Inflation’s forex influence, and signs of strength in China

A recent uptick in U.S. inflation has lowered expectations for softer Federal Reserve policy ahead – a situation that could continue to support the US dollar, but for other countries could “bring the local currency under pressure”, says Stefanie Holtze-Jen, the Private Bank's APAC CIO. There are “challenges that come from this type of backdrop.”

Stefanie notes that China recorded "robust consumption trends" during the Chinese New Year holiday period, including higher retail sales, services consumption, and travel. She also says that consumer sentiment there is stabilising as international investors have been re-evaluating the country's tech sector following successes in artificial intelligence.

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