Key Takeaways:
Most Asian currencies trading in a tight range on Friday amid uncertainty over interest rates and Trump’s inauguration
Chinese yuan strengthened slightly after better-than-expected GDP data for the fourth quarter
Regional currencies found relief from dollar’s slide after soft inflation data, while U.S. economy still showed resilience
China’s GDP grew 5.4% in the fourth quarter, meeting Beijing’s 5% forecast for the year
China-exposed currencies like the Australian dollar, South Korean won, and Singapore dollar firmed slightly
Indian rupee steadied just below record highs, Japanese yen near strongest level in nearly one month- Bank of Japan officials hinted at possible interest rate hike next week due to strong wage growth and spending
Dollar index steadied after tumbling from over two-year high, trading 0.7% lower for the week
Asian Currencies Trading Amidst Uncertainty
Most Asian currencies were seen trading in a tight range on Friday as uncertainty loomed over interest rates and the upcoming inauguration of President Trump. The market sentiment was cautious as investors awaited further clarity on these key factors.
Chinese Yuan Strengthens Post GDP Data
The Chinese yuan experienced a slight strengthening after the release of better-than-expected GDP data for the fourth quarter. China’s GDP grew by 5.4% in the last quarter, meeting Beijing’s forecast for the year. This positive economic data contributed to the growth of China-exposed currencies like the Australian dollar, South Korean won, and Singapore dollar.
Monetary Policy Speculations in Japan
Bank of Japan officials hinted at a possible interest rate hike in the upcoming week, citing strong wage growth and spending in the economy. This news led to the Japanese yen hovering near its strongest level in almost a month. Meanwhile, the dollar index steadied after a decline from a two-year high, trading lower for the week.
Regional Currencies Find Relief
Regional currencies found relief from the dollar’s slide following soft inflation data, despite the continued resilience of the U.S. economy. The Indian rupee steadied just below record highs, showcasing a mixed sentiment in the Asian currency market amidst ongoing economic uncertainties.