Dollar Kicked Everywhere: Rupiah, Won-Yen Mighty, Ringgit Weeps

Asian currencies opened the week on a positive note, with the majority strengthening against a weakening US dollar on Monday. According to Refinitiv data as of 09:15 Western Indonesia Time, eight out of ten monitored Asian currencies advanced against the greenback, while one weakened and another remained stagnant. The Indonesian rupiah moved positively, strengthening 0.06% to Rp17,980 per US dollar, bringing it back below the psychological level of Rp18,000. The sharpest gain was recorded by the South Korean won, which surged 0.90% to KRW1,429 per US dollar, making it the best-performing Asian currency of the morning. The Japanese yen also strengthened significantly, rising 0.65% to JPY156.54 per US dollar, as the market continued to assess the potential for further intervention by Japanese authorities. The Philippine peso gained 0.30% to PHP61.030 per US dollar, followed by the Thai baht which rose 0.24% to THB33.32. The Singapore dollar and Taiwan dollar posted modest gains of 0.08% and 0.04% respectively, while the Vietnamese dong edged up 0.01% to VND26,289. In contrast, the Malaysian ringgit was the sole Asian currency to weaken, slipping 0.05% to MYR4.085 per US dollar, while the Chinese yuan remained stagnant at CNY6.7509. The broad strengthening of Asian currencies came amid a decline in the US dollar index, which fell 0.21% to 99.707. The greenback remained under pressure after dropping more than 1.5% the previous week, with additional headwinds coming from a decline in global oil prices after US President Donald Trump said he had called off a strike on Iran and that talks between the two sides would take place on Monday. The easing of oil prices reduced some global inflation concerns, further weighing on the dollar and providing room for Asian currencies to appreciate. However, markets remain cautious, with investor focus this week on the US nonfarm payrolls data due Friday, which will provide important clues on the state of the US labour market and the Federal Reserve’s policy direction. Analysts at OCBC noted that incoming US economic data this week will be crucial in shaping market expectations for the Fed, adding that a resilient labour market or signs of stalling disinflation could increase pressure on the central bank to reinforce its inflation-fighting credibility.