Asian currencies slipped on Wednesday, with the South Korean won and the Australian dollar leading the declines. Investors remained cautious ahead of the delayed U.S. jobs report and continued uncertainty over the Federal Reserve’s interest rate outlook.
The U.S. Dollar Index rose 0.1%, while dollar index futures also gained 0.1% as of 04:26 GMT.
U.S. jobs data in focus as markets assess Fed direction
The September non-farm payrolls report, postponed due to the recent U.S. government shutdown, is set for release on Thursday. Traders are watching closely for signs of labor market strength and wage trends. A weaker reading could increase expectations of a potential Fed rate cut.
Federal Reserve officials have recently expressed caution about further rate reductions. Inflation remains elevated, and economic growth has held steady. As a result, markets are pricing in only a modest chance of a 25 basis-point cut in December.
This cautious stance has kept the U.S. dollar supported, putting pressure on Asian currencies.
Adding to the uncertainty, President Donald Trump said he has chosen his preferred candidate for the next Federal Reserve chair and may announce the decision soon. Current chair Jerome Powell’s term runs through May 2026, and speculation about a new nominee has raised concerns about central bank independence.
In Asia, the South Korean won weakened, with USD/KRW up 0.6%. The Singapore dollar slipped, with USD/SGD up 0.1%, while the Indian rupee edged lower, with USD/INR up 0.1%.
In China, the onshore yuan (USD/CNY) was steady, while the offshore yuan (USD/CNH) increased 0.1%.
Yen stabilizes after hitting a nine-month low
In Japan, long-term government bond yields jumped to multi-decade highs as investors questioned the sustainability of the country’s expansionary fiscal strategy. Yields on 10-year and 20-year bonds rose sharply.
The yen steadied after hitting a nine-month low in the previous session, with USD/JPY down 0.1% at 155.40.
The Australian dollar declined, with AUD/USD falling 0.4%. The drop came even as third-quarter wage growth held steady, reinforcing expectations that the Reserve Bank of Australia will keep interest rates unchanged.
