Despite the People’s Bank of China setting a stronger midpoint, the Chinese yuan remained stagnant due to pessimism triggered by a private PMI survey. The survey underscored a contraction in China’s manufacturing sector in October, contributing to the yuan’s flat performance.
Other currencies linked to China’s economy, such as the Australian dollar and South Korean won, experienced minor declines. The South Korean won was particularly affected by disappointing export and import data for October.
In contrast, the Indian rupee saw a slight uptick, buoyed by falling oil prices. Meanwhile, the Japanese yen recovered modestly from a one-year low after Japan’s leading financial officials issued warnings against speculation following minimal policy changes by the Bank of Japan.
Speculation around potential government intervention was fueled by the yen nearing a threshold that previously resulted in a $60 billion government action. Uncertainty surrounding the Federal Reserve meeting and an expanding gap between U.S. and Japanese yields added pressure on the yen.
Simultaneously, both the dollar index and dollar index futures saw modest growth in Asian trade.
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