Odd! Weak Dollar Leaves Asian Currencies Anxious; Only Won-Ringgit Stand Firm
The weakening of the United States dollar has not been strong enough to lift Asian currencies in trading on Tuesday (18/8/2026). The majority of regional currencies actually moved lower against the greenback, amid market sentiment that remains fragile due to global uncertainty.
According to Refinitiv data as of 09.15 WIB, of the 10 Asian currencies monitored, seven weakened against the US dollar, while three managed to strengthen.
The South Korean won was the currency with the sharpest gain in Asia this morning. The won strengthened 0.33% to KRW 1,410.9 per US dollar.
The Malaysian ringgit followed with a rise of 0.27% to MYR 4.049 per US dollar. The Taiwan dollar also moved positively, strengthening 0.24% to TWD 31.78 per US dollar.
On the other hand, the Philippine peso was the currency under the deepest pressure in Asia. The peso weakened 0.19% to PHP 61.586 per US dollar.
The rupiah was also among those that weakened against the greenback. The Garuda rupiah fell 0.14% to Rp17,845 per US dollar.
The Thai baht declined 0.09% to THB 33.04 per US dollar, followed by the Chinese yuan, which weakened 0.06% to CNY 6.743 per US dollar.
The Japanese yen and the Vietnamese dong both weakened 0.04%, to JPY 159.5 per US dollar and VND 26,211 per US dollar respectively. The Singapore dollar also edged down 0.03%.
Asian currency movements today were still influenced by the dynamics of the US dollar. The US dollar index (DXY) at the same time was observed weakening 0.06% to 99.581.
The DXY remained below the 100 level and was moving near its lowest level in several months. Pressure on the US dollar emerged after the market trimmed expectations of an interest rate hike by the US central bank, the Federal Reserve, in the near term.
US economic data has recently signalled a slowdown. US retail sales in July fell for the first time in nine months, following weaker labour data and relatively tamer inflation.
These conditions led market participants to lower the probability of a Fed rate hike in September. Based on the CME FedWatch Tool, the probability of a rate hike at the September meeting fell to 35%, from 52.2% the previous week.
However, the weakening of the US dollar did not immediately cause Asian currencies to strengthen across the board. Market sentiment remains fragile because the risk of escalating war in the Middle East has increased again, especially after talks to end the US-Iran conflict reached a dead end.
These geopolitical risks have also helped keep oil prices high. Brent rose 0.3% to US$91.14 per barrel after touching its highest level since 30 July in Monday trading.
Nohshad Shah, head of EMEA fixed income sales at Citadel Securities, assessed that inflation risks still cannot be ignored amid the potential for global supply disruptions.
“Inflation has been above target for almost the entire past five years. An annual inflation rate in the high 2% range may be acceptable to the Fed, but it leaves the inflation process with almost no room to breathe in a world that continues to face supply shocks,” Shah said, as quoted by Reuters.
Under these conditions, the US dollar is indeed under pressure because expectations of a rate hike have declined. However, concerns about oil prices and Middle East tensions are keeping market participants cautious.