Most Asian currencies strengthened against the US dollar on Thursday due to the receding possibility of a US rate hike this month and relief over a surprise swing back to growth in Chinese factory activity. The Indian rupee rose 0.3% against the US dollar due to higher-than-expected GDP growth, while the yuan reversed some of its losses from the previous session. China’s factory activity swung back to growth in May from the previous month’s decline, which helped struggling firms hit by slumping profits. Asian economies depend heavily on the strength of the Chinese economy, which has been faltering lately as a post-Covid recovery loses momentum. Meanwhile, the US dollar dropped from a two-week high against major peers after Federal Reserve officials pointed towards a rate hike “skip” in June. South Korea’s exports fell for the eighth consecutive month, but the pace was slower than expected, with signs that the worst had passed for chip and China-bound shipments.

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