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After weeks of speculation over the US monetary policy path, Asian currencies have begun to consolidate against the dollar as expectations of further Fed rate hikes diminish. According to a Wall Street Journal report, Asian currencies steadied in early trade and may find support from reduced rate-hike prospects.
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Sign InThe move is accompanied by encouraging regional data. China held its one-year and five-year loan prime rates steady at 3% and 3.5% respectively on June 22, per market data. Japan's services PMI rose to 51.8 on June 23, beating forecasts, boosting confidence in the regional economy.
Traders are now watching Fed officials' speeches and upcoming US inflation data for the next catalyst. With rate-hike bets fading, Asian currencies could see further support, but any surprise in jobs or inflation figures may alter the current trajectory.