But traders still remained wary of risk-driven Asian markets, with key U.S. labor data, due this week, set to offer more cues on interest rates.
This kept most regional currencies in a tight range. The Japanese yen’s USDJPY pair rose 0.2% after falling sharply from 157 yen on Monday.
The Chinese yuan’s USDCNY pair rose 0.1%, staying close to recent six-month highs as sentiment towards China remained weak.
The Indian rupee’s USDINR pair rose 0.4% on Tuesday, reversing course after the currency firmed sharply in the prior session.
Early vote counting in the closely-watched 2024 general elections indicated that the BJP-led NDA alliance was set for a much less sweeping victory than what exit polls had signaled.
While a win still presents a rare third term for Prime Minister Narendra Modi, a slimmer victory will herald more difficulty for Modi in doling out economic reforms.
The Australian dollar’s AUDUSD pair fell 0.1% after a swathe of weak economic readings set the stage for an underwhelming gross domestic product print on Wednesday.
Australia fell into a current account deficit in the first quarter, while net exports contribution to GDP also shrank 0.9% in the quarter.
Both readings indicated that GDP data due on Wednesday could potentially underwhelm. GDP is expected to have grown 1.2% year-on-year, slowing from the 1.5% growth seen in the prior quarter.
The dollar index and dollar index futures both fell 0.1% in Asian trade, extending steep overnight losses. Both indexes were also at their weakest levels since early-April.
The greenback sank on Monday after purchasing managers index data showed manufacturing activity contracted for a second straight month in May.
The reading pointed to more cooling in the U.S. economy, and saw traders ratchet up bets that the Federal Reserve will begin cutting rates in September.
Key labor data, particularly on nonfarm payrolls, is due this Friday and set to offer more cues on rates. The Fed is also set to meet next week, but is expected to keep rates on hold then.
Among other Asian currencies, The South Korean won’s USDKRW pair rose 0.3% after data showed inflation in the country eased more than expected in May.
The Singapore dollar’s USDSGD pair rose 0.1%.
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