Asia Moves Away from Dollar: Ringgit and Yen Strengthen, but Rupiah Lags
Jakarta, CNBC Indonesia - Asian currencies moved mixed against the United States (US) dollar in trading on Thursday (2/7/2026). The market appeared hesitant to take large positions as it awaited US labour data, which will provide important clues on the direction of the US central bank’s (The Federal Reserve/The Fed) interest rate policy.
Referring to Refinitiv data as of 09.15 WIB, out of 10 Asian currencies, seven strengthened against the US dollar, two weakened, and one remained stagnant.
Although the majority of Asian currencies managed to strengthen, the rupiah has yet to enjoy this sentiment. The Garuda currency weakened 0.25% to a position of Rp17,975/US.ThispositionbringstherupiahveryclosetothepsychologicallevelofRp18, 000/US.
Besides the rupiah, the South Korean won also entered the red zone. The won weakened 0.13% to KRW 1,552.7/US$.
On the other hand, the Malaysian ringgit was the currency with the sharpest strengthening in Asia, rising 0.24% to MYR 4.082/US.TheChineseyuanfollowedwitha0.16. The Thai baht also strengthened 0.12% to THB 33.30/US$.
The Taiwan dollar and Singapore dollar both rose 0.08%, to TWD 31.846/US$ and SGD 1.294/US$ respectively. The Japanese yen also edged up 0.04% to JPY 162.51/US$. However, the yen’s position remains in a very weak area and close to its lowest level in 40 years, or since 1986.
The Vietnamese dong also inched up 0.02% to VND 26,294/US, whilethePhilippinepesomovedstagnantlyatPHP61.598/US.
This condition occurs amid the dynamics of the US dollar’s movement in the global market. The US dollar index (DXY) was observed to have weakened slightly by 0.04% to 101.350 at the same time. Despite moving lower, the US dollar remains at a high level as the market awaits US nonfarm payrolls data.
US labour data is the main agenda today. Based on a Reuters poll, the US economy is estimated to have added 110,000 jobs in June, while the unemployment rate is expected to remain at 4.3%.
This data is important because the market is looking for new clues about the strength of the US economy. If the labour market remains strong, expectations for a Fed rate hike this year could strengthen again and provide additional power for the US dollar.
Fed Chair Kevin Warsh said on Wednesday that inflation expectations and price risks have begun to ease in recent weeks. On the other hand, the ADP report showed that US private sector employment is still growing, but lower than expected.
Senior analyst at Mitsubishi UFJ Bank, Akihiko Yokoo, assessed that the US dollar could still receive a boost if US labour data comes out stronger than market expectations. “If the payrolls data exceeds market expectations, the dollar could surge higher again,” Yokoo said in his notes, as quoted by Reuters.
So far, the US dollar has been supported by rising expectations of a Fed rate hike this year. A fairly strong labour market also reinforces the view that the US economy remains resilient, especially as job creation has exceeded expectations in the last three months. In addition, the US dollar is also supported by capital flows into US assets. One of the triggers is the development of artificial intelligence (AI), which is driving investor interest in dollar-based assets.