Asian currencies consolidate, with concerns over US debt and expectations of fiscal consolidation likely to support local currencies

(1) Asian currencies against the US dollar showed a consolidating trend in the early Asian session on Monday. USD/JPY remained basically flat at 158.9, while AUD/USD held steady at 0.7166. (2) The US national debt surpassing 40 trillion US dollars for the first time has raised concerns about the sustainability of government debt, which may put pressure on the dollar this week and thus provide some support for Asian currencies. (3) Commonwealth Bank of Australia pointed out that comments by US Treasury Secretary Yellen have heightened market expectations for the budget consolidation plan to be announced this week. If the consolidation effort is limited, it will disappoint the market and could lead to a weaker dollar. (4) The market will closely monitor the specific details of the US budget consolidation plan and its potential impact on the dollar and global asset allocation.