USD sets for weekly loss as concern over Fed minutes eases; Asian currencies in focus as COVID cases surge again

USD was up on Thursday morning in Asia as FOMC minutes released on Wednesday in the US, but now the DXY Index has already slipped below 90. In the Fed’s meeting minutes, several policymakers have suggested the central bank to scale back asset purchases if the US continues to recover from the pandemic. However, the Fed Chairman Jerome Powell once again reiterated that current inflation will only be temporary. The worries pushed USD up on Thursday for a little bit, but as investors ease their concerns, the currency quickly went down.

Japan’s April data showed that, core CPI contracted 0.1% on a YoY basis, but it was higher than the forecast at -0.2%. The news pushed down JPY against USD. Other than JPY, investors are now turning to several Asian currencies. For example, Taiwan and Singapore have recently seen a spike in new cases. New restrictive policies have been in place to curb the virus and this may affect local economy to some degree. Moreover, Malaysia entered a nationwide lockdown last week and will be lasted until June 7. Thailand has cut its 2021 economic growth forecast on Monday, from 1.5%~3% to 0.5%~2%.