Asia FX Tepid, Dollar Steadies Ahead of U.S. CPI Inflation

Asia FX Tepid, Dollar Steadies Ahead of U.S. CPI Inflation
Asia FX Tepid, Dollar Steadies Ahead of U.S. CPI Inflation
© Reuters

By Ambar Warrick

Investing.com– Most Asian currencies moved little on Tuesday, while the U.S. dollar curbed a recent losing streak as markets turned cautious ahead of hotly anticipated U.S. inflation data later in the day.

Regional units such as the , , and barely budged against the dollar in anticipation of the data.

The greenback on the other hand appeared to have stabilized after five straight days of losses. The fell 0.1%, while lost a similar amount. Both indicators lost about 2% each in the past five sessions, as they retreated from a 20-year peak hit last week.

Profit-taking and cooling inflation expectations were the biggest reasons behind the greenback’s retreat.

U.S. , due at 08:30 ET (12:30 GMT), is expected to show that inflation eased further off 40-year highs in August, declining for a second consecutive month. Markets hope the reading will provide more indicators of easing price pressures on the U.S. economy.

Rising inflation spurred a series of sharp interest rate hikes by the Federal Reserve this year, a move that boosted the dollar and significantly weighed on Asian currencies.

But even with inflation appearing to be on the downtrend, the Fed is widely expected to keep hiking interest rates until the reading comes between its annual target of 2%. Traders are pricing in of a 75-basis point hike by the central bank next week.

Still, expectations of an eventual softening in the Fed’s hawkish stance weighed on the dollar. This also benefited the and the – two currencies that saw outsized losses against the dollar this year due to a widening gulf in interest rates.

The Japanese yen rose 0.2% on Tuesday, while the euro added 0.1%. Both currencies are still trading near multi-year lows to the dollar.

In the Asia-Pacific region, the sank 0.2%, after data showed that and sentiment remained subdued in the country, despite a mild improvement in recent months.

The fell 0.2% ahead of and data due later this week. Annualized economic growth in the country is expected to have severely declined in the second quarter, due to rising inflation and interest rates.

Leave a Reply

Your email address will not be published.

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
AdonFinance
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance