Most Asian currencies were trading flat with investors cautious over the prospect of more nuclear weapons tests by North Korea and renewed political disruption in the United States after President Donald Trump abruptly fired FBI Director James Comey.
Most Asian currencies were trading flat with investors cautious over the prospect of more nuclear weapons tests by North Korea and renewed political disruption in the United States after President Donald Trump abruptly fired FBI Director James Comey. Pyangyang’s ambassador to Britain, Choe Il, said in an interview with Sky News on Tuesday that North Korea was ready to conduct a sixth nuclear test, stoking investor fears that military tensions on the Korean Peninsula could escalate at any time. “We have got
“We have got bit of risk aversion coming because of geopolitical-sabre rattling.” said Stephen Innes, senior trader at OANDA. The South Korean won was the worst performer hit in the region tracking declines in local equities. The broader index fell more than quarter of a percent. On Wednesday, South Korea’s new President Moon Jae took the oath of office a day after his liberal Democratic Party’s decisive victory in an election called to replace Park Geun-hye, who was removed from office in March over a corruption scandal.
“Moon Jae-in’s presidency is positive for the market. However, because his win has been widely expected we believe there may be some ‘sell on the news’ profit-taking pressure,” CLSA said in a note. News from China of slowing factory-gate prices added to the gloom around emerging-Asia currencies. China’s April producer price inflation was 6.4 percent from a year earlier, slower than the economist’s expectations for 6.9 percent, and fall from the previous month’s 7.6 percent.
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The softer April inflation data, combined with slightly slower growth in manufacturing activity, reinforced analysts’ views that China’s economic expansion remains solid but is starting to moderate after a surprisingly strong start to the year. Some analysts said benign inflation data would give the People’s Bank of China (PBOC) more leeway to tighten policy. “Policy makers may step back from the relatively aggressive monetary policy tightening, under the backdrop of mild inflationary pressures and weakening activity growth,”
Goldman Sachs said in a note. Monetary policy is not expected to be tightened in the Philippines either, according a Reuters poll taken ahead of a central bank policy meeting scheduled for Thursday. The Philippine peso was trading flat on the day, as were several other emerging market currencies.
(Reporting By Patturaja Murugaboopathy in Bengaluru; Editing by Eric Meijer)