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Asia forex lower, dollar steady ahead of economic data

Asia stocks down

The dollar index and dollar index futures moved little in Asian trade on Monday, as markets awaited key U.S. economic data this week

Most Asian currencies weakened slightly on Monday, while the dollar stabilised as traders prepared for a string of key economic data due this week.

Mixed signals from China weighed on sentiment, as figures showed a sustained, although narrowing drop in industrial profits. Top Chinese government officials called on Beijing to unlock more financial support for local businesses amid a slowing economic recovery.

The yuan dropped 0.1 per cent, after a slightly weaker daily midpoint fix by the People’s Bank of China. Focus this week was on PMI data for November, due on Thursday, for more indications about business activity. PMI readings for October had largely missed expectations.

Still, Beijing has more stimulus measures lined up in the coming months, specifically a $139 billion bond issuance, which is expected to bolster growth.

But near-term sentiment towards China remained largely weak, which in turn kept wider Asian markets down.

The Australian dollar dropped 0.2 per cent, with focus also turning to key inflation and retail sales figures due later in the week. Reserve Bank of Australia Governor Michele Bullock is also set to speak on this week, after she cautioned that inflation will likely remain sticky in the coming months.

South Korea’s won dropped 0.1 per cent ahead of a Bank of Korea rate decision this week, with the central bank broadly expected to keep rates on hold.

The Indian rupee stayed near record lows, while the Thai baht led gains across Southeast Asia with a 0.4 per cent increase, even as data showed the country swinging to a surprise trade deficit in October.

The Japanese yen was among the better performers for the day, increasing 0.4 per cent. Japanese industrial production and retail sales data is also on tap this week.

Most Asian currencies marked strong advances through November, amid growing hopes that the U.S. Fed was done hiking rates. This trend had also battered the dollar, putting it near three-month lows.

But markets were now awaiting a fresh batch of economic readings for more hints on monetary policy.

The dollar index and dollar index futures moved little in Asian trade on Monday, as markets awaited key U.S. economic data this week.

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