On Thursday, Asian currencies traded mixed amid the stabilization of the US dollar after the Fed's decision to keep rates unchanged. Investors await inflation data and decisions from central banks in Europe and Japan.
On Thursday, Asian currencies showed mixed dynamics, while the US dollar stabilized after the Federal Reserve's decision to leave interest rates unchanged. Market participants await new US inflation data, as well as the results of monetary policy meetings in Europe and Japan.
The Japanese yen strengthened slightly ahead of the Bank of Japan's decision, expected on Friday. The New Zealand dollar remained under pressure after the Reserve Bank of New Zealand unexpectedly kept its rate unchanged. The Japanese regulator is expected to leave the base rate at 1.25%.
One of the key indices fell to 102.17 points after the US currency retreated from its two-week high. The euro and pound sterling were almost unchanged. The dollar-yen pair fell 0.1% to 157.76. The Australian dollar was at 0.7055, the New Zealand dollar at 0.5622.
The Federal Reserve on Wednesday kept rates unchanged, with a 10-2 vote. The regulator improved its assessment of economic growth, describing activity as expanding at a high pace. The decision halted further changes in borrowing costs, as the central bank awaits additional inflation data. The next meeting will take place after the US midterm elections.
Fed Chair Kevin Warsh expressed confidence that inflation could return to the 2% target without significantly affecting economic slowdown or rising unemployment. His comments provided no clarity on a possible rate hike in December. According to CME FedWatch, markets price in a 78% probability of such a move.
Investors' attention is focused on September PCE data, due later on Thursday. Also expected is the ECB decision, where the deposit rate is likely to remain at 2.50%.
The New Zealand dollar stabilized at 0.5622 after falling 1.7% the previous day. The Australian dollar traded near a monthly high after the release of quarterly inflation data showing consumer prices rising 1.3%. The Reserve Bank of Australia head noted that the sufficiency of four rate hikes this year would be assessed at the next meeting.
The region saw uneven dynamics. Pairs with the Chinese yuan were almost unchanged. The South Korean won strengthened by 0.6%. The pair with the Indian rupee rose 0.07%, with the Thai baht 0.16%, while the Taiwan dollar weakened 0.5%.