Most Asian currencies kept to a tight range on Monday, while the dollar steadied with focus squarely on progress towards ending a long-running U.S. government shutdown.
The Chinese yuan showed little reaction to data showing a mild improvement in inflation, while the Japanese yen weakened amid growing doubts over an immediate interest rate hike by the Bank of Japan.
Regional markets grappled with a dearth of major trading cues, while caution over a U.S. interest rate cut in December also kept traders to the sidelines.
Dollar steady with eyes on shutdown The dollar index and dollar index futures rose about 0.1% each in Asian trade, steadying after logging mild declines in the past week.
Focus was squarely on Congress’ efforts to end a long-running government shutdown, which entered its 40th day on Sunday.
A slew of reports said a group of Senate Democrats had agreed to support a Republican bill aimed at funding the government until January 30.
A Senate roll call vote on the bill was still ongoing as of 22:33 ET (03:33 GMT).
The shutdown is the longest ever in U.S. history, and disrupted government services across the country. Markets were left fretting over its economic impact, given that the shutdown also delayed the release of several key government readings.
Chinese yuan moves little after positive CPI data
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The Chinese yuan’s USD/CNY pair steadied at 7.1209 yuan on Monday, showing limited reaction to positive inflation data.
Consumer price index inflation rose past expectations in October, while producer price index inflation shrank at a slower-than-expected rate.
The print was aided chiefly by robust holiday spending, although analysts were reluctant to frame it as a recovery from China’s long-running deflationary trend.
“These gains largely reflect temporary factors, most notably higher gold prices, and don’t suggest to us that China’s deflation problem is going away,” Capital Economics analysts wrote in a note.
Broader Asian currencies moved in a flat-to-low range. The Japanese yen’s USD/JPY pair rose nearly 0.4%, amid waning confidence that the BOJ will hike interest rates soon.
The Australian dollar’s AUD/USD pair rose 0.3%, while the Singapore dollar’s USD/SGD pair added 0.1%.
The Taiwan dollar’s USD/TWD pair rose 0.1%, while the Indian rupee’s USD/INR pair was flat.
