Asia FX ticks down ahead of Jackson Hole; kiwi slides after RBNZ rate cut

Investing.com-- Most Asian currencies edged lower on Wednesday as investors stayed cautious ahead of the Federal Reserve’s Jackson Hole symposium for cues on the U.S. rate path and the timing of a possible September cut. 

Regional moves were also shaped by a busy data docket, with China holding its key lending rates steady, Japan’s export slump underscoring external headwinds, and New Zealand easing policy as expected.

The US Dollar Index, which measures the greenback against a basket of major currencies, edged 0.1% higher in Asia hours after gains in the previous session.

RBNZ cuts rates by 25 bps; kiwi dollar hits 4-mth low

The Reserve Bank of New Zealand trimmed the official cash rate by 25 basis points to 3.00% on Wednesday and signalled scope for further easing if inflation pressures continue to ease.

The Monetary Policy Committee voted 4-2 for Wednesday’s move, with two members preferring a larger 50 basis point cut.

The New Zealand dollar’s NZD/USD pair slipped more than 1% its lowest level since mid-April.

China keeps LPR steady; Japan exports decline

The Chinese yuan’s onshore pair USD/CNY was little changed after the People’s Bank of China kept the one-year Loan Prime Rate at 3.0% and the five-year at 3.5%, as expected. 

The hold, the third straight month without a move, reinforced views that authorities prefer targeted support over broad monetary easing while growth remains uneven.

In Japan, data showed that exports fell 2.6% in July from a year earlier, marking a third consecutive monthly drop and highlighting pressure on trade from U.S. tariffs. 

The report also showed a surprise trade deficit as imports declined less than forecast.

The Japanese yen’s USD/JPY pair was largely unchanged on Wednesday.

Traders remain cautious ahead of Fed Jackson Hole

Elsewhere in Asia-Pacific, the Australian dollar’s AUD/USD pair edged 0.2% lower.

The South Korean won’s USD/KRW pair rose 0.4%, while the Indian rupee’s USD/INR and Singapore dollar’s USD/SGD were largely muted.

Across the globe, focus was on the Federal Reserve’s Jackson Hole symposium, where Chair Jerome Powell is expected to deliver an important speech on Friday. 

Traders will look for signals on whether the central bank is likely to cut rates by 25 basis points in September, following data last week showing hotter U.S. producer and import prices.

The figures reduced the chances of a larger half-point move, with futures markets now assigning an overwhelming probability to a smaller cut.