The majority of Asian currencies benefited from a weaker dollar, which pushed it up a bit on Tuesday and the Australian dollar plummeted after the central bank increased rates, but not as much as expected.
It was reported that the Australian dollar decreased 0.8 percent to $0.6466 and it was announced that the Reserve Bank of Australia increased the interest rate by a lesser amount than 25 basis points (bps). The central bank announced that it will try to maintain the balance between tackling inflation and making sure that abrupt rate hikes aren’t a drag on economic growth.
Although the RBA continued to signal rates of interest this year, this was negative on the Australian dollar because the gap between the local and international interest rates grows.
The Australian economy is struggling due to the rate of inflation rising to a 20-year high caused by the rise in prices for food and fuel. The RBA has increased rates six times in the first half of this year.
Broader Asian currencies gained after a flurry of weak U.S. economic data spurred speculation that the Fed will ease its hawkish tone in order to avoid future economic turmoil. In the dollar index, and in futures contracts for it. dollars index and the dollar futures both dropped 0.1 percent, which have been on the decline for four consecutive days. losses.
A week-long vacation across China as well as Hong Kong made for languid trade volumes across the region.
However, China’s offshore currency, the yuan increased 0.2 percent, regaining from a record-breaking low that was hit in the last month.
China has announced an array of initiatives to boost the recovery in the yuan. These include more bullish daily fixations and interventions in the markets for currency.
Analysts warned that the an increase in U.S. interest rates and the strong dollar could continue increasing pressure on the yuan in near future, given the fact that Chinese interest rates have sunk considerably below the global average this year.
The South Korean won gained 0.2 percent, rebounding from a 13-year low and the Indonesian Rupiah increased by 0.1 percent.
It was reported that the Japanese currency, the yen was a bit more volatile by slipping 0.2 percent and coming close to a record low of 145 against dollar. The yen was under pressure due to figures showing that the rate of inflation in Tokyo reached an eight-year record in September, which points to the possibility of more economic-harmful inflationary pressures on Japan.
The rise in oil prices has weighed on the Indian rupee that dropped 0.1 percent.
