Move Aside America! Taiwan Dollar and Rupiah Become Asia's Kings This Week
Jakarta, CNBC Indonesia - The majority of Asian currencies strengthened at the close of the final trading day of the week, Friday (14/8/2026). However, when calculated over the week, most weakened.
The rupiah closed the week with a gain against the US dollar. The Garuda currency managed to reverse early trading pressure, as the US dollar weakened in global markets.
According to Refinitiv data, the rupiah on Friday (14/8/2026) closed up 0.22% at Rp17,820/US$. This was the second consecutive gain after the previous day’s modest 0.03% rise.
Over the week, the rupiah recorded a 0.36% gain. At the end of the previous week, the rupiah was still at Rp17,885/US$.
US Dollar Under Pressure, Asian Currencies Strong
The dollar index fell to 99.67, its weakest in six days, on Friday.
This weakening served as a positive catalyst for Asian currencies. The majority of Asian currencies strengthened on Friday.
The Taiwan dollar and the rupiah led the way. Only the Philippine peso weakened.
The dollar weakened after US inflation data cooled.
US Producer Price Index (PPI) data was one of the main catalysts. PPI in July 2026 was unchanged month-on-month, lower than economists’ expectations of a 0.2% increase. Previously, PPI in June fell 0.1%.
The data reinforced signals that inflationary pressure in the US is beginning to ease and reduced market expectations of a Federal Reserve interest rate hike in September.
Earlier, US consumer inflation data also showed relatively limited price increases in July. Both annual inflation and core inflation eased.
The combination of data led the market to further trim expectations of a Fed rate hike.
The probability of a rate hike in September is now estimated at only 35%, down from 40% on Wednesday and 55% a week earlier.
Lower rate hike expectations make US assets less attractive and pressure the dollar. This provides room for emerging market currencies, including the rupiah, to strengthen.
Most Asian Currencies Still Weaker Over the Week
The weaker US dollar provided fresh air for Asian currencies, which had previously been under pressure from dollar strength and high US bond yields.
However, over the week, many Asian currencies weakened.
The Taiwan dollar led with a 0.72% gain, followed by the rupiah.
Conversely, the peso, won, and rupee remained weaker over the week.
With the dollar index weakening, central banks in the Asian region now potentially have more room to manage their respective monetary policies, as the risk of capital outflows and currency depreciation declines.
However, analysts caution that the Fed’s next move still depends heavily on economic data. If inflation rises again, the current trend could quickly reverse.
Philippine Peso Breaches 61/Dollar, Oil Prices the Culprit
The Philippine peso weakened again to 61.26 per US dollar, down 55.5 centavos from its previous position. The weakening occurred as Brent crude prices approached US$90 per barrel after US-Iran negotiations hit another dead end.
As a net oil importer, rising oil prices increase the Philippines’ need for US dollars and pressure the peso. Brent itself rose about 5% in two days.
Union Bank of the Philippines economist Ruben Carlo O. Asuncion assessed that the peso’s weakening was driven more by global factors, such as rising US Treasury yields, a stronger US dollar, and the oil price surge due to Middle East tensions.
Union Bank of the Philippines chief economist Ruben Carlo O. Asuncion assessed that the peso’s latest weakening was driven more by external factors than domestic conditions.
“Rising US Treasury yields, a stronger US dollar, and the oil price surge due to heightened Middle East tensions are likely weighing on emerging market currencies, including the peso,” he told Reuters.
As long as Brent prices remain around US$90 per barrel and US Treasury yields stay high, the peso is expected to remain under pressure.
Going forward, the peso’s movement will depend heavily on US inflation data, Fed policy expectations, oil prices, and geopolitical developments. Prolonged weakening also risks increasing Philippine import inflation.
MUFG Warns ASEAN Currencies Still Vulnerable
MUFG Bank warned that ASEAN currencies are increasingly vulnerable to a combination of weakening regional economic data and growth concerns.
In its latest note to clients, MUFG sees the ASEAN foreign exchange market outlook as still cautious. Investors are now scrutinising the impact of weaker-than-expected economic data, amid shifts in global monetary policy direction.
MUFG noted that a number of recent economic data points in the ASEAN region have come in below market expectations. This raises questions about the resilience of Southeast Asian economies.
The bank specifically highlighted the slowdown in manufacturing activity and export demand, which are important growth engines for many ASEAN countries.
This weakening, coupled with global economic growth uncertainty, adds pressure on regional currencies.
At the same time, ASEAN central banks face a dilemma between supporting domestic economic growth and maintaining currency stability.
The Fed’s stance, expected to remain tight for longer than previously anticipated, further widens the interest rate differential between the US and ASEAN countries. This could add depreciation pressure on regional currencies.
According to MUFG, market participants now tend to take more cautious positions in the foreign exchange market. Investors are reducing exposure to risky assets, including ASEAN currencies, and shifting to assets deemed safer.