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Asian currencies subdued on caution ahead of US inflation data

March 13, 2018 6:13 AM
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China's yuan rises after a slightly stronger midpoint fixing by the central bank. — Reuters picSINGAPORE, March 13 — Most Asian currencies traded in a tight range ahead of crucial inflation data from the United States due later in the day.

Inflation has been a focal point for the Federal Reserve's monetary policy, and could speed up the tempo of interest rate hikes this year.

“Today's movement is relatively small but steady because there is US inflation data due this evening... if the consumer price index (CPI) comes in the middle of or below market expectations, you'll see a rise in risk appetite, but if the CPI comes in higher, I think it will dent market sentiment,” said Gao Qi, Asia FX strategist at Scotiabank.

The South Korean won fell about 0.06 per cent, stepping away from two straight sessions of gains. The currency had spiked over the past few days on the prospect of easing tensions in the Korean Peninsula, a factor which weighed heavily on the won in 2017.

The Chinese yuan rose after a slightly stronger midpoint fixing by the central bank. The yuan was one of the best-performing regional currencies last year, but has been wrangling with high corporate dollar demand as well as slowing economic growth of late.

The Malaysian ringgit fell slightly against the US dollar after news that Malaysia's industrial output declined in January as manufacturing sector growth slowed.

The Thai baht and the Indian rupee led gains, rising more than 0.1 per cent each.

Indian inflation eased for a second straight month in February but remained above the the Reserve Bank of India's 4 per cent medium-term target.


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