Investing.com – Most Asian currencies fell on Monday as the dollar recovered following the release of the nonfarm payrolls report, prompting concerns about high and longer interest rates to return to markets.
The dollar also benefited from the currency’s decline, which hit a one-month low amid political uncertainty after European Union election results showed a massive shift toward right-wing parties.
French President Emmanuel Macron has called for early legislative elections at the end of June after his party was defeated in the EU vote by Marine Le Pen’s far-right party.
Regional trading volumes were restricted due to holidays in China, Hong Kong and Australia.
Dollar sturdy after Fed meeting, CPI data available
Asian trades and strengthened on Monday, continuing Friday’s sturdy gains following a sturdy report.
The reading caused investors to sharply reduce expectations for .
The jobs data came just days ahead of this week, when the central bank is widely expected to leave interest rates unchanged. However, any signals regarding future interest rate decisions will be closely watched.
This week we will also learn key inflation data, which will be published on Wednesday. The reading is expected to show inflation remaining well above the Fed’s annual target of 2%.
Uncertainty about the Fed meeting and interest rates weakened most Asian currencies.
Japanese yen weakens despite GDP improvement
The Japanese yen weakened on Monday, with the pair rising 0.3% to re-enter the 157 level.
The weakening yen came even as data showed Japan’s economy contracted slightly less than expected in the first quarter.
However, the economy was still in a clear downward trend.
The GDP data came just before the end of this week, when the central bank is expected to begin tightening policy by limiting asset purchases.
However, it is unclear how much the BOJ can tighten policy given that the economy remains delicate.
Other Asian currencies weakened. The South Korean won pair was unchanged while the Singapore dollar pair rose 0.2%.
The Indian rupee pair was holding steady around the 83 level, but was still within sight of a record high after falling sharply last week.
The Australian dollar pair rose 0.1% over the holiday period, while the Chinese yuan pair rose 0.1%.
