On Monday, most Asian currencies fell as concerns about inflation and weak economic data weighed on investor sentiment. The dollar strengthened as a result of a rally in oil markets, following a surprise OPEC+ production cut. This move led to fears that inflation could remain high due to increased fuel prices. Additionally, a range of disappointing economic data from China suggested that the post-COVID rebound in the country might be losing momentum.
Asian currencies decline as dollar firms
The strengthening of the dollar resulted in a decline in most Asian currencies. The rally in oil markets following the surprise OPEC+ production cut raised concerns that high fuel prices could lead to higher inflation. This, in turn, led investors to move towards the dollar as a safer investment.
Weak economic data weighs on investor sentiment
The weak economic data from China contributed to the decline in Asian currencies. A private survey indicated that the country’s manufacturing sector had barely expanded in March, with output and demand weakening. This suggested that the post-COVID rebound in China might be losing momentum. Furthermore, a range of other weak economic data from the region, including South Korea’s exports and Japan’s factory output, weighed on investor sentiment.
Chinese yuan loses value
The Chinese yuan lost 0.3% in value on Monday as concerns about the country’s economic recovery grew. The private survey indicating a slowdown in the manufacturing sector was the main driver behind this decline. Furthermore, a range of other data from China, including weak consumer spending and rising debt levels, added to concerns about the country’s post-COVID recovery.
In conclusion, the decline in most Asian currencies on Monday was due to a combination of factors, including concerns about inflation, weak economic data, and a strengthening dollar. The post-COVID recovery in China, which had been a key driver of growth in the region, appeared to be losing momentum. These developments raised concerns about the region’s economic outlook and contributed to the decline in Asian currencies