Home Forex News Asia FX muted, dollar steady ahead of Fed, BOJ meetings

Asia FX muted, dollar steady ahead of Fed, BOJ meetings


Asia FX muted, dollar steady ahead of Fed, BOJ meetings By Investing.com

Breaking News


AuthorAmbar WarrickCurrencies

Published Mar 17, 2024 11:39PM ET

© Reuters.

Investing.com– Most Asian currencies kept to a tight range on Monday, while the dollar steadied near two-week highs as focus turned squarely to a swathe of central bank meetings helmed by the Bank of Japan and Federal Reserve. 

Strong U.S. inflation readings from last week put traders on guard over any hawkish sentiments from the Fed, while positive wage data and sticky inflation spurred mass speculation over whether the BOJ will end its ultra-loose policies this week.

USDJPY steady, BOJ rate hike in focus

The Japanese yen moved little on Monday after clocking a volatile week on speculation over an end to the BOJ’s negative interest rate and yield curve control policies. The BOJ kicked off its two-day meeting on Monday, with a hotly anticipated decision due on Tuesday.

The USDJPY pair had fallen as far as 146 to the dollar, especially after reports showed Japanese labor unions won large wage hikes this year. Recent data also pointed to inflation remaining sticky, with both factors giving the BOJ enough confidence to end its ultra-dovish policies.

But analysts still remained split over whether the bank will raise rates in March or April, with general consensus leaning slightly towards an April move. The BOJ is expected to raise rates by 20 basis points to 0.1% from negative 0.1%.

While any rate hikes bode well for the yen, speculation over the timing of the hike saw the USDJPY pair mark volatile moves in recent weeks. The currency pair hovered around 149 on Monday.

Fed meeting awaited for more rate cut cues 

The dollar index and dollar index futures moved little in Asian trade on Monday, steadying near two-week highs with focus squarely on the conclusion of a two-day Fed meeting on Wednesday.

While the Fed is widely expected to keep rates unchanged, any signals on its plans for interest rate cuts in 2024 will be closely watched. But the central bank may also strike a more hawkish chord than markets are hoping for, especially as recent data showed stickier-than-expected inflation in February. 

The prospect of higher-for-longer U.S. rates bodes poorly for Asian markets. This caution kept most regional currencies moving little on Monday, with a few more regional central bank decisions also on tap later in the week.

RBA, PBOC rate decisions also on tap

The AUD/USD rose 0.1% ahead of a Reserve Bank of Australia rate decision on Tuesday. The RBA is widely expected to keep rates on hold and offer few signals on when it plans to begin easing policy, especially in the face of sticky inflation.

The Chinese yuan tread water on Monday, with the USDCNY pair hovering around 7.1973. The People’s Bank of China is also set to decide on its loan prime rate this week, but is widely expected to leave the rate unchanged.

Data released on Monday offered mixed cues on the Chinese economy. While industrial production grew more than expected in the first two months of 2024, retail sales missed expectations and unemployment unexpectedly rose.

The South Korean won moved little with the USDKRW pair hovering around 1,332.01. The Singapore dollar was flat with USDSGD around 1.3378 following weaker-than-expected non-oil exports data from the island state.

The Indian rupee firmed slightly, with USDINR moving down 0.1% to 82.841, amid signs of continued support from the Reserve Bank of India. 

Asia FX muted, dollar steady ahead of Fed, BOJ meetings

Related Articles

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 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.

Related News