Most Asian currencies and the dollar were largely unchanged on Tuesday as investors treaded carefully ahead of a looming U.S. government shutdown, while the Australian dollar gained after the country’s central bank held interest rates steady as expected.
Regional traders also assessed weak factory output data from Japan and mixed business activity readings from China.
The US Dollar Index, which measures the greenback against a basket of major currencies, edged 0.1% higher. US Dollar Index Futures were largely unchanged as of 04:30 GMT.
RBA holds rates steady as expected; Aussie dollar rises
The Reserve Bank of Australia held its cash rate steady at 3.60% on Tuesday, in line with market expectations, as officials opted to wait for clearer signs from inflation and labour market data.
The decision marks a pause after three cuts earlier in 2025 as the RBA balances upside inflation risks against signs of cooling in economic momentum. The central bank emphasised that it remains data-dependent.
In financial markets, the Australian dollar’s AUD/USD pair gained 0.5% after the decision.
US govt shutdown looms ahead of key jobs data
Congress faces a deadline on Tuesday to approve funding and avert a partial government shutdown that could disrupt the release of key economic data.
The Labour Department has warned that if the shutdown takes effect, the Bureau of Labor Statistics may be unable to publish employment figures, including Friday’s non-farm payrolls report, a critical gauge for the Fed’s policy outlook.
The week’s calendar includes the Job Openings and Labor Turnover Survey (JOLTS) later on Tuesday, weekly jobless claims on Thursday, and the September payrolls report on Friday.
Asian currencies traded in tight ranges, with traders reluctant to take positions ahead of clarity on U.S. data flows and the Federal Reserve’s rate outlook.
The Japanese yen’s USD/JPY pair traded flat on Tuesday, while the Singapore dollar’s USD/SGD edged up 0.1%.
The South Korean won’s USD/KRW pair gained 0.2%, while the Indian rupee’s USD/INR was largely unchanged.
The Chinese yuan’s onshore USD/CNY pair ticked 0.1% higher, while the offshore pair USD/CNH was steady.
Japan factory output, China PMI data in focus
Data on Tuesday showed that Japan’s factory output fell 1.2% in August from the previous month, marking a second straight month of decline and underscoring continued industrial weakness.
A separate datapoint showed that Japan’s retail sales declined at its fastest pace in four years, highlighting weak private consumption.
In China, official manufacturing activity shrank for a sixth consecutive month in September, while service sector activity also weakened.
However, a private RatingDog survey painted a brighter picture, showing the manufacturing PMI rising at its fastest pace since March, driven by stronger orders and export demand.
Source :
https://www.investing.com/news/forex-news/asia-fx-dollar-flat-amid-us-govt-shutdown-risks-rba-rate-decision-ahead-4262200
