The Dollar Crashes Into 2-Month Lows

On Friday, most Asian currencies surged. Meantime, the dollar fell to its lowest level in two months as softer-than-expected U.S. inflation data raised hopes that the Fed will halt the rate of interest rate increases. Hong Kong lifted certain COVID restrictions, which sparked rumors that China would follow suit soon. This also helped sentiment.

The Chinese yuan increased by 0.3% to 7.1669 versus the dollar. It has been a record high for more than two weeks. Due to the possibility of some COVID limitations being relaxed, local stock markets rose. The country has been experiencing its largest epidemic since May. However, Chinese authorities have downplayed recent concerns concerning such a move.

Outlook on Asian Markets

As investors prepared for a lesser rate hike by the Fed in December, broad Asian currencies increased while the dollar decreased. The Malaysian ringgit led advances in Southeast Asia with a 1.2% increase. Meanwhile, South Korean won was the strongest performer in Asia. It rose 1.7% to a level close to three months high. The Australian dollar increased by 0.1% to a one-and-a-half-month high, while the Taiwan dollar and Indian rupee increased following big rallies the previous day.

On Friday, the Japanese yen deviated from the trend and plummeted 0.6% as statistics revealed that producer price inflation increased in October at its sharpest rate in more than 40 years.