Wednesday after rising to a three-month high this week.
The Japanese yen weakened further this week, rising to almost 155 yen on Tuesday. Uncertainty over Japan’s political and monetary policy prospects also weighed on the yen, amid expectations that the gap between US and local interest rates will persist for longer under Trump.
The Australian dollar pair was flat on Wednesday, as was the South Korean won pair.
The Indian rupee’s pair has hovered near record highs of 84.5 rupees, receiving little support from data showing India’s CPI inflation grew much faster than expected in October.