On Wednesday, Chinese GDP figures that were better than expected gave Asian currencies a lift, pushing the yuan to a one-week high and depressing the dollar’s value.

However, a bomb at a Gaza hospital kept activity low and traders on edge due to the possibility of the war spreading. U.S. Vice President Joe Biden is scheduled to go to Israel on Wednesday.

China’s GDP expanded by 1.3% in the third quarter, above market expectations of a 1% gain and speeding up from 0.5% in the second quarter. Both industrial production and unemployment decreased.

The Chinese yuan rose to a one-week high of 7.2905 against the dollar before falling to 7.312. The New Zealand dollar was up 0.18% at $0.5907, while the China-sensitive Australian dollar was up 0.24% at $0.6381.

According to Erik Nelson, macro analyst at Wells Fargo, “the Kiwi and Aussie are outperforming, but I’m surprised that (the data is) not having a little bit more of an impact given how negative views have been on Chinese growth.”

According to Nelson, there hasn’t been much of an investment response to the Israel-Hamas war. “If it spread to other regions which get pulled into the conflict, like Iran, then that’s another story, but we’re not there yet.”

At 106.19, the dollar index was slightly lower. The index, which compares the dollar’s value to six important rival currencies, increased 0.53% on Tuesday but is still down from the 11-month high of 107.34 last week.
Imre Speizer, a Westpac analyst, said, “It’s had a really good run, but it’s kind of stalled.” “Maybe it’s hitting the limits of this stage of the rally, and needs a bit of a correction.”

Sterling increased 0.1% to $1.2194 as statistics revealed that British inflation did not decline as anticipated in September, while the euro held constant at $1.0571.

Israel’s shekel was trading near its lowest since 2015, just around 4 to the dollar.

The benchmark 10-year Treasury yield has increased by nearly 100 basis points since mid-July, and the dollar index has increased by almost 7% due to the U.S. economy’s continued strength.

Tuesday saw a sharp spike in U.S. yields as statistics revealed that retail sales had surged significantly. This helped the dollar exert pressure on the Japanese yen, where an ultra-loose monetary policy stifles bond return growth.

The yen was recently marginally higher against the dollar at 149.69. In an unexpected move, the Bank of Japan stated on Wednesday that it will continue to buy bonds for $2 billion to keep rates low.

After previous government interventions to support the currency happened around that level, the 150 yen mark has grown to be a crucial psychological milestone. The yen saw a big rally earlier in October after crossing the 150 mark, but it then declined, and there are early signs that Japan did not step in.