On Friday, Asian currencies showed mixed dynamics: the yen remained stable ahead of the Bank of Japan decision, while the US dollar weakened amid the decline in AI stocks.
On Friday, Asian currencies showed mixed dynamics. The Japanese yen remained relatively stable in anticipation of the Bank of Japan's monetary policy decision. The US dollar, meanwhile, weakened along with Treasury yields amid a new wave of sales of stocks of companies related to artificial intelligence.
Investors assessed the prospects for global interest rates after the Federal Reserve, the European Central Bank and the Reserve Bank of New Zealand left borrowing costs unchanged this week. The Bank of Japan's decision is set to conclude a busy week of central bank meetings.
The US dollar index fell 0.3% to 101.76. The USD/JPY pair declined 0.2% to 157.51. The EUR/USD pair rose 0.1% to 1.1195, while GBP/USD added to 1.3391. For the month, the yen could lose about 0.2% against the dollar, while the euro is heading for a 1.2% decline.
The Bank of Japan is expected to keep the key interest rate at 1.25%. Markets are counting on fairly hawkish rhetoric from the regulator: traders are pricing in an about 80% chance of a rate hike in December. This decision follows rate holds by the Fed, the ECB and the RBNZ.
The Australian dollar was little changed at 0.7033 US dollars. Since the start of the month it has risen about 1.2%. Australian inflation for September rose to 4.3% year-on-year against a forecast of 4.2%. The producer price index for the quarter increased 1.1%. The Reserve Bank of Australia meeting is scheduled for next week.
The South Korean won showed volatility amid fluctuations in technology stocks. The USD/KRW pair fell 0.11% to 1337.82. A member of the Bank of Korea board noted that the won's strengthening had occurred faster than expected and the regulator is closely monitoring exchange rate volatility.