Diverging Fates for Asian Currencies: Rupiah and Ringgit Tumble, Yen Strengthens

Jakarta, CNBC Indonesia - The majority of Asian currencies weakened against the United States dollar in trading on Thursday (11/6/2026). Pressure continues to overshadow the region’s foreign exchange market, even though the US dollar index moved slightly weaker this morning. According to Refinitiv as of 09:15 WIB, six Asian currencies were observed weakening against the greenback, while four currencies managed to strengthen. The rupiah was one of the currencies under pressure. The Garuda currency weakened 0.11% to Rp17,970/US.ThispositionbringstherupiahbackclosertothepsychologicallevelofRp18, 000/US. In contrast, the rupiah had opened at Rp17,925/US, strengtheningby0.14. The Vietnamese dong followed with a correction to VND 26,314/US, depreciatingby0.19, while the Malaysian ringgit corrected slightly by 0.05% to MYR 4.069/US.TheChineseyuanedged0.03. The Singapore dollar and the Philippine peso both strengthened 0.04%, to SGD 1.287/US$ and PHP 61.30/US, respectively.TheJapaneseyenalsoincheduptoJPY160.46/US, strengthening by 0.03%. The US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed weakening slightly by 0.04% to 99.912. Although weakening, the US dollar is still moving near the 100 level, so pressure on Asian currencies has not fully subsided. The US dollar’s movement is still influenced by two major sentiments: geopolitical tensions in the Middle East and the direction of the US central bank’s (The Federal Reserve/The Fed) interest rate policy. The US dollar had moved in a volatile manner after new US strikes in the Middle East depressed market sentiment. The foreign exchange market tends to move limitedly this week as investors weigh the fragility of the Middle East ceasefire amid renewed attacks between the US and Iran. The US military said the United States initiated a new round of strikes on Iran on Wednesday evening local time. US President Donald Trump also pledged to conduct more strikes if a peace deal is not reached. Meanwhile, US inflation data is once again the market’s main focus. The US Consumer Price Index (CPI) rose 4.2% annually in May, the largest increase since April 2023. This rise in inflation is making investors cautious again about the direction of The Fed’s policy. However, core inflation pressure is still relatively more controlled. Core CPI was recorded as rising 0.2% month-on-month, lower than the 0.4% increase in April. James Knightley, chief international economist at ING, assessed that cooling wage pressures could help ease core inflation. ‘This should help keep inflation expectations anchored. So, while we no longer expect the Fed to cut rates this year because of improving economic momentum, we also don’t foresee any rate hikes,’ Knightley said, as quoted by Reuters. Even so, market participants have now fully priced in the chance of a 25-basis-point rate hike in December. This condition marks a sharp change compared to previous expectations, when the market was still forecasting two rate cuts this year before the Iran war broke out at the end of February. For Asian currencies, the combination of geopolitical uncertainty, high US inflation, and Fed interest rate expectations means the room for strengthening remains limited. This is evident from the majority of regional currencies still moving weakly against the US dollar this morning.