Asia FX Slumps as Fed Vice Chair Signals More Rate Pain By Investing.com



By Ambar Warrick 

Investing.com– Asian currencies fell further on Tuesday, while the dollar neared a new 20-year peak after hawkish signals from the Federal Reserve gave little indication that the central bank intends to ease up on interest rate hikes. 

China’s was the worst performer in early trade, falling 0.6% to 7.1937 against the dollar and coming close to levels last seen during the 2008 financial crisis. Concerns over China also grew as fresh COVID outbreaks raised the possibility of new lockdown measures.

Focus this week is on Chinese and , which is expected to show some improvement in the beleaguered economy. But an unexpected contraction in China’s saw markets tempering their expectations for a rebound. 

Foreign investors also appeared to be adverse to holding the yuan, with its down 0.6% and close to a record low. 

Broader Asian currencies retreated amid increased pressure from the dollar and Treasury yields. The hovered just below a 24-year low, while the and the were the worst performers in Southeast Asia with a 0.5% drop. 

A recent surge in oil prices continued to weigh on crude-sensitive currencies. The fell 0.1% and hovered just below record lows, while the fell 0.4% to a 30-month low. 

The and rose 0.2% each on Tuesday, extending gains into a sixth straight session after hawkish comments from . 

Brainard said that tight monetary policy conditions will persist even after the Fed stops hiking rates, and that the bank will keep raising rates in the near-term. Brainard also warned that the U.S. economy may weaken due to steeper rates, and that the bank will only ease policy when it is convinced that inflation is retreating. 

Reiterating the Fed’s earlier signals, Brainard said the bank will adopt a data-driven approach to raising rates further. Focus this week is on upcoming U.S. , which is expected to show that inflation remained at near 40-year highs through September. 

Following data last week showing a , markets are now pricing in a nearly the Fed will hike rates by 75 basis points for a third consecutive meeting in November. 

The dollar also benefited from increased safe haven demand, as investors feared an escalation in the Russia-Ukraine conflict after a major aerial assault against Kyiv. 

 



Source link

Related articles

Arizona governor vetoes invoice to make Bitcoin a part of state reserves

Arizona Governor Katie Hobbs has vetoed a invoice that might have allowed the state to carry Bitcoin as a part of its official reserves, successfully ending efforts to make Arizona the primary US...

Google Lifts IG France’s Advert Restrictions, XM Proprietor Buys Stake in a Cyprus Financial institution

Why brokers and prop corporations are transferring away from DiscordThough brokers and prop corporations have managed communities of merchants on publicly out there platforms like Discord, new challenges associated to compliance are driving...

Google goes to let youngsters use its Gemini AI

Google is notifying mother and father utilizing its Household Hyperlink parental controls by way of e-mail that their youngsters will quickly be capable to entry Gemini AI Apps on their monitored Android gadgets,...

Distribution Options Group, Inc. (DSGR) Q1 2025 Earnings Name Transcript

Begin Time: 09:00 January 1, 0000 9:07 AM ET Distribution Options Group, Inc. (NASDAQ:DSGR)Q1 2025 Earnings Convention NameCould 01, 2025, 09:00 AM ET Firm Contributors Bryan King - Chairman and CEORon Knutson -...

Berkshire’s board doesn’t see Buffett’s successor ‘as a CEO in prepared,’ lead director says. ‘He’s taking over the administration functionality correct now’

Berkshire Hathaway lead director Sue Decker says Buffett’s heir apparent, Greg Abel, has been embraced by the board and has been taking over a good larger administration place. Berkshire hosts its annual...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com