Asian Currencies and Dollar Trade Steady Ahead of Powell Speech
Asian currencies and the U.S. dollar moved in tight ranges on Tuesday as investors awaited comments from Federal Reserve Chair Jerome Powell. His speech later today follows last week’s rate cut and signals of more reductions ahead.
Dollar Index Holds Steady
The U.S. Dollar Index (DXY), which tracks the greenback against major peers, was flat after sliding in the previous session.
Last week, the Fed cut interest rates by 25 basis points to a range of 4.00–4.25%, marking the first reduction since December. Policymakers’ dot-plot projections showed expectations for two more cuts before year-end.
Fed Outlook in Focus
Fed Governor Stephen Miran warned on Monday that current policy remains restrictive and highlighted risks to the labor market. He had voted for a 50 bps cut at last week’s meeting.
Analysts at ING noted that markets are watching whether Powell’s cautious tone on rate cuts reflects the broader sentiment of the FOMC.
Investors are also eyeing Friday’s release of U.S. core PCE inflation data, the Fed’s preferred gauge. ING expects a 0.2% monthly increase, reinforcing expectations for more rate cuts this year.
Asian FX Rangebound
Across Asia, currency moves were muted amid a light economic calendar.
- USD/JPY traded flat, while USD/SGD edged 0.1% higher.
- USD/KRW gained 0.3%, and USD/INR rose 0.2%.
- AUD/USD slipped 0.2% after a private survey showed slowing business activity in Australia, pressured by U.S. tariffs.
- In China, both USD/CNY and USD/CNH traded unchanged after the central bank kept key lending rates near record lows.
