Asian Currencies Mixed: Rupiah Leads Gains as Yen and Won Weaken

The Indonesian rupiah led gains among Asian currencies on Monday morning, strengthening 0.36% to Rp17,820 per US dollar. The Vietnamese dong followed with a 0.19% rise to VND 26,154, while the Thai baht gained 0.12% to THB 32.99. The Philippine peso edged up 0.07% to PHP 60.781, and the Malaysian ringgit and Taiwan dollar both strengthened 0.05%. The Chinese yuan also ticked up 0.03% to CNY 6.745.

In contrast, the South Korean won suffered the heaviest pressure in the region, sliding 0.60% to KRW 1,416.17 per US dollar. The Japanese yen weakened 0.29% to JPY 158.26, and the Singapore dollar slipped 0.09%.

The broad Asian currency strength came as the US dollar hovered near a two-month low. The dollar index (DXY) rose 0.14% to 99.679 but remained below the 100 level. The greenback has been under pressure since US labour data on Friday unexpectedly showed the economy shed jobs in July, with payroll additions for the previous two months also revised significantly lower.

The weak employment report dampened expectations for a Federal Reserve rate hike in September. Market pricing now indicates a 44% chance of a hike, down from 67% a week earlier. US Treasury yields also declined, with the 10-year note yielding 4.637%.

Geoff Yu, senior EMEA market strategist at BNY, noted that weaker US labour market signals have lowered real rate expectations and extended the dollar’s decline, though he cautioned it is not yet a clear easing narrative. Attention this week will focus on US inflation data, with consensus expecting core inflation to rise 0.2% month-on-month in July and the annual rate to reach 2.5%. NAB senior FX strategist Rodrigo Catril said the Fed is likely to wait for further data before making its next move.