Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Asia FX hit by China COVID unrest, dollar rises on safe haven flows

Forex Nov 27, 2022 23:48
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
USD/CNY
+0.07%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
-0.03%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
+0.05%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
-0.41%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AUD/USD
-0.41%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/THB
+0.55%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ambar Warrick

Investing.com-- Most Asian currencies fell on Monday as worsening civil unrest in China over its strict anti-COVID policy rattled sentiment, while the dollar rose as fears of a Chinese economic slowdown drummed up safe haven demand.

China’s yuan fell 0.4% to 7.1997 against the dollar and traded at an over two-week low, while the offshore yuan fell 0.2%. While both currencies trimmed initial losses, their outlook remained bleak.

Chinese protestors clashed with the police in several major cities over the weekend, amid growing public discontent over the government’s strict anti-COVID measures. A deadly fire in Ürümqi, which was linked to the lockdown measures, triggered a wave of protests in the country.

The unrest could now potentially further hamper Chinese economic growth, which is already reeling from the country’s strict anti-COVID measures this year. China is also grappling with a record-high increase in daily COVID-19 cases.

Currencies of countries with a high trade exposure to China fared poorly. The Taiwan dollar and South Korean won fell 0.2% each.

The Australian dollar slumped 0.9%, also coming under pressure from weaker-than-expected retail sales data.

The U.S. dollar index and dollar futures rose 0.4% each to over 106, recovering from recent losses amid increased safe haven demand for the greenback. Global commodity markets tumbled on Monday amid fears of worsening demand in China.

But gains in the dollar were held back by growing expectations that the Federal Reserve will hike interest rates by a smaller margin in the coming months. Such a scenario is positive for Asian currencies, and spurred strong gains over the past two weeks.

However, markets remain uncertain over where U.S. interest rates will peak, given that inflation is still well above the Fed’s target. This sentiment may limit gains in Asian currencies in the near-term.

Among other Asian currencies, the Japanese yen rose 0.4% on Monday, benefiting from a mix of safe-haven demand and bargain buying.

Recent weakness in the Japanese economy drove some expectations that the Bank of Japan will be pushed into tightening its ultra-loose monetary policy.

Losses in the Indian rupee were muted by a drop in oil prices, given that India imports a bulk of its crude requirements.

In Southeast Asia, the Thai baht fell 0.3% after data showed the country’s exports and imports shrank unexpectedly in October. But the country’s trade deficit also narrowed significantly.

Asia FX hit by China COVID unrest, dollar rises on safe haven flows
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email