Investing.com – Most Asian currencies were flat on Monday, while the dollar steadied in weak trade as markets await new U.S. interest rate signals from key inflation data due later this week.
Market holidays in the UK and US have limited trading volumes, as has a lack of immediate signals.
Most regional currencies have suffered some losses since last week after a series of warnings from the Federal Reserve led traders to gradually recalibrate expectations for an interest rate cut by the central bank.
Dollar Stabilizes, PCE Inflation Expected
Asian trade was little changed, stabilizing after last week’s rebound.
The focus this week has been solely on the data – the Fed’s preferred inflation gauge – due out on Friday.
The dollar has strengthened in recent sessions as traders gradually shrugged off expectations for a Fed rate cut this year.
Traders are now pricing in a strong likelihood that the Fed will keep interest rates steady even into September, according to data from .
The prospect of higher and longer rates bodes well for the dollar and bad news for risky Asian currencies.
Firms dealing with the Japanese yen and the Asian currency market are generally muted
The Japanese yen saw some relief on Monday as low trading volumes led traders to expect more potential government intervention to support the currency.
The last time government intervention was seen was during the labor market holiday on May 1st, which caused deep losses for the USDJPY pair. But the pair have since clawed back most of those losses throughout May.
data from Tokyo along with readings will also be released later this week.
Other Asian currencies were muted. The Australian dollar rose 0.1%, while the Chinese yuan rose slightly after a stronger-than-expected midpoint.
Data on Monday showed the Chinese market rose steadily in April.
The South Korean won was slightly lower, while the Singapore dollar was little changed.
The Indian rupee pair was also little changed but marked a sharp decline from record highs over the past two weeks.