US Dollar Slumps Globally, But Why Is the Rupiah Still Weakening?

Jakarta, CNBC Indonesia - Most Asian currencies strengthened against the US dollar (US)inearly − weektradingonMonday, 25May2026.TheglobalweakeningoftheUSdollarcreatedroomforseveralcurrenciestomoveintopositiveterritory.AccordingtoRefinitivdataat09 : 40WIB, eightoutoftenAsiancurrenciesstrengthenedagainsttheUSdollar, whiletwoweakened.However, therupiahremainedoneofthepressuredcurrencies.TheIndonesiancurrencyfell0.17, staying above the psychological level of Rp17,700/US.Alongsidetherupiah, Vietnam’sdongalsoslipped0.05. On the other hand, the South Korean won was the strongest performer in Asia, rising 0.76% to KRW 1,508.51/US.Thailand’sbahtgained0.67. The Philippine peso advanced 0.35%, Singapore dollar rose 0.26%, Japan’s yen strengthened 0.21% to JPY 158.83/US, China’syuanincreased0.21, and Taiwan’s dollar appreciated 0.14%. Meanwhile, the US Dollar Index (DXY) fell 0.24% to 99 at the same time. This decline was a key factor driving the strengthening of most Asian currencies. The US dollar weakened in early Asian trading as hopes grew for a deal to reopen the Strait of Hormuz. This optimism also pushed oil prices below $100 per barrel. This eased some market concerns over global inflation risks. Previously, oil price surges due to US-Iran tensions had driven the US dollar higher, as markets feared rising inflation would make it difficult for the US Federal Reserve (Fed) to cut interest rates. However, pressure on the US dollar began to ease early this week. Expectations of the Strait of Hormuz reopening have lowered oil prices below $100 per barrel, alleviating inflation worries and reducing demand for the US dollar. Yet, US-Iran peace prospects remain fragile. US President Donald Trump wrote on Saturday that a memorandum of understanding regarding a peace deal with Iran had been largely negotiated. Both countries and mediators in Pakistan reported progress. However, Trump reiterated that the US blockade on Iranian vessels in the Strait of Hormuz remains fully in place until a deal is fully reached, certified, and signed. As of now, the Iranian government has not responded directly. For Asian currencies, the global weakening of the US dollar has provided significant room for appreciation, as evidenced by most regional currencies moving into positive territory this morning.