In Wednesday’s trading session, most of the Asian currencies ended up taking a fall. It was during the Asian forex trading session when a slight drop in the trading values of the Asian currencies was recorded.
Federal Reserve’s Rate Hike is Expected
According to the latest reports, investors are being very cautious as they wait for the Federal Reserve to take action against the interest rates.
Many expect that the Feds would resort to increasing the interest rates, and until that happens, the investors would cease to make many investments.
On the other hand, the value of the dollar has experienced a significant slide in the latest trading session. This is because while the investors expect a high-interest rate hike, there are speculations of a low-interest hike.
According to the inside sources, the central bank is considering a low hike in interest rates compared to the high expectations of the investors.
The Japanese Yen Rose 0.7%
Just when the majority of the Asian currencies ended up taking a fall, the Japanese yen was able to buck the trend. It ended up moving in the higher direction as its value successfully gained 0.7% growth.
The major reason behind the rise in the value of the Japanese yen is the confidence of the investors about the Japanese intervention. The government of Japan is involved in hiking the value of the Japanese yen.
For this purpose, the finance ministry of Japan spent almost $43 billion in just two days to hike the value of the yen.
It was quite alarming for Japan when the value of the Japanese yen tripped and went down to a 32-year low.
The Yen Benefitted from BoJ’s Policy Tweak
The Japanese yen also benefited from the tweaks that the Bank of Japan is expected to make to the ultra-dovish polish.
The government of Japan has finally managed to bring the inflation rates under control. It would finally help the government tweak the interest rates it has been hiking to control the inflation rates.
Although the Japanese inflation rates are coming under control, still, they have come close to eight-year highs.
Price Action of Asian Currencies
In the latest trading session, the trading value of the Chinese yuan dipped by 0.1%. On the other hand, the offshore Japanese yen has risen 0.2%.
Then comes the South Korean won which has also experienced a dip in its value. As the CPI data has been positive, the economic growth is not as good as expected.
The value of the Australian dollar has managed to grow by 0.4% while the US dollar index (DXY) has recorded a 0.2% dip.
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