By Mehwish Nadeem
Growboo
SINGAPORE – Most Asian currencies slipped on Monday, giving back some of last week’s strong gains that came after U.S. Federal Reserve Chair Jerome Powell signaled a possible rate cut in September.
The U.S. Dollar Index inched up 0.1% in early European trade, rebounding slightly after falling nearly 1% to a four-week low on Friday following Powell’s dovish remarks.
Powell’s remarks lift hopes of September cut
Speaking at the Jackson Hole symposium, Powell acknowledged growing risks to the U.S. labor market, suggesting the Fed may need to adjust its policy stance. The comments boosted expectations of a quarter-point cut at the Fed’s September 16–17 meeting, with traders now pricing in more than an 85% chance of easing.
Analysts at ING noted, “As soon as FX traders saw the reference to ‘adjusting policy,’ the dollar dropped sharply, losing nearly 1% against several majors. Powell’s remarks reinforced the view that the Fed could move in September after all.”
Regional currencies retreat cautiously
On Monday, markets took a more measured approach. The Japanese yen strengthened 0.3% against the dollar, while the South Korean won edged 0.2% higher. Both currencies had rallied nearly 1% on Friday.
China’s onshore yuan (USD/CNY) slipped 0.1%, while the offshore pair (USD/CNH) also dipped by the same margin. The Australian dollar ticked up 0.1%, the Singapore dollar gained 0.1%, and Indonesia’s rupiah weakened 0.5%.
Elsewhere, the Indian rupee fell 0.2% amid renewed pressure from trade tensions. Washington is set to impose a 25% additional tariff on Indian goods from August 27, citing New Delhi’s rising purchases of Russian oil. Indian officials have expressed frustration, stressing that ongoing negotiations must balance international demands with the protection of farmers and small producers.
