Most Asian currencies showed little movement on Wednesday as investors waited for next week’s Federal Reserve meeting, where a potential rate cut is on the table. The Indian rupee, however, weakened further and fell to a new record low past 90 per U.S. dollar, pressured by ongoing capital outflows.
The U.S. Dollar Index slipped 0.2% in Asian trading. Dollar Index futures also traded 0.2% lower as of 06:32 GMT.
Indian rupee hits new record low
The USD/INR pair climbed to an all-time high of 90.32 early in the session. By 06:25 GMT, it traded 0.4% higher at 90.27.
The rupee faced several external pressures, including weaker trade flows, reduced portfolio investments, limited foreign direct investment, and uncertainty surrounding a potential U.S.–India trade agreement. These factors contributed to persistent demand for the dollar.
According to MUFG analysts, India continues to face a clear imbalance between dollar supply and demand. Higher import needs, a wider current account deficit, and soft foreign inflows remain key drivers behind the rupee’s weakness.
Asian currencies stay flat ahead of U.S. data
Across the region, most Asian currencies traded near flat levels. Markets are still pricing in the possibility of a Fed rate cut next week, which has kept sentiment cautious but relatively steady.
Investors now await important U.S. economic indicators. The ADP National Employment Report is due midweek, followed by the November Personal Consumption Expenditures (PCE) Price Index on Friday. Both reports are crucial for shaping the Fed’s policy outlook.
The Japanese yen saw mild strength, with USD/JPY down 0.2%. The South Korean won remained steady, with USD/KRW little changed. The onshore Chinese yuan slipped 0.1%, while the Singapore dollar traded flat.
Australian dollar rises on strong GDP data
In contrast to the rupee’s decline, the Australian dollar strengthened. The AUD/USD pair rose 0.3%, reaching a one-month high after the release of solid third-quarter GDP figures.
Australia’s economy grew 0.4% quarter-on-quarter, below expectations of 0.7%, but annual growth reached 2.1%, the strongest in two years.
Stronger economic momentum and renewed inflation pressure may push the Reserve Bank of Australia to keep interest rates steady for now.
