USDINR_This Chart Say Something_Loudly
Most Asian currencies moved little on Tuesday as the dollar tread water in anticipation of key inflation data due later in the day, while the Japanese yen weakened further ahead of more cues on the economy.
Sentiment towards regional currencies remained constrained after a large risk-off move across markets last week, while an unwinding carry trade with the yen also weighed.
Uncertainty ahead of more economic signals from China also weighed, amid persistent concerns over a slowdown in the region’s biggest economy.
Dollar steadies with CPI data on tap
The dollar index and dollar index futures moved little in Asian trade, extending a sluggish overnight performance as anticipation of the inflation data deterred big bets.
Consumer price index data, due on Wednesday, is expected to show inflation cooled slightly in July- a scenario that gives the Federal Reserve more headroom to begin cutting interest rates.
Lower rates bode poorly for the dollar. A softer inflation reading could also spark renewed concerns over a U.S. recession, inviting even deeper interest rate cuts from the Fed.
Traders are split over a 25 or 50 basis point cut by the Fed in September, with July’s inflation reading likely to factor into the decision.
Beyond the inflation data, industrial production and retail sales data is also on tap this week.
Japanese yen weakens further, GDP data awaited
Weakness in the Japanese yen persisted following some less hawkish statements from the Bank of Japan last week, with the USDJPY pair rising 0.2% to 147.48 yen.
Sentiment towards regional currencies remained constrained after a large risk-off move across markets last week, while an unwinding carry trade with the yen also weighed.
Uncertainty ahead of more economic signals from China also weighed, amid persistent concerns over a slowdown in the region’s biggest economy.
Dollar steadies with CPI data on tap
The dollar index and dollar index futures moved little in Asian trade, extending a sluggish overnight performance as anticipation of the inflation data deterred big bets.
Consumer price index data, due on Wednesday, is expected to show inflation cooled slightly in July- a scenario that gives the Federal Reserve more headroom to begin cutting interest rates.
Lower rates bode poorly for the dollar. A softer inflation reading could also spark renewed concerns over a U.S. recession, inviting even deeper interest rate cuts from the Fed.
Traders are split over a 25 or 50 basis point cut by the Fed in September, with July’s inflation reading likely to factor into the decision.
Beyond the inflation data, industrial production and retail sales data is also on tap this week.
Japanese yen weakens further, GDP data awaited
Weakness in the Japanese yen persisted following some less hawkish statements from the Bank of Japan last week, with the USDJPY pair rising 0.2% to 147.48 yen.
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