Rupiah and Won Lead Asian Gains as Ringgit Falls

The Indonesian rupiah and South Korean won led gains among Asian currencies on Friday, while the Malaysian ringgit suffered the steepest decline. The rupiah strengthened 0.17% to Rp17,950 per US dollar, continuing its sharp rally from the previous session. The won followed with a 0.15% gain to KRW 1,477.2 per dollar, and the Philippine peso edged up 0.06% to PHP 61.583.

In contrast, the ringgit fell 0.20% to MYR 4.078 per dollar. The Thai baht slipped 0.12% to THB 33.61, while the Taiwan dollar and Singapore dollar both weakened 0.06% to TWD 32.277 and SGD 1.2905 respectively. The Vietnamese dong dropped 0.04%, the Chinese yuan declined 0.03% to CNY 6.774, and the Japanese yen edged down 0.02% to JPY 162.43.

The US dollar index was steady at 100.764 but remained on a weekly losing streak, down 0.24% for the week. Pressure on the greenback mounted after US inflation data came in lower than expected, prompting markets to scale back bets on near-term interest rate hikes by the Federal Reserve. The CME FedWatch Tool now shows only an 11% chance of a July rate increase, down from 25% a week ago, with markets pricing in just 26 basis points of tightening by December.

However, the dollar’s decline was cushioned by heightened geopolitical tensions between Iran and the US, which boosted safe-haven demand. OCBC noted the dollar remains the highest-yielding safe-haven currency among G10 nations. US economic resilience also provided support, with retail sales edging higher in June and labour market conditions remaining stable, prompting economists to raise second-quarter growth forecasts. Fed Vice Chair Philip Jefferson signalled openness to further rate hikes if inflation does not improve.