Most Asian currencies edged lower on Tuesday as traders awaited key U.S. jobs data later this week to confirm bets on a Federal Reserve rate cut this month, while the Indian rupee traded near record lows amid increased U.S. tariff pressures.
As of 02:50 GMT, the US Dollar Index, which measures the greenback against a basket of major currencies, traded 0.1% higher in Asia hours, but remained weak after a monthly decline.
US jobs data looms large
Market participants await Friday’s nonfarm payrolls report for August, which will be crucial to cement bets for a Federal Reserve rate cut this month.
Traders see an 87% chance that the Fed will lower its benchmark rate by 25 basis points at the Sept. 16-17 meeting, according to CME FedWatch data.
Expectations were reinforced after Fed Chair Jerome Powell said at the Jackson Hole conference that policymakers were prepared to adjust policy if inflation continued to moderate and the labor market showed signs of cooling.
“Recall it was the July jobs report – and especially the 258,000 or downwards back month revisions – which reversed the July rally in the dollar and was the catalyst for Fed Chair Jerome Powell opening the door to a September rate cut,” ING analysts said in a note.
“Once again, expect a lot of focus on the back-month revisions, given that only 60% of survey respondents are answering within the first month. Currently, consensus sits at a fairly soft +75k for Friday’s number, and sees the unemployment rate ticking up to 4.3% from 4.2%,” they added.
Asia FX dips amid tariff uncertainty; Indian rupee near record low
A U.S. appeals court last week ruled that most of President Donald Trump’s sweeping tariffs are illegal, significantly undermining his economic policy tool of using levies for international negotiations.
The court kept the tariffs in place until Oct. 14 to allow the Trump administration time to appeal to the U.S. Supreme Court.
The Japanese yen’s USD/JPY pair rose 0.3%, while the Singapore dollar’s USD/SGD inched up 0.1%.
In China, both the yuan’s onshore USD/CNY and offshore pairs USD/CNH ticked 0.1% higher.
The South Korean won’s USD/KRW inched down 0.1% after subdued August inflation print supported calls for a Bank of Korea rate cut in October.
The Indian rupee’s USD/INR gained 0.2% to 88.147 rupees on Tuesday, hovering near the record high of 88.34 rupees reached in the previous session.
The U.S. has imposed an additional 25% penalty tariff on Indian goods, bringing total duties to 50% from August 27, in response to India’s purchase of Russian oil.
Elsewhere, the Australian dollar’s AUD/USD pair edged 0.1% lower.
Source :
https://www.investing.com/news/forex-news/asia-fx-ticks-down-amid-fed-caution-tariff-uncertainty-rupee-near-record-low-4218352
