Most Asian currencies moved in a tight range on Wednesday as traders fretted over the Federal Reserve’s plans to cut interest rates in December, while the dollar steadied before a key vote to end an ongoing U.S. government shutdown.
Most regional currencies remained on the backfoot as uncertainty over the U.S. economy favored the dollar and safe havens such as gold. Uncertainty over the fate of U.S. President Donald Trump’s trade tariffs, amid scrutiny of the measures by the Supreme Court, also weighed.
Among Asian currencies, the Japanese yen’s USD/JPY pair rose 0.1% and was at its highest level since early-February.
The Chinese yuan’s USD/CNY pair was flat, as was the Australian dollar’s AUD/USD pair.
The Singapore dollar’s USD/SGD rose 0.2%, while the South Korean won’s USD/KRW rose 0.5% to a seven-month high.
The Indian rupee’s USD/INR pair hovered around the mid-88 rupee level, while the Taiwan dollar’s USD/TWD pair rose 0.1%.
Dollar steady with House set to vote on govt reopening The dollar index and dollar index futures rose slightly in Asian trade, with all eyes on the potential end of the longest ever U.S. government shutdown this week.
The U.S. Senate voted to approve a bill unlocking more government spending late-Monday, sending it to the House of Representatives for further approval. The Republican-controlled House indicated it will vote on the measure on Wednesday, then send it to Trump’s desk for approval.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. An end to the shutdown is expected to offer some relief to markets, while also opening the door for official economic data releases from the government, which were delayed by the closure.
Fed Dec rate cut speculation in play Markets were also growing increasingly uncertain over the Federal Reserve’s plans for future interest rate cuts.
A report from the Wall Street Journal’s Nick Timiraos, known in some circles as the “Fed Whisperer,” suggested that policymakers at the central bank were increasingly fractured over whether to cut rates again in December.
Delays in economic data robbed the Fed of insight into the economy and added to this friction, Timiraos said, adding that there was a contingent of hawkish policymakers that opposed a December cut.
Markets are pricing in a 61.9% chance for a 25 basis point cut in the Fed’s December 10-11 meeting, up from 57.8% yesterday, CME Fedwatch showed.
