Asia FX muted as PMIs boost dollar, Aussie rises on rate hike bets
Investing.com-- Most Asian currencies fell slightly on Wednesday as strong overnight data boosted the dollar, while the Australian dollar rose sharply as a strong inflation reading fueled expectations for an interest rate hike in November.inflation grew slightly more than expected in the third quarter. The reading came just a few days after Reserve Bank of Australia Governor Michele Bullock warned that sticky inflation could elicit more interest rate hikes..
The prospect of a rate hike bodes well for the Australian dollar, which recently sank to 2023 lows amid concerns over slowing economic growth in the country. Optimism over China- Australia’s biggest trading partner- also aided the Australian dollar, as Beijing announced a 1 trillion yuan bond issuance to fuel infrastructure development. The move is expected to fuel increased commodity demand in China, particularly for metals.weakened after the announcement, coming close to a one-year low, given that the bond issuance will also ramp up the country’s already elevated debt levels.
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