Asia FX gains weak dollar ahead of Trump inauguration, BoJ rate decision continues Investing.com

Investing.com– Most Asian stocks rose on Monday as the dollar weakened ahead of US President-elect Donald Trump’s inauguration, while China’s central bank kept lending rates unchanged. to support the yuan.

Local currencies saw limited gains as markets were cautious ahead of Trump’s inauguration on the prospect of additional trade tariffs on Chinese exports. This could trigger a trade war and affect most Asian economies because of their trade-dependent economies.

It was down 0.3% in Asian trading, breaking from a 26-month low reached last week. The greenback has remained at a two-year low after the Federal Reserve turned hawkish last month.

also decreased by 0.3%.

China’s yuan was largely muted as the PBOC kept key lending rates on hold

Overseas Chinese yuan rose 0.1%, while other foreign currencies gained 0.2%.

China’s yuan traded narrowly on Monday, showing little reaction to the People’s Bank of China’s decision to keep its lending rates steady.

The PBOC kept its annual rate unchanged at 3.1% and kept , which is used to set lending rates, at 3.60%.

The move, intended to support the weakening yuan, save money, and support economic growth, did little to sway market sentiment for the currency.

Interest rate decisions were awaited in Japan, Malaysia

The Japanese yen fell 0.3% as markets traded on interest rates due later this week.

The BOJ is expected to raise interest rates next week, provided there are no market disruptions after Trump’s inauguration. The central bank is likely to repeat its pledge to raise rates as the economy continues to recover, Reuters reported on Friday citing sources familiar with the matter.

The Malaysian ringgit fell 0.1% ahead of the . BNM is expected to hold rates steady at 3.00% for the 10th consecutive meeting on Wednesday due to strong economic growth and controlling inflation, a Reuters poll showed.

Elsewhere, the Australian dollar was 0.2% higher, while the Singapore dollar was down 0.3%.

The Thai baht was little changed, while the Indian rupee fell by 0.1%.

South Korea’s Won pair fell 0.4% amid ongoing political turmoil in the country.