Asian Currencies Are Jumping With Fed and Inflation
WHAT YOU SHOULD KNOW
- The signs of easing US inflation are showing up
- Investors are absorbing data regarding consumer and producer price inflation
On Friday, most Asian currencies remained unchanged as investors balanced signs of easing US inflation. This came against Federal Reserve officials’ statements that suggested further interest rate increases were inevitable. Fed and inflation
played a median role in driving money.
The Chinese yuan was primarily unchanged against the US dollar, while the Indian rupee and Singapore dollar traded without much change. There was less confidence in China due to a new lockdown in the industrial city of Yiwu and some areas of the Hainan province. COVID-related lockdowns have severely hurt China’s economic growth this year.
The emphasis is now on vital Chinese industrial production and retail sales figures due next week to measure the economy’s strength. Overall sentiment in Asia was subdued as investors absorbed data suggesting that both consumer and producer price inflation in the United States slowed in July.
The Federal Reserve will keep raising interest rates until inflation falls back to the targeted annual rate of 2%. According to Reuters, San Francisco Fed President Mary Daly stated on Thursday that she is open to a 75 basis point rise in September. She further stated that the central bank has many measures to take if they wish to contain inflation. Investors are bracing for a rate hike upcoming in September
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