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Investing.com — Most Asian currencies remained flat on Wednesday, as the dollar retreated from more than two-year highs as traders awaited key consumer inflation data that could weigh on interest rates.
US President Donald Trump has been eyeing plans for more trade tariffs, as have comments from several Federal Reserve officials.
Traders were awaiting China’s interest rate decision and labor market data from Australia in the coming days – for further signs on Asian markets.
The Chinese yuan hovered at a 16-month high, while the Australian dollar fell 0.2 percent to a five-year low.
Concerns about higher US rates weighed on most Asian currencies. The Japanese yen pair was flat, with little support from the Bank of Japan amid comments that the central bank will debate raising interest rates when it meets next week.
The Singapore dollar pair added 0.1% while the Indian rupee pair edged higher after touching a record high of over 86.6 rupees. Indians fell to a four-month low in December, data showed on Tuesday.
Dollar hovers below 2-year CPI hit
And stable in Asian trade after falling from a more than two-year high in overnight trade.
The dollar’s weakness was largely driven by a better-than-expected inflation data reading in December. The reading prompted some hopes that inflation would ease and give the Fed more room to cut interest rates.
But some parts of the PPI reading — data-driven, the Fed’s preferred measure of inflation — read stronger for December, indicating that underlying inflation is higher.
Focus is now squarely on inflation data, due later Wednesday, for signs of further interest rate hikes. The reading comes amid growing concern that sticky inflation will keep US interest rates on hold for longer, especially after the Fed warned of slower rate cuts this year.
The focus was on Trump’s trade tariff plan, which central bankers warned could increase long-term inflation. According to reports this week, Trump’s team was planning to gradually increase tariffs.
South Korea won after President Yoon was arrested.
South Korea’s winning couple have remained calm since local media reported the arrest of President Yoon Suk-yeol in a failed attempt to lift martial law in December.
In their second attempt this month to arrest the president, authorities arrested Yoon at the presidential compound, where he is now facing sedition charges.
Yoon’s arrest marks a possible end to the high level of political unrest in South Korea since his impeachment in early December. Since 2009, the winner has been reduced to a weak position in the midst of high political unrest.
