The U.S. dollar fluctuated on Thursday. What about the yen?
The U.S. dollar surged forward after trading in the red on Thursday. New data showed that in the first quarter of 2023, the U.S. economy grew slower than analysts expected. However, it likely won’t sway the Fed from hiking interest rates at its meeting next week. High rates might contribute to economic downfall, and usually, when the growth slows, economists advise maintaining rates low. But as the high inflation persists in plaguing the country, the central bank maintains its aggressive policy.
The greenback gained broadly as investors expected another hike. It soared versus the Japanese yen, exchanging hands higher by 0.2% at 133.985 yen. Moreover, the U.S. dollar index rallied by 0.3% on Thursday. It last stood at 101.67.
In Asia, Indonesia’s rupiah led the gains. It jumped higher earlier in the session before the dollar strengthened. The emerging market stocks also climbed up today. The rupiah increased by as much as 1%. It is the best-performing currency thus far in 2023.
BofA Global Research analysts noted that portfolio flows would likely continue supporting IDR. That would offset risk in terms of dovish policy bias and trade moderation.
What about the Thai baht and the Indian rupee?
The Thai baht soared by 0.2% on Thursday. The trade data showed that in Thailand, exports shrunk less than analysts forecasted last month. Agriculture exports increased, in fact, especially rice and sugar, supporting the economy. MUFG analysts noted that the baht’s current strength is due to this news.
At the same time, the Singaporean dollar added 0.1%. The Indian rupee edged up by the same amount during this session. While the market sentiment was mostly positive, traders remained uncertain about the Fed’s policy. They are trying to determine how much longer the U.S. central bank continues its aggressive tightening. According to the polls, there’s an 80% chance that the agency will deliver a 25-basis point hike at its next meeting.
On Thursday, shares in Jakarta jumped by 0.6%, while stocks in Manila added 0.8%. On the other hand, Singapore shares hit a more than three-week low, plummeting by 0.7%. Property companies suffered the most losses. The authorities raised taxes on private property purchases in the country. This news surprised markets, causing the stocks’ decline.
MUFG noted that investors would have to wait and see whether this policy has a serious impact on raising housing prices in Singapore.
South Korean won declined by 0.1% today. It has already shaved off 5.7% during this year. But the Chinese yuan soared.