The U.S. dollar remained close to a one-week high on Friday as investors avoided making major moves ahead of Federal Reserve Chair Kevin Warsh’s closely watched speech at the Jackson Hole symposium.
The U.S. Dollar Index was little changed at around 99.16 by 03:00 ET (07:00 GMT). The index was also on course to post a weekly gain of approximately 0.4%.
Warsh’s Jackson Hole Speech in Focus
Investors are closely watching Warsh’s Jackson Hole remarks for fresh signals about the Federal Reserve’s monetary policy outlook.
Recent inflation data has kept expectations for further monetary tightening alive. As a result, traders are paying particular attention to any comments about future interest rate decisions.
Markets were pricing in roughly a 35% chance of a Federal Reserve rate hike in September. Meanwhile, the probability of a rate increase by December had climbed to around 75%, according to CME FedWatch.
Higher rate expectations have also helped keep U.S. Treasury yields elevated. In turn, this has limited the upside potential for several Asian currencies.
Korean Won Strengthens After Bank of Korea Rate Hike
The Korean won was one of the strongest performers in Asian currency markets.
USD/KRW fell around 0.7% to 1,371.60 won, reaching its lowest level since July 2025.
The move came as investors continued to assess the Bank of Korea’s decision to raise its benchmark interest rate by 25 basis points to 3% on Thursday.
This marked the central bank’s second consecutive rate increase and pushed borrowing costs to their highest level since February 2025.
Bank of Korea Governor Shin Hyun-song indicated that additional monetary tightening could still be considered. However, future rate increases are likely to be gradual as policymakers evaluate the impact of the latest moves on the economy.
Australian Dollar Hits Three-Month High
The Australian dollar also gained ground, with AUD/USD rising to a three-month high.
Stronger-than-expected Australian consumer inflation data released earlier this week increased expectations that the Reserve Bank of Australia could raise interest rates again before the end of the year.
The AUD/USD pair was also on track to record its fifth consecutive weekly gain, highlighting continued momentum in the Australian currency.
Japanese Yen and Indian Rupee Remain Stable
Elsewhere in Asian currency markets, the Japanese yen showed limited movement.
USD/JPY traded broadly unchanged near 159.40 yen. The pair was still on course for a weekly increase of approximately 0.3%.
The Indian rupee also remained relatively stable, with USD/INR trading largely unchanged.
Overall, currency markets remained cautious ahead of Warsh’s Jackson Hole speech, with investors looking for clearer guidance on the Federal Reserve’s next steps and the outlook for U.S. interest rates.
