Asian exchange rate gains on weak dollar ahead of Trump inauguration, BoJ rate decision looms By Investing.com
Investing.com– Most Asian currencies rose on Monday as the dollar weakened ahead of the inauguration of US President-elect Donald Trump, while China’s central bank kept benchmark lending rates unchanged to support the yuan.
Regional currencies saw modest gains as markets remained cautious ahead of Trump’s inauguration in anticipation of additional trade tariffs on Chinese exports. This could trigger a trade war and affect most Asian economies due to their trade-reliant economies.
During Asian trading, the index was lower by 0.3%, retreating from a 26-month high reached last week. The dollar has remained consistently near its highest level in two years after the Federal Reserve turned hawkish last month.
they also fell by 0.3 percent.
China’s yuan is largely muted even as the PBOC keeps key lending rates on hold
The onshore pair of the Chinese yuan rose 0.1%, while the offshore pair gained 0.2%.
The Chinese yuan traded in a narrow range on Monday, showing little reaction to the People’s Bank of China’s decision to keep its main lending rates steady.
The PBOC kept its one-year rate unchanged at 3.1% and kept the , which is used to set mortgage rates, at 3.60%.
The move, aimed at supporting the yuan’s weakening, maintaining liquidity and supporting economic recovery, had little effect on market sentiment for the currency.
A decision on interest rates in Japan and Malaysia is awaited
The Japanese yen pair fell 0.3% as markets priced in a rise in interest rates due later this week.
The BOJ is expected to raise interest rates next week, provided there is no market disruption following Trump’s inauguration. The central bank is likely to reiterate its commitment to raise interest rates further if the economy sustains its recovery, Reuters reported on Friday, citing sources familiar with the matter.
The Malaysian ringgit fell 0.1% ahead of the . BNM is expected to hold rates steady at 3.00% for the 10th consecutive meeting on Wednesday on strong economic growth and contained inflation, a Reuters poll showed.
Elsewhere, the Australian dollar rose 0.2%, while the Singapore dollar pair fell 0.3%.
The Thai baht remained largely unchanged, while the Indian rupee pair fell 0.1%.
South Korea’s won fell 0.4% amid the country’s ongoing political crisis.
