The euro could weaken if expectations for further European Central Bank rate increases ease, according to SMBC Nikko Securities strategists. ECB Chief Economist Philip Lane noted that rising energy prices may cool demand in the eurozone, potentially limiting the need for additional rate hikes. The central bank's cautious stance and possible government bond-purchase programs may fuel speculation of a weaker euro. After recent declines due to concerns about French debt, the euro is approaching $1.10, last trading at $1.1218.
Meanwhile, the Singapore dollar remains steady against the U.S. dollar, with OCBC FX strategists saying it will follow cues from the greenback and Treasury yields. Attention is shifting to the Monetary Authority of Singapore's upcoming policy decision, expected this month. The U.S. dollar is at 1.2796 Singapore dollars.
Asian currencies consolidated against the dollar in early trade, with markets focusing on U.S. data, including August trade figures due later Tuesday. UOB's research team says the reading will offer clues on the U.S. economy's health. Investors are also watching Fed officials for signals on the interest-rate outlook. The U.S. dollar is flat at 157.93 yen and 0.1% higher at 1343.50 won, while the Australian dollar is steady at US$0.6968.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing