On Thursday, the dollar reached seven-week highs as optimism over raising the U.S. debt limit and anticipation of additional monetary policy cues led most Asian currencies to move little.

The Chinese yuan was a notable exception, falling to its lowest level in more than five months amid growing concerns about the country’s slowing economic recovery.

The yuan lost 0.1% against the dollar, crossing the psychologically significant level of 7 for the first time since early December. The government and traders closely monitor a breach of the 7 level, which typically signals additional losses for the Chinese currency.

Even though anti-COVID measures were lifted earlier this year, a series of weaker-than-expected economic readings in April suggested that the country’s recovery was slowing. Markets also started speculating that the People’s Bank of China might cut interest rates more to help the economy, which would be bad news for the yuan.

The seaward yuan, which had penetrated the 7 level recently, fell 0.3%.

As the Biden Administration stated that a deal on raising the debt limit could be struck as soon as this week, broader Asian currencies moved in a range that was flat to low. These currencies were put under pressure by a stronger dollar.

Capital flows back into the dollar and Treasuries were fueled by the move, which allayed fears of a debt default in the United States.

After significant overnight losses, the Japanese yen gained 0.1 percent, while the Taiwan dollar and the Singapore dollar moved less than 0.1 percent in either direction.

The data indicating that Japan’s enormous trade deficit decreased more than anticipated in April provided some support for the yen. However, a decrease in Japanese imports and exports indicated additional economic obstacles for the nation, particularly in light of sluggish demand in its most important export markets.

The Australian dollar fell 0.2%, as milder than-anticipated work information highlighted lesser financial headroom for the Hold Bank to continue to raise loan fees.

The dollar record and dollar file prospects were consistent in Asian exchange in the wake of ascending to a seven-week high in short-term exchange.

Markets are presently anticipating a large number of Central bank speakers this week, most outstandingly Seat Jerome Powell on Friday, for additional signals on financial strategy.

This week, Fed officials gave a hawkish outlook on monetary policy, with policymakers still agreeing that inflation was still too high and that the Fed could still raise interest rates further.

This conflicted with market assumptions that the Fed will stop rates in June, as proposed by Took care of Asset future costs . Be that as it may, with U.S. loan costs set to stay higher for longer, Asian monetary standards are probably going to confront expanded strain before very long.