The Chinese yuan was among the better performers for the day, increasing 0.2 per cent to 7.1428 against the dollar after a substantially stronger-than-expected daily midpoint fix from the People’s Bank
Most Asian currencies kept to a tight range on Thursday as some indications of resilience in the U.S. labour market lifted the dollar and caused uncertainty over the course of interest rates.
Regional trading volumes were down on account of market holidays in the U.S. and Japan, and are expected to stay muted for the remainder of the week.
The Chinese yuan was among the better performers for the day, increasing 0.2 per cent to 7.1428 against the dollar after a substantially stronger-than-expected daily midpoint fix from the People’s Bank.
Markets were also watching for any more stimulus measures from the government, as Beijing was seen preparing more monetary support for the troubled property sector.
Focus is now on Chinese PMI data for November, due next week, for more cues on the economy after a series of weak readings for October.
Among other Asian currencies, the Japanese yen added 0.3 per cent in holiday-thinned trade, but was nursing sharp overnight losses as the dollar rebounded. Consumer inflation data for October is due on Friday, and is expected to provide more cues on the BoJ’s plans for its ultra-dovish monetary policy.
The Australian dollar added 0.2 per cent as Reserve Bank Governor Michele Bullock reiterated her warning over inflation, which could potentially invite more interest rate hikes from the central bank in the coming months.
The South Korean won gained marginally, while the Indian rupee stayed near record lows. The Indian currency reached a record low of 83.565 this week as constant dollar demand from local importers largely offset weakness in the greenback.
India’s large trade deficit has been a major point of pressure for the rupee, which reached a series of record lows against the dollar this year.
