Investing.com– Most Asian currencies weakened on Thursday, while the dollar rose to its highest level in a year on data showing continued U.S. inflation, with attention now turning to an upcoming speech by Federal Reserve Chairman Jerome Powell.
Sentiment towards regional markets remained weak after China’s recent stimulus measures disappointed, while the prospect of greater US protectionism under a Donald Trump presidency also tilted traders in favor of the dollar.
Most Asian currencies have suffered significant losses over the past week, with the Japanese yen and Chinese yuan being hit the hardest.
The dollar at its highest in a year after CPI data; Powell in the crosshairs
The and the both rose nearly 0.2% in Asian trading, extending strong overnight gains.
Consumer price index data is in line with expectations for October. But the rate rose again from the previous month, while the rate remained stable and well above the Fed’s 2% annual target.
Although the reading boosted bets that the Fed will cut interest rates by another 25 basis points in December, the long-term outlook for rates has become more uncertain.
The election of Donald Trump also pushed up long-term rate forecasts, due to bets on more expansionary policies during his second term.
Focus now shifts to Fed Chairman Jerome Powell’s speech later Thursday for further guidance on interest rates. Powell reiterated the Fed’s data-driven approach to future easing after the central bank cut rates by 25 basis points last week.
Australian Dollar At 3-Month Low After RBA Comments, Jobs Data
The Australian dollar weakened slightly on Thursday, with the pair losing 0.1% to a three-month low.
Reserve Bank of Australia Governor Michele Bullock said interest rates were unlikely to rise further but would remain stable until the bank was satisfied inflation was falling further .
Bullock’s comments were accompanied by data showing Australia’s economy slowed in October after six consecutive months of strong growth. A weaker jobs market has contributed to expectations of a further slowdown in inflation, with analysts predicting the RBA will begin cutting rates from the first quarter of 2025.
Major Asian currencies weakened on Thursday and posted significant losses in recent sessions. The Japanese yen pair rose 0.3% to 155.85 yen – a more than three-month high. The yen was also close to levels that triggered the government’s latest intervention in the currency market.
The Chinese yuan pair rose 0.3% and was at its highest level in more than three months as the yuan was battered by China’s disappointing stimulus measures. Sentiment toward China has also been tested by the prospect of high U.S. tariffs on the country under a Trump administration.
The South Korean won pair rose 0.1%, while the Singapore dollar pair rose 0.2%.
The Indian rupee pair stabilized after hitting a record high of over 84.6 rupees this week.
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