Asia FX muted with more Fed indications on tap; Aussie rises ahead of RBA By Investing.com

Investing.com– Most Asian currencies moved in a tight range on Monday as the dollar settled from recent losses as traders awaited a slew of other U.S. Federal Reserve and inflation cues.

The Australian dollar was among the top performers, advancing ahead of a Reserve Bank of Australia meeting where the central bank is likely to strike a chord.

Regional trading volumes were reduced due to the holiday in the Japanese market. But the yen weakened, retreating further from a nine-month peak hit last week. The yen pair was up 0.3% at 144.32 yen.

But with the exception of the yen, most Asian currencies have made gains since last week after a 50 basis point interest rate cut by the Fed.

Aussie gains with RBA on tap

The Australian dollar rose 0.3% in anticipation of the RBA’s cues on Tuesday.

The central bank is expected to . But sticky inflation and recent strength in the labor market are expected to draw a dovish stance from the RBA.

The central bank is also expected to signal that rates will remain high for longer – a scenario that bodes well for the Aussie dollar. The currency was trading near its 10-month high.

Dollar muted with Fed, inflation cues on tap

And both rose slightly in Asian trade, settling after last week’s losses.

The Fed cut interest rates and marked the start of an easing cycle that could see rates fall by as much as 125 bps this year. But the dollar’s overall losses were still limited as the Fed signaled that neutral rates would also be much higher than seen in the past.

More cues from the central bank are coming this week, with plenty of Fed officials – mostly – set to speak in the coming days.

The data – the Fed’s favorite gauge of inflation – is also out on Friday, offering more clues about the Fed’s plans to cut rates.

Broader Asian currencies moved in a flat to lower range. The Chinese yuan pair fell slightly after the People’s Bank of China cut its repo rate to 14 days to further ease monetary conditions and support economic growth.

The South Korean won pair rose 0.3 percent, while the Singapore dollar pair gained 0.2 percent.

The Indian rupee rose 0.1% but remained well below recent record highs.