On Monday, investors continued to worry about any potential consequences from the Israel-Hamas conflict, which cause a slight decline in most Asian currencies and a drop from recent highs in the dollar. The dollar experienced a small amount of profit-taking after approaching 10-month highs last week, as demand for risk-driven Asian currencies remained shaky. Following a …
On Monday, investors continued to worry about any potential consequences from the Israel-Hamas conflict, which cause a slight decline in most Asian currencies and a drop from recent highs in the dollar. The dollar experienced a small amount of profit-taking after approaching 10-month highs last week, as demand for risk-driven Asian currencies remained shaky.
Following a high inflation figure for September, the concerns about rising U.S. interest rates maintained attitudes toward Asian markets mostly negative. On this week, a number of important economic statistics from China and Japan are also in the spotlight.
With third-quarter gross domestic product figures expected later this week, the Chinese yuan dropped 0.1%. Given that business activity remained weak despite the relaxation of anti-COVID measures at the beginning of the year, the figure is anticipated to demonstrate persistent weakness in Chinese economic growth.
This week, the People’s Bank of China will also make a decision about the main loan prime rates, although a change currently appears unlikely given that the PBOC left the medium-term lending rates unaltered.
The Japanese yen strengthened a little bit and stayed slightly below the 150 level, which investors anticipate may prompt Japanese government involvement in currency markets. This week’s attention will be on Japanese industrial production and, more importantly, on September’s consumer inflation statistics.
Any inflation that remains persistent provides the Bank of Japan greater motivation to tighten monetary policy, which might help the yen. The Indian rupee increased by 0.1% as traders awaited later-in-the-day wholesale inflation data and recent decrease in oil prices. The Australian dollar increased 0.4%, rebounding from a 10-month low, but commodity price weakness continued to weigh on investor confidence toward the currency.
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