Australian Dollar In Focus In Asia As Confidence Climbs

Investing.com – The US dollar was practically flat in morning trading in Asia Tuesday, while the Chinese yuan weakened slightly and the Australian dollar climbed on the back of strong business confidence numbers.

Tuesday morning in Asia saw the that tracks the dollar against a basket of currencies up 0.2% to 90.03 at 10:00 pm ET. The Index is down 10.66% over the last year.

The mixed moves in the dollar in Asia on Tuesday morning followed a recovery in global equity markets at the beginning of this week. Shares in Hong Kong and China were sharply higher Tuesday morning while US shares also climbed Monday, continuing to recover from a correction at the beginning of February.

US inflation data is due Wednesday night in Asia and investors are looking for signs of whether the US economy is growing too fast, which could prompt faster interest rate increases and send investors looking for exits once again. The focus in the US this week also falls on the release of President Donald Trump’s Budget and Infrastructure Plan, which may give the dollar a lift.

In China, the dollar was trading lower against the CNY at mid-morning, with down 0.12% to 6.3268 at mid-morning.

The People’s Bank of China set the fix rate for the yuan, the mid-point from which the currency is allowed to trade, at a slightly weaker 6.324 than Monday’s 6.3009.

The USD strengthened against the Japanese yen, with up 0.03% to 108.69 at mid-morning in Asia Tuesday. The for a second term as Bank of Japan Governor suggests a policy to weaken the yen might continue, even as Kuroda’s appointment reassured investors.

The greenback also weakened against the Aussie dollar, with up 0.14% to 0.7873.

The Australian dollar has been climbing recently and received a boost Tuesday morning in Asia from strong business confidence numbers. National Australia Bank’s lender’s business confidence index for January hit its highest point since April 2017, climbing two points to 12. A parallel business conditions index climbed six points to 19, beating long-range averages. An employment index was flat after several months of drops.