Fri, September 29, 2023

Asian Markets Under the Pressure of Crushing Rate Hikes

Background,Of,Asian,Currency.

On Tuesday, Asian currencies continued to decline, and the dollar came close to reaching a new 20-year high as the Federal Reserve’s hawkish comments failed to convey any intention of slowing its pace of interest rate increases.

The weakest performer in the opening of trade was China’s onshore yuan, which dropped 0.6% to 7.1937 vs. the dollar and approached values last seen during the 2008 financial crisis. Fresh COVID breakouts increased the likelihood of more lockdown measures, which added to concerns about China. This week’s attention will be on Chinese inflation and trade data, which should indicate some recovery in the struggling economy. However, the unexpected decline in China’s services sector caused investors to moderate their hopes for a recovery.

What Is Happening Inside the Market?

The offshore version of the yuan was down 0.6% and near a record low, suggesting that foreign investors did not favor keeping the currency. Wider Asian currencies fell as the dollar, and Treasury rates exerted more pressure. The Thai Baht and the Malaysian Ringgit had the worst performances in Southeast Asia, falling by 0.5% each, while the Japanese yen was hovering just around a 24-year low.

Crude-sensitive currencies continued to suffer from a recent spike in oil prices. While the Indonesian rupiah dropped by 0.4% to a 30-month low, the Indian rupee declined by 0.1% and was hovering just above record lows. Following hawkish remarks by Fed Vice Chair Lael Brainard on Tuesday, the dollar index and dollar futures increased by 0.2%, extending gains for a sixth straight day.

According to Brainard, even after the Fed stops raising rates, restrictive monetary policy circumstances will continue, and the bank will likely continue raising rates shortly. Additionally, Brainard cautioned that higher rates may cause the US economy to deteriorate and that the bank will only loosen policy once it is confident that inflation is declining.

YOU MAY ALSO LIKE

amazon

In the rapidly evolving landscape of artificial intelligence (AI), tech titans are

Economy and main challenges

In the ever-evolving landscape of global economic activity, some nations emerge as

Oil

Oil profit remains a central focus for investors and traders as the

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked *

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

New Middle Eastern FX/CFDs Broker

In a stride to broaden its reach, Daman Securities from the United Arab Emirates has embarked on a new journey by launching Daman Markets. This innovative platform will focus on trading services for

BROKER NEWS

Broker News

New Middle Eastern FX/CFDs Broker

In a stride to broaden its reach, Daman Securities from the United Arab Emirates has embarked on a new journey by launching Daman Markets. This innovative platform will focus on trading services for over-the-counter