The Dollar Founds A Strong Ground While The Asian Currencies Face Demise Before CPI ReadingsJanuary 14, 2023
The Wednesday trading session was not a good sight for investors from the Asian forex market. They saw the prices of most of the Asian currencies move in the negative direction while the dollar surged.
The USD traders were glad to see the trading session bring in positive outcomes for the greenback. On the other hand, the Asian forex traders were not feeling lucky at all.
The values of most of the Asian currencies moved in the negative territory. The traders are being careful with respect to their decisions as the CPI data from the US economy is expected to come out soon.
Therefore, the investors are not taking risks going for the high-risk assets. No one knows what the data is going to show so the investors are not willing to take any major risks.
This is the reason why the value of the dollar has started to gain momentum versus the Asian currencies.
The investors now wait for the key inflation that the Feds are expected to share very soon. Therefore, the investors are not willing to go for assets that may end up bringing them losses.
Asian Currencies had a Promising Start
The Asian currencies started their week on a positive note. The currencies were doing very well in the forex markets but the dollar finally caught up to them.
It has forced the Asian forex traders to step back, which has managed to push the dollar ahead of them. It is all because of the inflation data that is to be shared by the Feds.
As of now, the Asian forex market is filled with uncertainty. Although the same case is with the dollar the investors are hoping that the inflation data will be positive.
In such a scenario, there will be great uncertainty as to what the Feds would do next. Many investors are expecting the inflation data to come out to be positive.
If it is stronger than expected, then the situation around the monetary policy of the US will be uncertain. If the interest rates surge, then the dollar price will eventually move higher.
In that case, the trading price of the dollar will edge even higher and the Asian currencies will move downwards. However, the situation may change if the Feds decide to lower the interest rate hikes.
The DXY Trades at 0.1%
The latest trading session has shown that the USD index is currently trading at positive 0.1%. The performance of the dollar versus the major currencies is quite impressive.
It suggests that the dollar has gained momentum against the major currencies and may continue with the same trend.
Now, all eyes are on the consumer price index (CPI) data from the United States. The data is expected to come out for the month of December.
It will provide a clearer picture of where the US economy is headed. Based on the data, the Feds will decide what their next course of action would be in terms of dealing with the interest rates.
The demise of the Asian Forex
The latest report suggests that the trading price of the Japanese yen has recorded a dip in its value against the dollar. The yen’s value has dived 0.1% against the dollar.
The inflation data for Japan is also pending in the running week. Based on the results, the Bank of Japan may announce the next interest rate action. If the decision is to hike the rates, then the yen price will surge.
The situation was different for the Chinese yuan as its value surged higher against the dollar. The data shows that the value of the yuan has recorded a 5-month high versus the greenback.
The Australian dollar value has surged by 0.3% against the dollar. The value of the Indian rupee has dipped 0.1% versus the dollar while the Thai baht and the Philippine peso have dipped 0.2% and 0.3% respectively.