Key Takeaways:
Most Asian currencies are trading flat to low
Growing bets on slower rate cuts by the Federal Reserve have boosted the dollar
Dollar steadied near recent peaks with focus on interest rates and upcoming presidential election
Yuan weakened after People’s Bank of China cut benchmark rates more than expected
Yen at 3-month low, affected by doubts on U.S. interest rates and Japanese government intervention
Australian dollar recovering from four weeks of losses
Traders are positioning for a 25 basis point rate cut in November, smaller than September’s 50 bps cut.
Asian currencies moved in a flat-to-low range with the Japanese yen at a 3-month low- Stimulus measures from China did not boost sentiment in Asia
The dollar steadied near recent peaks due to focus on interest rates and upcoming presidential election- The Japanese yen weakened amid doubts over U.S. interest rates and BOJ’s ability to hike rates further
New Japanese Prime Minister declared a snap election, raising uncertainty over BOJ’s rate hikes
Asian Currencies and Dollar Strength
Asian currencies have shown a trend of trading flat to low recently, with most of them facing challenges like the weakening yuan after the People’s Bank of China unexpectedly cut benchmark rates. Despite stimulus measures from China, sentiment in Asia remains subdued. On the other hand, the dollar has steadied near recent peaks, driven by growing bets on slower rate cuts by the Federal Reserve. Traders are now positioning for a smaller rate cut in November, which has further boosted the dollar’s strength.
Yen at 3-month Low
The Japanese yen has reached a 3-month low as doubts linger over U.S. interest rates and the Japanese government’s intervention strategies. The announcement of a snap election by the new Japanese Prime Minister has raised uncertainty over the Bank of Japan’s ability to make further rate hikes, contributing to the yen’s weakening position in the market.