Asian currencies remained largely stable on Monday as investors adopted a cautious stance ahead of several crucial central bank meetings this week. The U.S., Japan, China, and Taiwan are all set to announce interest rate decisions, keeping currency markets in a holding pattern.
The U.S. Dollar Index was little changed at 103.71 during Asian hours, lingering just above its recent four-month low. Market participants are now focused on the Federal Reserve’s meeting starting Tuesday, where rates are expected to remain unchanged. However, traders will closely watch the Fed’s outlook on tariffs and their impact on inflation and economic growth.
The Bank of Japan is also expected to maintain its benchmark interest rate at 0.5% during its March 18–19 meeting, despite growing inflationary pressure. Concerns over trade tensions related to U.S. tariffs continue to weigh on sentiment. The yen (USD/JPY) remained flat.
In China, both the onshore and offshore yuan held steady as markets digested a fresh government stimulus plan aimed at boosting domestic consumption. China’s loan prime rate decisions are due Thursday.
Taiwan’s central bank will also meet Thursday, with the Taiwan dollar (USD/TWD) inching up 0.1%. Other regional movements were modest — the Australian dollar (AUD/USD) rose 0.1%, while the Singapore dollar (USD/SGD) was steady. The South Korean won (USD/KRW) slipped 0.3%, and the Indian rupee (USD/INR) gained 0.1%.
China Data Mixed Amid Stimulus Push
China on Sunday unveiled a “special action plan” to stimulate consumption by raising incomes, easing financial burdens, and boosting demand in sectors like housing, automobiles, and AI technology.
Meanwhile, economic data showed mixed trends. Industrial production rose 5.9% year-on-year in January-February, beating forecasts, while retail sales increased 4.0%. However, the unemployment rate climbed to 5.4%, signaling labor market pressure and underscoring the need for further stimulus to meet China’s 5% growth goal.
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