Asian Currencies Remain Muted

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Asian Currencies Remain Muted

Asian Currencies Remain Muted After March Nfp

Most of the Asian currencies showed little movement after the release of the nonfarm payrolls for March. However, the one outlier is the Japanese Yen (JPY) which is sitting comfortably at 2-week highs.

While the Asian currencies are under pressure, the USD is seizing the opportunity with upside against all of its peers. It appears that the rate cuts in June are no longer a done deal based on the recent NFP report. Meanwhile, the Dollar is also enjoying the upbeat comments from Fed officials, including Kashkari.

Labor Market &Amp;Amp; Inflation Weighs On Fed

If we look at how the Fed thinks, the two key factors that will decide the interest rate policy are the labor market and inflation. A look at inflation shows that progress has been stalling while the labor market is also very strong.

Besides these two factors, the next key economic release is the US CPI which will provide a much needed insight into the interest rate policy.

Starting with the Japanese Yen (JPY); the pair is at weekly lows, which highlights that JPY remains the outlier with sizeable gains for the week. However, the JPY's strength has more to do with intervention fears rather than the economic strength of Japan.

Australian Dollar, another prominent currency from Asia, showed a decline of 0.3% on the day after a weak trade balance reading. It appears that China's exports of iron ore have gone down due to weak demand.

There's no news from China, as the markets remained closed for the day. The USDCNH pair (offshore) showed a little upside and was seen near 7.2.

South Korean Won also showed weakness as the USDKRW gained 0.2% for the day. As for the USD/INR, the pair remained flat due to the upcoming RBA later that day. According to experts, the internet rate in India will remain near 6.5%.

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