Overview

The U.S. dollar remained near a 13‑month peak on Wednesday, with the dollar index rising 0.1% to 101.48, reinforcing pressure on Asian currencies. Most regional units edged lower as the stronger dollar reflected growing expectations of further Federal Reserve tightening and continued demand for safe‑haven assets after a sharp sell‑off in global technology stocks.

Currency Movements

  • The South Korean won weakened, with USD/KRW climbing 0.5% to 1,539.9, making it one of the weakest performers despite a rebound in Korean equities.
  • The Japanese yen lingered near multi‑decade lows, with USD/JPY holding around 161.6, showing little reaction to a summary of BoJ June meeting opinions where some policymakers favoured additional rate hikes after the central bank lifted rates to 1.0%, the highest level in more than three decades.
  • The Chinese yuan appreciated modestly, with USD/CNY up 0.2% and the offshore USD/CNH pair also gaining 0.2%, after the People’s Bank of China set its daily midpoint weaker for a fourth consecutive session, signalling greater tolerance for currency flexibility.
  • Taiwan’s dollar slipped 0.1% against the U.S. dollar (TWD/USD), with investors awaiting industrial production data for clues on the island’s export and semiconductor health.
  • The Australian dollar was largely unchanged, while underlying inflation accelerated to 3.6% in May, exceeding expectations and bolstering the case for the Reserve Bank of Australia to keep rates higher for longer.
  • The Thai baht rose 0.6% versus the dollar (USD/THB) ahead of the Bank of Thailand’s policy decision, where economists broadly expect rates to remain unchanged after recent data showed inflation easing in May.
  • Malaysia’s ringgit weakened marginally, with USD/MYR edging higher, as Bank Negara Malaysia announced additional measures to encourage foreign inflows and increase repatriation of overseas earnings.

U.S. Economic Outlook

Investors are focused on a slate of U.S. data releases later in the week, including durable goods orders, weekly jobless claims, and the Personal Consumption Expenditures (PCE) price index scheduled for Friday, which could influence expectations of further Fed rate hikes.

Reporting

The article was reported by Roushni Nair for Investing.com, citing Reuters as the source.