Chinese Yuan, Taiwan Dollar Dip as USD Firms Ahead of Jackson Hole

Chinese Yuan, Taiwan Dollar Dip as USD Firms Ahead of Jackson Hole
Chinese Yuan, Taiwan Dollar Dip as USD Firms Ahead of Jackson Hole
© Reuters

By Ambar Warrick

Investing.com– The Chinese yuan and Taiwan dollar edged lower on Friday, with broader Asian currencies also retreating as the dollar strengthened ahead of more cues on U.S. monetary policy from the Jackson Hole Symposium.

fell 0.1% to 6.8549, while the shed 0.2%. Concerns over further deterioration of ties between the two countries grew after a U.S. lawmaker on the Senate Commerce and Armed Services committees landed in Taipei on Thursday, .

The move marks the third visit by a U.S. dignitary to the island this month, and is likely to draw ire from Beijing.

Taiwan had earlier this month launched military drills near the island after a visit by U.S. House of Representatives Speaker Nancy Pelosi. The move had briefly rattled financial markets.

On the economic front, traders were also awaiting more stimulus measures from China, after the government cut interest rates and announced more infrastructure spending this week.

This pushed the yuan to a two-year low. China is facing a severe slowdown in growth stemming from COVID lockdowns, a struggling real estate market, and a potential power shortage.

Broader Asian currencies fell as the rose slightly, sticking close to a near 20-year high. The greenback was also buoyed by a batch of strong U.S. economic data, which gives the Federal Reserve more space to aggressively.

were flat on Friday.

Markets are now awaiting Fed Chair Jerome Powell’s address to the in Wyoming, due later today, to gauge just how hawkish the central bank intends to be.

In the Asia-Pacific region, the slumped nearly 0.5%, and was the worst performer among its peers after indicated that the bank’s recent tightening cycle may be at an end.

The Reserve Bank of New Zealand has since late 2021 to curb rising inflation.

The fell 0.2% on Friday after data showed , its largest city, grew at its highest pace in 30 years in August.

Rising inflation, coupled with the Bank of Japan’s reluctance to tighten policy, has severely dented the yen this year.

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