Most Asian currencies edged higher on Monday. The focus keyphrase, Asian currencies, gained as the US dollar weakened. Markets were cautious ahead of Trump’s inauguration, expecting potential trade policies.
The US Dollar Index fell 0.3%, retreating from recent highs. This shift follows the Federal Reserve’s hawkish stance last month. The weakened dollar benefited Asian currencies, which rely heavily on trade.
The Chinese yuan showed minimal movement on Monday. The People’s Bank of China (PBOC) kept key loan rates steady. These decisions supported the yuan but didn’t alter market sentiment.
The onshore USD/CNY rose 0.1%, while offshore USD/CNH gained 0.2%. The PBOC’s one-year loan prime rate stayed at 3.1%. Its five-year rate, linked to mortgages, remained at 3.6%.
The Japanese yen slipped 0.3% as traders anticipated action from the Bank of Japan (BoJ). Speculation about rate hikes arose amid Japan’s steady economic recovery.
In Malaysia, the ringgit fell 0.1% as markets awaited Bank Negara Malaysia’s (BNM) decision. Analysts expect BNM to maintain rates at 3.00% due to controlled inflation.
Elsewhere, Asian currencies varied in performance. The Australian dollar rose 0.2%, while the Singapore dollar dipped 0.3%. The Indian rupee fell 0.1%, reflecting market caution.
The South Korean won dropped 0.4% amid political uncertainty. The Thai baht remained steady, showing resilience despite global market shifts.
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Asian currencies gain as the US dollar weakens. Markets watch Trump policies and BoJ rate decision closely.
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