Investing.com — Most Asian currencies stayed within a tight range on Friday, with the dollar stabilizing at more than two-month highs as strong economic data boosted expectations of smaller interest rate cuts.
Regional markets had little to rely on Chinese gross domestic product data, which showed the economy grew as expected in the third quarter. The yuan firmed slightly after the lecture, with the focus remaining on more stimulus from Beijing.
The Japanese yen briefly weakened to levels last seen in late July, although a verbal warning from government officials helped it recoup some losses.
The and both fell 0.1% in Asian trading after rising to a more than 2.5-month high on Thursday on stronger-than-expected data. This outcome, combined with signs of continued resilience in the labor market, left traders largely holding on to the 25 basis point cut the Federal Reserve made in November.
The Chinese yuan strengthens slightly as GDP meets expectations
The Chinese yuan pair fell 0.1% after hitting a nearly two-month high earlier this week.
grew as expected at 4.6% year-on-year, albeit at a slower pace than in the previous quarter. slightly missed expectations, but still fell short of the government’s annual target of 5%.
The GDP data, while slightly positive, underlined the need for more economic support from Beijing. The Chinese government has announced a slew of stimulus measures over the past three weeks, including both monetary and fiscal measures.
But a lack of clear details on the timing, implementation and extent of the planned measures limited optimism among investors.
USDJPY flirts with 150 amid mixed CPI, intervention warning
The Japanese yen firmed slightly after hitting a near three-month low earlier in the session. The pair fell 0.2% to 149.88 yen, after rising to 150.29 yen.
The yen’s muted recovery came after top currency diplomat Atsushi Mimura warned of rapid unilateral moves in the yen, reminding traders of the government’s ability to intervene in currency markets.
Data shows inflation grew slightly more than expected in September, although it fell from a 10-month high the previous month.
The yen has suffered in recent weeks due to growing doubts about the Bank of Japan’s plans to further raise interest rates. Japan’s new Prime Minister Shigeru Ishiba also said the economy could not handle more interest rate hikes at the moment.
The broader Asian currencies moved within a tight range. The Australian dollar pair rose 0.1%, reversing some recent losses.
The South Korean won pair rose 0.2%, while the Singapore dollar pair was flat.
The Indian rupee pair remained close to record highs from earlier in October.
