The Monday trading session has shown that the prices of the Asian currencies have traded in tight ranges. The trend was witnessed on Monday as most of the traders awaited updates from the US Feds.
The Feds are yet to make announcements about the monetary policy of the United States. Until the announcement is made, traders may not invest in Asian currencies.
The investors have not been making any move because they fear that the Feds may announce another hike. The hike may push the trading price of the dollar higher, which in turn would impact the rival currencies.
In such a case, the trading price of the Asian currencies may get pulled lower as the investors may go for the dollar. They may pull their investments out of the Asian currencies, selling them in abundance.
In addition to the above, Asian traders are also worried about the GDP forecast that the Chinese government has shared. The forecast is reportedly weaker than expected, which is yet another negative factor for the traders.
As the negative sentiments have weighed in on the traders, they have pulled out from the Asian forex. Thus, the trading prices of Asian currencies have recorded a downtrend.
Updates are awaited from Japan and Australia
In addition to the above, the investors are also eager to get an update from the Japanese and Australian markets.
The central banks of both countries are yet to share an update pertaining to the monetary policies. As the data suggests, both countries have been hiking the interest rates to fight off surging inflation.
However, the central banks from Japan and Australia are yet to share an update, making the traders even more hesitant. The traders are not investing in these currencies as well, which is causing a pull in their market values.
Asian Currency Performances
The report shows that the trading price of the Japanese yen has dipped by 0.1% in the latest trading session against the dollar. This happened as the government of China shared the GDP for the year 2023.
Over the weekend, government officials announced that they have set the forecast to 5%. The traders and economists were not much happy about the forecast as they had expected the figure to be higher.
The forecast shared by the officials suggests that Beijing is not ready to take aggressive steps to improve its economy. It is rather playing it safe to ensure that it achieves success.
The country has adopted a cautious stance as they aim to witness recovery for the economy in the running year.
The traders have thus, stopped investing much in the Chinese yuan. Due to recent developments, the value of the offshore yuan has also witnessed a dip. It has reportedly fallen by 0.3% in the recent trading session.
However, China may achieve a stronger than expected GDP in the running year. This is mainly because the country’s economy has started to recover at a fast rate.
The business sector as well as the manufacturing sector of the country has recovered as well. The growth that the business activity has witnessed is the highest in more than a decade.
The country has now started to recover significantly compared to the COVID-19 pandemic crisis.
China is the largest economy in the entire Asian region and the second-largest in the entire world. As it starts to recover, its positive impact would reflect on the rest of the Asian currencies.
The trading and inflation data for the Chinese economy is expected to be released in the running week. Once the data is out, the price of the yuan and the Asian currencies would start moving in a positive or negative direction.
The latest data shows that the trading price of the Australian dollar has dipped by 0.2% while the Taiwanese dollar has recorded a 0.1% decline against the dollar.
The value of the yen has surged by 0.2% while the South Korean won has remained flat.