Asian Forex Makes A Slight Movement While US Dollar Takes A Steady Stance

In the Monday trading session, most of the Asian currencies proved that they were not going to lose to the US dollar that easily.

The values of the Asian currencies gained a slight momentum in the positive direction. On the other hand, the value of the dollar did not lose to the Asian currencies.

The Asian forex traders were not convinced that they had witnessed a positive movement following the recent session.

For them, it is just a slight movement that the Asian forex market has made and it is not decisive at all.

Based on the recent performance of the Asian forex, they cannot judge that the market is making a positive movement. They simply cannot predict if the Asian forex has entered bullish territory or not.

Dollar Price Steadied

Compared to the slight movement of the Asian forex currencies, the trading price of the dollar became steadier.

This happened because the USD traders are waiting for the US Feds to make more announcements about the monetary policy.

For now, they are looking for signals to be given by the Feds that may give them a direction. Given the recent CPI data, it is highly likely that the Feds may stick with their current monetary policy.

This means that they may keep up with the interest rate hikes. This means that the trading price of the US dollar may keep on rising, granting it strength against the currencies.

As per the economists, the Feds may soon share more data pertaining to the country’s economy. As soon as they do, it will be confirmed which side the Feds are looking for.

This would set the trend for the dollar into a new course and given the recent data, it will be a positive movement.

It will be later in the week when the Feds will announce and share more data on the economy. That is when the dollar price will start making its real movement in the ongoing week.

Past Week Performance

The past week saw a significant movement in the trading price of the dollar. It reportedly went up as the US inflation data was alarming for the Feds.

The inflation data reportedly came in hotter than the Feds had predicted in the first place. This meant that the Feds needed to keep the monetary policy intact, which ensured that the interest rates would be kept hiking.

With the Feds expected to tighten the monetary policy, the dollar will move upstream, bringing more investors to its support.

Slight Pump in Dollar’s Price

In the past week, the value of the dollar had continued rising due to the hot inflation data. The dollar price index rose 0.1% in the past week and which was a positive sign for the dollar.

Although the push was very low it did show that the dollar was outperforming the majority of the currencies in the market.

The dollar has been performing well against the major currencies and if things go well, the current week would mark 6 consecutive weeks for the dollar experiencing an uptrend.

Near-Term Expectations for Interest Rates

As per the US government representatives, the near-term monetary policy would remain tight. Even the jobs data in the United States seems encouraging for the Feds to continue with their interest rate hikes.

With the economic conditions falling in favor of the Feds, they may continue hiking the interest rates until they are able to tame the inflation rates.

If the interest rates keep on hiking, then the US Feds will have increased the interest rates by over 6% by the end of 2023.

Given the recent developments in the US economy, the value of the yen has gained a slight increase against the dollar.

It is mainly because of the Bank of Japan’s constant interest rate hikes to control inflation that the yen is strong compared to other Asian currencies.

The Chinese yuan remained muted against the dollar while the Philippine peso recorded a 0.7% surge against the dollar.