Investing.com– Most Asian currencies were little changed on Wednesday, while the dollar steadied near recent highs, with attention turning squarely to upcoming U.S. inflation data for more clues on interest rates.
The dollar has soared over the past week, while most Asian units have weakened following Donald Trump’s victory in the 2024 presidential election. Uncertainty over the consequences of a second Trump presidency for Asia has not disappeared.
Traders also awaited further stimulus from China, after the country’s latest round of fiscal measures was disappointing.
Dollar near 4-month high with CPI data and Fed in sight
The and stabilized in Asian trading after falling slightly from a four-month high in the previous session.
Traders invested in the greenback betting that Trump will introduce more expansionary policies, which could support inflation in the coming years.
But that trade ground to a halt on Wednesday, with attention turning to key data later in the day. The reading should show that inflation remained stable in October.
The October CPI reading also comes after Minneapolis Fed Chief Neel Kashkari warned Tuesday that any increase in inflation could cause the Fed to keep rates on hold.
His comments prompted traders to reduce their bets on a 25 basis point cut in December, with traders estimating a 64.2% chance of a cut, down from 66.7% yesterday, according to the .
Other Fed officials are scheduled to speak this week, including on Thursday.
Asian currencies remain subdued amid US uncertainty and Chinese fears
Most Asian currencies were little changed on Wednesday, stabilizing after significant losses in recent sessions, with traders remaining largely risk-averse.
China’s disappointing fiscal measures also dented regional sentiment, after Beijing failed to present targeted measures to support private spending and the real estate market.
The yuan pair fell 0.1% on Wednesday, after hitting a three-month high this week.
The Japanese yen weakened further this week, with the pair rising to near 155 yen on Tuesday. Uncertainty over Japan’s political and monetary outlook also weighed on the yen, amid expectations that the gap between U.S. and local rates will persist for longer under Trump.
The Australian dollar pair remained stable on Wednesday, as did the South Korean won pair.
The Indian rupee pair held near record highs of 84.5 rupees, little supported by data that showed India’s CPI inflation rose much more than expected in October.
