Asian Currencies Muted

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Asian Currencies Muted

Asian Currencies Muted On Us Dollar Weakness

Asian currencies remained muted on Monday and only traded in a tight range. This comes at a time when the US Dollar has turned soft on concerns of recession in the US economy.

However, the one outlier among the Asian currencies was the Japanese Yen which has gained on the safe haven demand. Also, the chances of additional rate hikes in the future by the BoJ are also helping the JPY.

Meanwhile, the Chinese Yuan has also gained after the PBoC's midpoint fix which was a lot stronger than the expectations.

Boj'S Rate Hike Sends Jpy Higher

The overall sentiment in the regional markets was not so great due to the weaker US data and the higher chance of upcoming rate cuts.

The top pair was the USD/JPY, which declined by almost 1.4%. After the recent selling, the USD/JPY is now trading at 144.53, the weakest level since the start of January.

On the one hand, the US Dollar has turned softer on account of upcoming rate cuts and the recession fears. On the other hand, the recent rate hike from the BoJ along with a high chance of more to come has helped the JPY.

For now, the DXY is down by 0.3% on Monday which is the lowest level in the last 4 and a half months. Despite this, the risk appetite in the Asian markets remains weak as most of the regional currencies had limited gains.

The AUD/USD is down by 0.3% ahead of the RBA's meeting on Tuesday. According to experts, the RBA will make no change in the monetary policy despite the soft inflation.

USD/CNY also showed a change of -0.3% for the day, which has pushed this pair to a 6-month low. According to experts, the strength of the CNY is the result of the PBOC's midpoint fix. Last but not least, the USD/KRW showed a change of +0.2%, a rare case among the Asian currencies.

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