Anna 
Most Asian currencies experienced a modest weakening on Monday, while the dollar stabilized as traders adopted a cautious stance ahead of a series of crucial economic reports scheduled for this week.
Sentiment was impacted by mixed signals from China, where data indicated a sustained but narrowing decline in industrial profits. In response, top Chinese officials called for increased financial support for local businesses amid a slowing economic recovery. The yuan slipped 0.1%, following a slightly weaker daily midpoint fix by the People’s Bank of China, with focus turning to Thursday’s purchasing managers index (PMI) data for insights into business activity.
Although PMI readings for October fell short of expectations, Beijing has additional stimulus measures in the pipeline, including a 1 trillion yuan ($139 billion) bond issuance, expected to bolster growth in the coming months. Despite these efforts, near-term sentiment towards China remained weak, contributing to subdued conditions in broader Asian markets.
The Australian dollar faced a 0.2% decline, with attention shifting to imminent inflation and retail sales data. Reserve Bank of Australia Governor Michele Bullock’s upcoming speech adds to market considerations, following her warning that inflation is likely to persist in the coming months.
South Korea’s won dipped 0.1% ahead of a Bank of Korea rate decision, widely anticipated to maintain the current interest rates. The Indian rupee hovered near record lows, while the Thai baht saw a 0.4% increase, despite data revealing a surprise trade deficit in October.
The Japanese yen emerged as one of the stronger performers, recording a 0.4% rise. Investors are eyeing Japanese industrial production and retail sales data scheduled for release later in the week.
Throughout November, most Asian currencies enjoyed significant gains on the back of growing optimism that the U.S. Federal Reserve had concluded its interest rate hikes, a trend that also contributed to the dollar nearing three-month lows.
As markets brace for a new set of economic readings, the dollar index and dollar index futures displayed minimal movement in Asian trade on Monday. Traders are eagerly awaiting key economic indicators from the U.S. this week, including the Personal Consumption Expenditures (PCE) price data— the Fed’s preferred inflation gauge—scheduled for Thursday. Additionally, a second reading on gross domestic product (GDP) for the third quarter will be closely watched. Any indications of cooling inflation and economic growth are expected to influence expectations of a less hawkish Fed, potentially impacting the dollar and favoring Asian markets.
The week also brings U.S. consumer confidence and PMI readings for November, providing further insights into the world’s largest economy.
