Asian currencies rise as U.S. dollar weakens
Asian currencies gained ground Monday as the U.S. dollar weakened. Traders reacted to the risk of a U.S. federal government shutdown and August industrial profit data from China, which provided additional support for regional currencies.
The Korean won posted the strongest performance, rising about 0.7%. The Japanese yen strengthened, with the dollar falling roughly about 0.4% against it. The Australian dollar edged up slightly ahead of Tuesday's Reserve Bank meeting. The New Zealand dollar also rose.
India's rupee traded near 88.73 per dollar with minimal movement. Traders reported that state-owned banks sold US currency periodically, keeping the currency stable. Indian stock markets opened higher, ending a six-session losing streak.
India's rupee traded near 88.73 per dollar with minimal movement. Traders reported that state-owned banks sold US currency periodically, keeping the currency stable. Indian stock markets opened higher, ending a six-session losing streak.
Traders are now waiting for several U.S. releases: the Job Openings report, private payroll data, and the ISM manufacturing survey. The market is also monitoring the situation surrounding the sale of TikTok and financing bills.
Congress faces a Tuesday deadline to pass a funding bill before the fiscal year ends. Without an agreement, the government would shut down starting Wednesday. A shutdown would likely delay the September nonfarm payrolls report, which the Federal Reserve relies on for its policy decisions ahead of the late-October meeting.
At the same time China's National Bureau of Statistics reported that industrial profits jumped 20.4% in August compared to the same month last year. The cumulative profit figure for January through August turned positive at 0.9%, reversing the decline recorded through July.
The improvement followed government efforts to limit price competition among manufacturers and came as producer-price deflation pressures showed signs of easing. Nevertheless, August manufacturing data from China showed continued contraction, and external demand remained weak.
Nevertheless, the recovery in profits was sufficient to improve sentiment in Asian markets, although the Chinese government recently banned technology companies from purchasing Nvidia chips, which could have a negative impact on the development of artificial intelligence.
At the same time China's National Bureau of Statistics reported that industrial profits jumped 20.4% in August compared to the same month last year. The cumulative profit figure for January through August turned positive at 0.9%, reversing the decline recorded through July.
The improvement followed government efforts to limit price competition among manufacturers and came as producer-price deflation pressures showed signs of easing. Nevertheless, August manufacturing data from China showed continued contraction, and external demand remained weak.
Nevertheless, the recovery in profits was sufficient to improve sentiment in Asian markets, although the Chinese government recently banned technology companies from purchasing Nvidia chips, which could have a negative impact on the development of artificial intelligence.
