By Ambar Warrick
Investing.com– China’s yuan led losses across Asian currencies on Tuesday amid growing concerns over Beijing’s political climate, while broader Asian currencies moved little as the dollar steadied from recent losses.
The currency fell 0.6% to 7.3084, its lowest level against the dollar since late 2007. The currency extended its losses from Monday after the People’s Bank of China fixed a softer-than-expected daily midpoint for the currency.
After President Xi Jinping secured a, on Sunday, he unveiled a cabinet largely composed of loyalists. This led to losses in the yuan.
The President reiterated his commitment not to change the strategy of zero-COVID and raised concerns about Xi’s ability to impose disruptive policies on the people.
Chinese stocks were also heavily liquidated, while the slumped on Tuesday to a record 7.3735.
The dollar stabilized slightly in broad Asian currencies despite growing expectations of weakening economic growth pushing the Federal Reserve to soften its hawkish stance.
The central bank is still widely expected by traders to raise interest rates in November, but they have now lowered their expectations that it would do so in December.
Focus is now on U.S. third-quarter this week, which is expected to reflect the impact of rising interest rates on the world’s largest economy.
The trades were sideways on Tuesday. Both indicators appeared to have ended a 3-day losing streak.
The hovered near record lows while the recovered slightly after a 32-year low. There were reports that the government intervened in currency market markets for a second year.
The trend was reversed by the won, which jumped 0.8% as traders prepared for greater currency market intervention from the government. The won was trading close to 13-year highs.
The inflation rate fell 0.1% in September, even though data showed that it rose more than anticipated. The Monetary Authority of Singapore increased its annual inflation forecast. This likely indicates that the central banking will continue tightening monetary policies in the near future.