Investing.com – Most Asian currencies were little changed on Friday ahead of key U.S. jobs data due later in the day, although rising expectations for interest rate cuts sent the dollar lower for the week.
Sentiment towards risk assets has improved this week following interest rate cuts from and to .
But mixed economic signals from some of Asia’s major economies have curbed capital flows into regional markets, as has expectations of new signals on U.S. interest rates.
Chinese yuan unchanged after mixed trade data
The Chinese yuan pair was little changed on Friday, remaining near a six-month high following average trade data from the country.
China’s economy grew faster than expected in May, helped by strong industrial output and overseas demand. This led to the country also recording a larger-than-expected surplus.
However, China’s economic growth rate was much slower than expected, indicating that local demand remained sluggish as the broader economy struggled with an uneven economic recovery.
Sentiment toward China has worsened in recent weeks amid growing doubts about the country’s economic recovery and additional stimulus measures from Beijing.
Dollar slows weekly decline, nonfarm payrolls expected to rise
And both steadied in Asian trading on Friday and are expected to lose about 0.5% each this week.
The US dollar was hit by a series of weak economic indicators, particularly in the labor sector, which have fueled expectations that the Federal Reserve will have growing confidence in cutting interest rates this year.
It was observed that traders increased their bets sharply by .
The weak labor data also came ahead of data due later Friday that should provide clearer signals about the labor market and interest rates.
The Fed is also set to meet next week and is expected to keep rates steady.
Indian rupee tests record low, RBI expected
The Indian rupee pair remained little changed on Friday, remaining close to record highs as the Reserve Bank of India meets later in the day.
The RBI is expected to maintain its stability while its signals on inflation and the economy will be in focus.
The rupee weakened significantly this week after the 2024 general election results showed the ruling BJP-led alliance winning a much smaller majority than expected.
Asian currencies generally moved in a narrow range. The Japanese yen pair is hovering around 156 yen, with the main focus being .
The Australian dollar rose 0.1% and the South Korean won rose 0.3%.
The Singapore dollar pair remained virtually unchanged.