Most Asian currencies went up slightly on Friday, but sentiment was still hurt by the Federal Reserve’s hawkish stance. Now, people are looking to the upcoming U.S. payroll data for more information about the U.S. economy.
China’s yuan was one of the best performers in early trading, rising 0.3% from a near 15-year low hit earlier in the week. From a record low, the offshore yuan went up 0.5%.
But the yuan was set to end the week 0.7% lower after China denied rumours that it plans to ease restrictions on COVID-19 by next year.
Related: Stocks in Asia go up on hopes that China will open again.
This year, China’s economic problems have been caused by the “zero COVID” policy, which has stopped economic growth. This week, Chinese markets rose briefly because of rumours that they might be changed.
After the Federal Reserve raised interest rates as expected, the dollar fell a little bit on Friday, but it stayed close to a two-week high. The central bank predicted that U.S. interest rates would peak at a higher level than was first thought. This is expected to make the dollar stronger in the coming months.
The dollar index and dollar index futures both went down by 0.2%. But both were expected to gain nearly 2% this week, which would be their best gain since the middle of September.
Now, attention is on the U.S. nonfarm payrolls data for October, which is due out later in the day. Even though the reading is likely to show that growth in the jobs market slowed a bit from the month before, any signs of strength in the area will likely give the Fed enough economic room to keep raising interest rates.
The dollar’s short-term weakness helped the Japanese yen rise by 0.2%. Also, data showed that Japan’s services sector grew at its fastest rate in four months in October. This was because most COVID-related restrictions were lifted.
But the yen was about to end a two-week run of gains because the difference in interest rates between Japan and the U.S. was getting bigger and short bets were high.
The Philippine peso was one of the Southeast Asian currencies that went up by 0.8% after data showed that inflation went up much more than expected in October. The reading is likely to make the Philippine central bank raise interest rates again, which will help the peso.
With a drop of more than 1%, the currency was also one of the worst performers this week.
Related: A Asian Trade poll predicts that China’s exports will drop even more in October as global demand falls.
The Australian dollar went up 0.8%, getting back to where it had been for almost two weeks. But the currency was also expected to drop by more than 1% this week after the Reserve Bank’s latest meeting, where it sounded like it was leaning toward easing monetary policy.
