Asian Currencies Steady Amid Dollar Stability and Key Economic Events
Asian currencies experienced minimal movement on Wednesday, with the U.S. dollar steadying ahead of the much-anticipated U.S. presidential election and several important economic reports.
The Japanese yen remained stable after hitting a three-month low, as attention shifted to the upcoming Bank of Japan (BOJ) meeting scheduled for Thursday.
Asian Currencies Under Pressure
In recent weeks, regional currencies have faced significant declines as investors become more risk-averse due to the heightened uncertainty surrounding the tight U.S. presidential race. Meanwhile, a series of crucial U.S. economic data releases is expected this week, ahead of a Federal Reserve meeting where a smaller 25-basis-point rate cut is widely anticipated.
The U.S. dollar index and its futures remained steady in Asian markets, holding near three-month highs earlier in the week.
Japanese Yen Struggles as BOJ Meeting Approaches
The Japanese yen traded flat on Wednesday, with the USD/JPY pair hovering around 153 yen after approaching 154 yen in overnight trading. The yen’s weakness comes as markets await the conclusion of the BOJ meeting, where the central bank is expected to keep interest rates unchanged.
Political uncertainty in Japan, following the ruling Liberal Democratic Party’s loss of its parliamentary majority, is adding pressure on the BOJ. The fractured political outlook could lead to a more cautious stance on future rate hikes, with increased resistance to raising interest rates. The yen, which has struggled throughout October, has faced further declines due to these factors.
Chinese Yuan Softens Amid Stimulus Focus and Economic Data
The Chinese yuan weakened slightly, with the USD/CNY pair rising by 0.1%, staying close to two-month highs. Markets are closely watching China’s Purchasing Managers’ Index (PMI) data and the country’s latest stimulus measures introduced in October.
Traders are also focused on the upcoming National People’s Congress meeting in early November, where more information on fiscal spending plans is expected.
Broader Asian Currency Trends
Other Asian currencies moved within a flat-to-lower range, reflecting cautious market sentiment. The Australian dollar (AUD/USD) dropped 0.3% after mixed consumer inflation data, which showed headline inflation decreasing in the third quarter, but core inflation remaining stubbornly high.
The South Korean won (USD/KRW) was stable, while the Singapore dollar (USD/SGD) gained 0.1%.
The Indian rupee (USD/INR) remained flat but stayed near record highs, trading above 84 rupees.
