Investing.com-- Most Asian currencies were little changed against a muted U.S. dollar on Monday, as investors were cautious ahead of key interest rate decisions from the U.S., Japan, and China, all due later this week.
For the day, investors assessed China’s announcement of a special action plan to boost consumption, and a barrage of economic data released on Monday.
The US Dollar Index was largely unchanged at 103.71 in Asian trading as of 02:52 GMT, remaining slightly above a four-month low it reached earlier this month.
Rate decisions from US, Japan, China, and Taiwan due this week
This week, several major economies, including the U.S., Japan, China, and Taiwan, are scheduled to announce their latest interest rate decisions.
Market participants are keenly awaiting the Federal Reserve’s policy meeting starting on Tuesday, where interest rates are expected to remain steady.
However, the Fed’s commentary on tariffs’ impact on inflation and growth will be closely scrutinized.
Additionally, the Bank of Japan’s upcoming meeting on March 18–19, is anticipated to maintain the current interest rate at 0.5%, despite rising inflationary pressures, as officials are concerned about rising trade tensions stemming from U.S. President Donald Trump’s tariffs.
The Japanese yen’s USD/JPY pair was largely muted.
China’s loan prime rates will be released on Thursday.
The Chinese yuan’s onshore USD/CNY, and offshore USD/CNH pairs, were both steady on Monday.
Taiwan’s central bank is set to hold its quarterly monetary policy meeting on Thursday.
The Taiwan dollar’s USD/TWD pair edged up 0.1%.
Elsewhere, the Australian dollar’s AUD/USD pair ticked 0.1% higher, while the Singapore dollar’s USD/SGD was largely muted.
The South Korean won’s USD/KRW pair fell 0.3%, while the Indian rupee’s USD/INR inched up 0.1%.
China announces plan to boost consumption; Feb industrial prod, retail sales in focus
China unveiled on Sunday a comprehensive "special action plan" to bolster domestic consumption, aiming to invigorate economic growth amid recent challenges.
The plan focuses on increasing residents’ incomes, reducing financial burdens, and enhancing the consumption environment. It targets both traditional sectors like housing and automobiles, as well as emerging areas such as artificial intelligence-powered products.
Meanwhile, economic indicators released on Monday reflect a mixed outlook.
In January and February, industrial production grew by 5.9% year-on-year, surpassing expectations of 5.3%.
Retail sales saw a 4.0% increase, up from December’s 3.7%, driven by Lunar New Year spending.
However, the urban unemployment rate rose to 5.4% in February, the highest in two years, indicating ongoing labor market challenges.
These developments underscore the necessity of China’s action plan to stimulate domestic demand and achieve its 2025 economic growth target of around 5%.