MOST ASIAN CURRENCIES KEEP TO A TIGHT RANGE ON TUESDAY
Most Asian currencies remained within a tight range on Tuesday, under pressure from a strong dollar amid heightened speculation over the path of US interest rates and President-elect Donald Trump’s plans for trade tariffs.
The dollar was steady near a two-year high, while traders awaited key inflation data on Wednesday and expected comments from Federal Reserve officials in the coming days. The strong dollar kept traders largely averse to risk-driven markets, particularly in the face of higher-for-longer US rates.
The Japanese yen was little supported by rate hike comments from the Bank of Japan, and the currency pair rose 0.1% to reverse initial losses. Meanwhile, the Chinese yuan and the Australian dollar remained close to their highest levels since September 2023, amid speculation about more stimulus measures from Beijing and increased focus on the People’s Bank of China’s benchmark loan prime rate decision.
The Indian rupee and Singapore dollar pair was flat, while the South Korean won also remained steady. The New Zealand dollar and the Thai baht pair both edged lower.
Traders are awaiting Trump’s plans for trade tariffs, with reports suggesting a gradual imposition of tariffs to increase leveraging power and reduce inflationary shocks. The President-elect has vowed to impose steep tariffs on several countries, including a 60% duty on China from “day one” of his term.