Investing.com -- Most Asian currencies moved in a tight range on Friday, while the dollar steadied after a strong week as markets awaited more economic signals from key U.S. payrolls data due later in the day.
The dollar was headed for a third straight positive week, tracking a bounce in Treasury yields as investors braced for a potentially strong reading on the jobs market.
Traders also remained largely risk-averse after Fitch cut the U.S. sovereign rating earlier in the week. This pressured most Asian units, while spurring flows into the dollar.
The Australian dollar was among the few outliers for the day, rebounding 0.3% from steep losses earlier in the week.
Nonfarm payrolls awaited for more Fed cues
Markets were focused squarely on nonfarm payrolls data for July, due later on Friday. While analysts expect payrolls to have eased slightly after a substantial drop in June, private payrolls data released earlier in the week heralded a potentially stronger-than-expected official reading.
Strength in the job market gives the Federal Reserve more headroom to keep raising interest rates, especially given that the central bank is also targeting some cooling in the labor market to help curb inflation.
Higher interest rates bode poorly for Asian markets, as the gap between risky and low-risk yields narrows.
Chinese yuan inches higher amid more stimulus promises
The Chinese yuan rose 0.1% on Friday, following a stronger-than-expected daily midpoint fix from the People’s Bank.
The currency was also somewhat supported by top government officials promising more measures to boost local consumption and economic activity in the coming months.
But officials once again offered no concrete details on the planned stimulus measures, souring investor optimism over a potential economic recovery in the country.
China’s central bank also said that it will use its liquidity measures flexibly in order to support an economic recovery in the country. But any measures to further loosen Chinese monetary policy are likely to weigh on the yuan.
Add Chart to Comment
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.