The Indonesian rupiah appreciated 1% to around 15,570 against the US dollar on Thursday after trading below 15,700 the day before, as the dollar index extended Wednesday's drop to trade below 106. US Federal Reserve Chair Power signaled a slower pace of tightening, likely in December, citing efforts to balance the risks and the need to fight high inflation. Meantime, Indonesia's central bank Wednesday said it stands ready to further raise interest rates and boost short-term bond yields to support the local currency and manage inflation expectations. Since August, the board has lifted interest rates by 175bps. On fresh data, Indonesia's annual inflation rate was at 5.42% in November, the lowest in three months while staying above the upper limit of the central bank's 2-4% target for the sixth straight month. Elsewhere, factory activity in the country grew for the 15th straight month in November, despite the rate of expansion slowing amid concerns over the global economic outlook.

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Indonesian Rupiah Strengthens as Central Bank to Remain Hawkish

Dollar Index Hits 15-week Low

The offshore yuan held its recent advance to almost 7 per dollar, hovering near its highest levels in over two months as China appeared to have softened its stance on Covid, while the US Federal Reserve signaled a slower pace of tightening ahead. A top official in charge of strict Covid lockdowns in China said the fight against the virus is entering a new phase amid a weakening omicron variant, rising vaccination rate and broader experience in Covid prevention. Beijing also announced that it would allow low-risk patients infected with the virus to isolate at home, marking a shift away from strict quarantine rules amid strong public opposition. These developments have so far overshadowed weak Chinese manufacturing data. Meanwhile, Fed Chair Jerome Powell hinted at a slower pace of US rate increases as soon as December in order to balance risks.

Chinese Yuan Firms up on Covid, Fed Policy Pivots

The Japanese yen appreciated past 137 per dollar, hitting its strongest levels in over three months as Federal Reserve Chair Jerome Powell hinted at a slower pace of US rate increases as soon as December. Bank of Japan board member Asahi Noguchi also said the central bank could “pre-emptively” withdraw monetary stimulus if trend inflation exceeds the 2% for a prolonged period, but warned that it will likely take more time for wages to rise sustainably. BOJ Governor Haruhiko Kuroda has constantly insisted on the need to maintain the bank's massive stimulus until wages rise enough to make up for the rising cost of living. Meanwhile, a BOJ business survey report flagged broadening inflationary pressures across different industries in Japan, including sectors that are normally reluctant to pass on higher costs to customers.

Japanese Yen Hits 3-Month High

The New Zealand dollar appreciated past $0.63, scaling its highest levels in over three months as Federal Reserve Chair Jerome Powell hinted at a slower pace of US rate increases as soon as December. Domestically, the Reserve Bank of New Zealand recently delivered a supersized 75 basis point rate hike to get ahead of inflation and projected rates to peak at 5.5% in September 2023, much higher than a previous forecast of 4.1%. That was the biggest increase since the RBNZ introduced the OCR in 1999 and brought the policy rate to a 14-year high of 4.25%. Stubbornly high inflation and near-record low unemployment in New Zealand supported the case for a more aggressive move, in contrast to other major economies which have started to slow the pace of tightening amid growing risks of a global recession.

NZ Dollar Scales Over 3-Month Highs

The Australian dollar appreciated past $0.68, hitting its highest levels in 11 weeks as Federal Reserve Chair Jerome Powell hinted at a slower pace of US rate increases as soon as December. Domestically, the Reserve Bank of Australia is widely expected to raise its policy rate by another 25 basis points to 3.1% next week, though analysts lowered the implied peak for rates to around 3.6% from as much as 4.31% back in September amid soft inflation data. The monthly CPI indicator in Australia slowed to 6.9% in the ten months to October from 7.3% in September and defied expectations for a slight acceleration to 7.4%. Last month, the RBA delivered a smaller-than-expected 25 basis point rate increase, and has now lifted the cash rate by a total of 275 basis points since May.

Australian Dollar Hits 11-Week High

The Malaysian ringgit strengthened by 0.8% to around 4.40 against the US dollar on Thursday, rising for the second straight day, amid a retreat in the US dollar after Federal Reserve Chair Jerome Powell said that interest rate hikes could be scaled back "as soon as December." Meantime, China's reopening plans provide a boost to Malaysia's trade balance, which is likely to support the local currency. Elsewhere, local media said that investor confidence in the ringgit improved as political risk eased following the appointment of Anwar Ibrahim as the new prime minister last week. The leader said after being sworn in that tackling the cost of living would be his first priority while trying the best way to avoid the waste of all government money.  On recent data, Malaysia's producer prices increased by 4.0% yoy in October, the softest rise since February 2021.

Malaysian Ringgit Extends Gains

The dollar index held below 106 on Thursday after a sharp fall in the previous session, at risk of sliding further to near four-month lows after Federal Reserve Chair Jerome Powell signaled a slower pace of tightening ahead. Powell said that “slowing down at this point is a good way to balance risks,” and that the Fed could moderate the size of rate hikes as soon as December. Market pricing indicated that the Fed funds rate will peak below 5% in May 2023 following Powell’s comments, lower than previous expectations for a peak above 5% in June. Still, Powell warned that controlling inflation “will require holding policy at a restrictive level for some time.” Investors now look ahead to more US data to gauge the health of the world’s largest economy, highlighted by a key monthly jobs report on Friday.

Dollar Languishes on Powell Remarks

AUDUSD increased to a 11-week high of 0.67933

Australian Dollar Hits 11-week High

The dollar index pulled back to session lows of 106.3 in a roller coaster session Wednesday, having risen above 107 earlier, after Fed Chair Powell confirmed smaller rate hikes could start already in December. The greenback turned positive earlier in the session after labour data was not enough to dash concerns about another 75 bps hike in December. Employment increased by 127,000 from October to November, the least since January 2021, and job openings declined to 10.3 million in October, suggesting demand for labor was cooling amid tight financial conditions.

DXY Eases to Session Lows on Prospect of Smaller Rate Hikes

The dollar index bounced back above the 107 mark, a dramatic reversal from its daily lows of around 106.3, as investors reassessed the outlook for monetary policy ahead of remarks from Fed Chair Powell. The abrupt change in sentiment around the greenback came after the release of job openings data. Although the report showed that the number of job openings declined to 10.3 million in October, which, along with the ADP numbers, suggested that demand for labor was cooling, it was not enough to dash concerns about another 75 bps hike in December. Now, all eyes were on Powell's speech on the economic outlook and the labor market at a Brookings Institution event later in the day for clues about the central bank's rate path. The most pronounced buying activity was against the euro and the British pound.

DXY Bounces Back Above 107

The dollar index weakened to 106.5 on Wednesday and is down more than 4.5% in November, on track for the biggest monthly fall since September 2010. Markets have been betting that the US central bank will likely slow the pace of tightening to 50 basis points in December after delivering four straight 75 basis point increases. However, recent hawkish remarks from several Fed policymakers, with Louis Fed President James Bullard and his New York counterpart John Williams warning about a higher terminal level, brought uncertainty around the rate path. Meanwhile, the latest data showed US GDP growth was revised higher to 2.9% in Q3 from initial estimates of 2.6%. At the same time, second estimates showed PCE prices slowed less than earlier expected. Another report showed hiring at US companies retreated in November to the slowest pace in nearly two years and wage gains moderated.

DXY Weakens on Wednesday, Set for 4.5% Monthly Loss

The Indian rupee strengthened to 81.3 per USD in the end of November, the highest in two weeks, as stronger-than-expected growth data gave further leeway for the RBI to continue its rate-hiking cycle with a more aggressive rate hike. The Indian economy expanded by 6.3% in the third quarter, slightly higher than market expectations of 6.2% and extending the country’s growth momentum to eight straight quarters. Markets expect the Reserve Bank of India to raise its key rate by at least 25bps in its decision next week, adding to the 180bps in hikes since the start of the cycle in May. The RBI’s latest bulletin stated that there are signs that inflation is slowing, but global headwinds and uncertainty regarding oil prices could leave price growth stubbornly high. Still, relatively slow tightening by the central bank when compared to its American counterpart and trade imbalances drove the rupee to depreciate 8.5% year-to-date.

Indian Rupee Appreciates Following GDP

The dollar weakened against a basket of six peers on Wednesday, hovering around 106.5 as investors refrained from opening new positions ahead of Federal Reserve Chair Jerome Powell’s speech later today. Markets have been betting that the US central bank will likely slow the pace of tightening to 50 basis points in December after delivering four straight 75 basis point increases. However, recent hawkish remarks from several Fed policymakers, with Louis Fed President James Bullard and his New York counterpart John Williams warning about a higher terminal level, brought uncertainty around the rate path. Investors also look ahead to a raft of US economic reports this week, highlighted by a critical monthly jobs report on Friday. The DXY lost more than 4.5% in November, leaving it on track for the biggest monthly fall since September 2010.

Dollar Subdued, Heads For Worst Month Since September 2010

The euro held onto gains against the dollar on Wednesday, hovering near a five-month peak of around $1.04 as investors continued to assess the outlook for monetary policy. The latest inflation report for the Eurozone showed that annual inflation slowed to 10% in November, while the core CPI stood unchanged at 5%. Despite some early evidence that inflation is slowing among developed economies, it remains still uncomfortable high for policymakers. The ECB remains committed to raising interest rates to tame price growth, while analysts stay divided on whether the central bank will hike borrowing costs by a 75bps for the third time when it meets in December. President Lagarde recently told the European Parliament that Eurozone inflation has not peaked and risks are rising higher than expected.

Euro Holds Gains

USDHKD decreased to a 40-week low of 7.8003

Hong Kong Dollar Hits 40-week High

The Indonesian rupiah was changing hands around 15,740 against the US dollar on Wednesday, extending falls for the third month running, after President Joko Widodo said exports from the country may shrink next year due to global headwinds, including uncertainty from China's COVID zero policy. Official data showed Indonesia's shipments grew 12.3% yoy in October, after a 20.3% rise in the prior month. The leader also warned of risks from food and energy supply issues amid ongoing rainy season and ahead of the year-end holiday. Elsewhere, BI said inflation expectations are still high, but the availability of energy subsidies in 2023 would let the board moderate its tightening path. The central bank has lifted interest rates by a total of 175bps since August, while also raising banks' RRR.  Meanwhile, the dollar index stayed solid, as US Fed officials continued their hawkish comments on interest rates despite hopes that the central bank might slow its pace of rate hikes in December.

Indonesian Rupiah Stays Weak

The offshore yuan held its recent advance to around 7.15 per dollar, as reopening hopes overshadowed negative sentiment from weak economic data. Chinese health officials announced on Tuesday that they would bolster vaccination among senior citizens in a move seen by experts as key for economic reopening, as widespread protests put pressure on the government to dial back strict Covid restrictions. The yuan was also helped after the country’s securities regulator lifted a ban on equity refinancing for listed property firms, in the latest move to support China’s ailing property sector. Meanwhile, latest data showed that Chinese manufacturing and services activities in November declined at the steepest pace since April as surging Covid cases and tighter curbs weighed on the economy.

Chinese Yuan Holds Advance on Reopening Bets

The Japanese yen steadied around 138.5 per dollar, firming up against a faltering greenback as investors awaited more clues on the likely direction of US monetary policy. The yen was also underpinned by a Bank of Japan business survey report which flagged broadening inflationary pressures across different industries in Japan, including sectors that are normally reluctant to pass on higher costs to customers. Moreover, the currency remains supported by growing expectations that the central bank will have to tweak monetary policy, with BOJ Governor Haruhiko Kuroda saying recently that a tightening labor market will help lift wages ahead. Kuroda has constantly insisted on the need to maintain the bank's massive stimulus until wages rise enough to make up for the rising cost of living.

Japanese Yen Firms Up as Dollar Falters

The Australian dollar stabilized around $0.67, holding its ground even after data showed that the monthly CPI indicator in Australia slowed to 6.9% in the ten months to October from 7.3% in September and defied expectations for a slight acceleration to 7.4%. Meanwhile, investors remain cautious about any hawkish surprises from US Federal Reserve Chair Jerome Powell’s speech later this week. Domestically, Reserve Bank of Australia Governor Philip Lowe recently signaled a flexible approach to monetary policy, stating that incoming data will influence future policy moves. Earlier this month, the RBA delivered a smaller-than-expected 25 basis point rate increase, and has now lifted the cash rate by a total of 275 basis points since May. Markets are betting that the central bank would raise its policy rate by another 25 basis points to 3.1% in December, but lowered the implied peak for rates to around 3.6% from 3.7% before the CPI release.

Aussie Holds Up Despite Easing Inflation

The dollar index held above 106.5 on Wednesday, consolidating recent gains as investors geared up for Federal Reserve Chair Jerome Powell’s remarks later today that could offer fresh clues on future rate hikes. The greenback rose more than 1% in the prior three sessions as Fed officials signaled that interest rates could peak higher than previously anticipated as inflation remains stubbornly high. St. Louis Fed President James Bullard said the policy rate needs to rise to at least 5%, while New York Fed President John Williams said that rates need to rise further and stay high through next year. Still, the Fed is widely expected to slow the pace of tightening to 50 basis points in December after delivering four straight 75 basis point increases. Investors also look ahead to a raft of US economic reports this week, highlighted by a key monthly jobs report on Friday.

Dollar Steadies Ahead of Powell Remarks

The Swiss franc weakened to 0.95 per USD from the near three-month high of 0.94 hit on November 23rd as investors continued to assess economic data for hints on the tightening outlook for the Swiss National Bank. The Swiss economy expanded by 0.2% in the third quarter from the downwardly revised 0.1% in the second quarter, missing market expectations of a 0.3% growth and raising doubts on whether the SNB will remain with its hawkish outlook. Chairman Jordan previously stated there is a high probability that the central bank will further tighten policy in the bank’s next decision, as current interest rates are low given the elevated inflation expectations. Pledges of tighter policy came despite the recent slowdown in price growth as annual inflation was at 3% in October, well below central bank expectations of 3.4% and August's 29-year peak of 3.5%. The SNB raised its policy rate by 75bps in its last meeting, lifting borrowing costs to positive territory for the first time since 2011.

Swiss Franc Depreciates from 3-Month High

The Canadian dollar weakened further towards the $1.36 mark, a level not seen since early November, as investors continued to assess the growth and monetary policy outlook. The latest data showed that the Canadian economy grew an annualized 2.9% in the third quarter of 2022, beating expectations for a modest 1.5%, but still the weakest reading since the second quarter of 2021. On the monetary policy side, the Bank of Canada surprised markets in October by slowing the pace of interest-rate hikes as the economy showed signs of a sharp slowdown. Money markets now expect the central bank to raise interest rates by 25 basis points in December.

Canadian Dollar Remains Under Pressure

The Euro traded around $1.04, close to levels not seen in near five months and is on track to end the November month near 5% higher, benefitting from a weaker dollar and falling US Treasury yields, as investors continue to bet the Fed will deliver a smaller 50bps rate increase next month, despite hawkish remarks from several officials. In Europe, the ECB remains committed to raise interest rates to dampen high inflation, and doubts persist whether the central bank will raise key borrowing costs by a 75bps for a third time when it meets next month while the peak rate is generally seen by investors around 3%. President Lagarde recently told the European Parliament that Euro zone inflation has not peaked and it risks turning out even higher than currently expected. Inflation rate in Germany slowed to 10% in November from 10.4% in October but remained close to high levels not seen since the reunification. In Spain, fresh figures also pointed to a 4th month of slowing price pressures.

Euro at $1.04, on Track for Big Monthly Gain

The South African rand appreciated to below the 17 mark against the USD, the highest since August 29th, amid a softer dollar as risk sentiment slightly improved on hopes of a faster easing of Covid-19 curbs in China. Meanwhile, investors continued to assess the trajectory of Federal Reserve interest rate hikes. Locally, the South African Reserve Bank raised the key repo rate by an expected 75 bps at its November meeting, driven by the Bank’s assessment that risks to the inflationary outlook remain skewed to the upside while the risks to the medium-term domestic growth outlook are assessed to the downside. The South African Reserve Bank reiterated that it needs to see consumer inflation steadily decline to the 4.5% mid-point of its targeted range before it will consider pausing or stopping its current rate hiking cycle.

South African Rand Strengthens to 3-Month High

The British pound hovered at $1.2 and is on track to end the November month almost 5% higher, as the dollar rally paused, with investors assessing the monetary policy outlook and hawkish remarks from Federal Reserve officials. Investors are currently betting on a smaller 50bps rate hike by the Fed next meeting. In the UK, the Bank of England will start selling bonds bought during the turmoil period of Liz Truss government from November 29th, after Chancellor Jeremy Hunt restored UK fiscal credibility by outlining in the Autumn Budget Statement a £55 billion package of tax rises and spending cuts. The next BoE monetary policy decision is due on December 15th and most investors expect a 50bps rate hike although some see a 75bps increase as likely.

Pound Hovers at $1.2

The Euro traded around $1.04, close to levels not seen in near five months and is on track to end the November month near 5% higher, benefitting from a weaker dollar and falling US Treasury yields, as investors continue to bet the Fed will deliver a smaller 50bps rate increase next month, despite hawkish remarks from several officials. In Europe,  the ECB remains committed to raise interest rates to dampen high inflation, and doubts persist whether the central bank will raise key borrowing costs by a 75bps for a third time when it meets next month while the peak rate is generally seen by investors around 3%. President Lagarde recently told the European Parliament that Euro zone inflation has not peaked and it risks turning out even higher than currently expected while many hawk policymakers have been advocating that room for slowing down interest rate increases is limited.

Euro on Track to Gain 5% in November

USDMXN decreased to a 32-month low of 19.232

Mexican Peso Hits 32-month High

The offshore yuan jumped more than 1% past 7.20 per dollar on Tuesday, rebounding sharply from recent lows as China said it would ramp up vaccination among its senior citizens in a move that health experts consider as key to reopening. The country faced growing pressure to dial back its strict Covid restrictions as protests in major cities erupted over the weekend. The yuan was also helped by reports that China’s securities regulator lifted a ban on equity refinancing for listed property firms, in the latest move to support its ailing property sector. On the monetary policy front, the People’s Bank of China cut the reserve requirement ratio by 25 basis points late last week, while leaving its benchmark lending rates unchanged for the third straight month earlier in November.

Chinese Yuan Jumps on Reopening Hopes

The Japanese yen steadied around 138.5 per dollar, holding its ground against a faltering dollar as investors continued to assess the likely direction of US monetary policy, while the market turmoil triggered by widespread Covid protests in China started to ease. The yen also remains supported by growing expectations that the Bank of Japan will have to tweak monetary policy, with Governor Haruhiko Kuroda saying recently that a tightening labor market will help lift wages ahead. Kuroda has constantly insisted on the need to maintain the bank's massive stimulus until wages rise enough to make up for the rising cost of living. Annual core consumer prices in Japan surged to a 40-year high of 3.6% in October as high global commodity prices and a weak yen pushed up import costs.

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08:04 · Dec 1

Currency

Indonesian Rupiah Strengthens as Central Bank to Remain Hawkish

07:20 · Dec 1

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Dollar Index Hits 15-week Low

07:19 · Dec 1

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07:00 · Dec 1

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Japanese Yen Hits 3-Month High

06:16 · Dec 1

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NZ Dollar Scales Over 3-Month Highs

06:14 · Dec 1

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04:38 · Dec 1

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04:18 · Dec 1

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20:10 · Nov 30

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Australian Dollar Hits 11-week High

18:40 · Nov 30

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DXY Eases to Session Lows on Prospect of Smaller Rate Hikes

16:06 · Nov 30

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DXY Bounces Back Above 107

13:43 · Nov 30

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DXY Weakens on Wednesday, Set for 4.5% Monthly Loss

12:42 · Nov 30

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Indian Rupee Appreciates Following GDP

10:36 · Nov 30

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10:11 · Nov 30

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09:11 · Nov 30

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Hong Kong Dollar Hits 40-week High

07:51 · Nov 30

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Indonesian Rupiah Stays Weak

07:12 · Nov 30

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Chinese Yuan Holds Advance on Reopening Bets

06:49 · Nov 30

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Japanese Yen Firms Up as Dollar Falters

06:14 · Nov 30

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Aussie Holds Up Despite Easing Inflation

03:53 · Nov 30

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Dollar Steadies Ahead of Powell Remarks

14:23 · Nov 29

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Swiss Franc Depreciates from 3-Month High

13:52 · Nov 29

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Canadian Dollar Remains Under Pressure

13:04 · Nov 29

Currency

Euro at $1.04, on Track for Big Monthly Gain

12:02 · Nov 29

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South African Rand Strengthens to 3-Month High

11:14 · Nov 29

Currency

Pound Hovers at $1.2