Asia FX turns cautious ahead of U.S. payrolls, dollar hits 3-mth low By Investing.com
Forex 16 minutes ago (Dec 01, 2022 11:00PM ET)
By Ambar Warrick
Investing.com– Most Asian currencies moved little on Friday as caution kicked in ahead of U.S. payrolls data that is likely to affect monetary policy, although dovish signals from the Federal Reserve pushed the dollar to a three-month low.
Regional currencies were also set for strong gains this week as the Federal Reserve flagged smaller interest rate hikes in the coming months- a scenario that is positive for risk-driven assets.
The Japanese yen rose 0.1%, and was the best performing Asian currency this week, up nearly 3% at a three-and-a-half-month high of 135.19 as it recovered further from a 30-year low.
The Chinese yuan fell 0.2%, although speculation that China will relax its strict anti-COVID policies saw the currency set for a 1.7% gain this week.
Growing public discontent with the country’s anti-COVID restrictions sparked a wave of unprecedented protests in the country this week, which also saw the government loosen some quarantine and movement measures in two major cities.
Weak PMI data, which highlighted even more pressure on the Chinese economy in recent months, also drummed up hopes that the government will be forced into relaxing its COVID policies. But Beijing has given no official word on such a move.
Focus is now on U.S. nonfarm payrolls data due later in the day, which is expected to show that the country’s jobs market cooled slightly in November. The Fed has also targeted some cooling in the labor market as part of its measures against inflation this year.
But Powell warned that U.S. interest rates could peak at higher-than-expected levels, especially if inflation remains stubbornly high in the country.
PCE inflation data, which is the Fed’s preferred gauge of price pressures, was steady at an annualized rate of 6% in October, data showed on Thursday, remaining well above the Fed’s 2% target.
The Indonesian rupiah jumped 0.8% and was the best performer on Friday after strong inflation readings for November suggested that the central bank will keep raising interest rates.
Asia FX turns cautious ahead of U.S. payrolls, dollar hits 3-mth low
(C) 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.