Asian currencies gain against dollar

0

SINGAPORE: The US dollar retreated in Asia on Tuesday in cautious trading as investors awaited the release of key US economic data that could influence a Fed decision on interest rates.

The Australian dollar also gained against the US currency after the Reserve Bank of Australia held interest rates at a record low 2.0 percent, but kept the door open for further easing as the economy slows on softening Chinese growth.

Japanese financial markets were closed for a holiday.

“In what is going to look like a bumpy week, investors are rather cautious,” Bernard Aw, market strategist at IG Markets in Singapore, told Agence France-Presse.


He said investors are easing their US dollar positions as they await fresh US economic data this week expected to give a clearer picture of the health of the world’s biggest economy, including the closely-watched non-farm payrolls.

“Investors are paring back their long dollar positions and this is helping Asian currencies,” Aw said.

He added that the US data would “set the tone” for more speculation on the next move by the Federal Reserve on interest rates.

The Fed has so far held back from the first interest rate rise since 2006, citing sluggish global economic conditions.

Last month, however, members of the policy-setting Federal Open Market Committee hinted they might raise rates during their last meeting of the year in December.

An increase in US interest rates would typically swing investments into the United States for higher returns and boost the US currency.

In Singapore trade at around 0620 GMT, the US dollar was down against the Singapore dollar, Taiwan dollar, South Korean won, Philippine peso, Indonesian rupiah, Indian rupee, Chinese yuan, Malaysian ringgit and Thai baht.

The dollar was trading at 120.6855 Japanese yen, down from 120.77 in late US trade on Monday.

The euro turned higher at $1.1019 from $1.1014 but was lower at 132.9833 yen from 133.02 yen.

The Australian dollar was up 0.67 percent at $0.7195 after the RBA decision, but the New Zealand dollar eased 0.01 percent at $0.6743.

“RBA left the cash rate at a record low of 2.0 percent, but indicated that weaker inflation levels may allow the bank to ease policy again if needed,” Singapore’s United Overseas Bank said in a note.

AFP

Share.
.
Loading...

Please follow our commenting guidelines.

Comments are closed.