Investing.com– Asian currencies traded flat to slightly higher on Monday, while the dollar held steady after a weekly loss, as investors assessed stronger-than-expected Chinese economic growth figures.
The US Dollar Index was steady at 101.82 by 00:10 ET (04:10 GMT), after a 0.4% weekly fall that ended a four-week winning streak.
China Q3 GDP beats forecasts; yuan hits highest since July 2022
The Chinese yuan strengthened to its firmest level since July 2022, with the onshore USD/CNY pair falling 0.1% to 6.6816 yuan. The offshore pair USD/CNH also edged lower to four-year lows.
China’s gross domestic product (GDP) expanded 4.5% year-on-year in the July-September quarter, beating the 4.4% forecast and accelerating from 4.3% in the previous quarter.
Separately, China’s industrial output rose 5.5% in September, while retail sales increased 1.1%, exceeding expectations and suggesting some improvement in domestic demand.
However, persistent weakness in the property sector and declining investment could limit the yuan’s gains. Property investment fell 20.6% in the first nine months of the year, while fixed-asset investment declined 7.2%, highlighting the uneven nature of China’s recovery.
Elsewhere, the Australian dollar’s AUD/USD pair rose 0.4%, leading gains in Asian trading.
The South Korean won also strengthened, with the USD/KRW pair falling 0.2%.
Japanese yen flat amid intervention fears
The Japanese yen’s USD/JPY was little changed at around 158 yen, with the currency supported by caution over potential intervention as the exchange rate remained near levels that have previously prompted official warnings.
Bank of Japan Governor Kazuo Ueda said underlying inflation was approaching the central bank’s 2% target, keeping attention on the outlook for monetary policy.
India’s rupee was also in focus after posting its strongest weekly performance in nearly four years, supported by measures from the Reserve Bank of India to curb dollar demand and direct intervention in the foreign exchange market.
The rupee’s USD/INR pair edged up 0.1% to 95.089 after closing at 94.96 per dollar on Friday.
The central bank’s support could help limit near-term losses, although elevated oil prices and foreign capital outflows remain risks for the currency.
The Singapore dollar’s USD/SGD pair traded largely unchanged.
Broader market sentiment remained cautious as investors assessed the financing requirements of artificial intelligence infrastructure and awaited major corporate earnings.
A decline in oil prices following U.S. moves involving Russian sanctions helped support a rally in government bonds, with the benchmark 10-year U.S. Treasury yield falling to 5.0525%.
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