Precise Investors Editorial Team
Brent crude surged, renewing concerns that a broader regional war could disrupt energy supplies
Asian currencies traded in narrow ranges on Monday as investors balanced renewed safe-haven demand for the U.S. dollar following an escalation in Middle East tensions against lower Treasury yields and expectations that the U.S. central bank will keep interest rates on hold later this month.
Japan’s financial markets were closed for Marine Day, leaving the yen trading in thin holiday conditions, while attention turned to a busy week of central bank meetings and economic data across Asia.
Brent crude surged after Iran and U.S. continued to strike each other, renewing concerns that a broader regional war could disrupt energy supplies and complicate the international inflation outlook.
The USD/JPY pair was little changed at 162.36 yen in holiday-thinned trading, leaving the Japanese currency near its four-decade low as wide U.S.-Japan interest-rate differentials continued to weigh on sentiment.
The USD/CNY pair was little changed at 6.7719, while the offshore USD/CNH pair hovered near 6.7726 after China kept benchmark lending rates unchanged.
The decision followed last week’s weaker-than-expected second-quarter GDP data and reinforced expectations that Beijing will continue to rely on targeted fiscal support rather than broad monetary easing.
The USD/KRW pair dropped 0.3% to 1,482.76, with the won outperforming peers after South Korea unveiled on Sunday its most ambitious foreign-exchange liberalisation measures to date.
Under the reforms, foreign investors will be allowed from January 2027 to trade and transfer won through pre-registered overseas institutions without opening domestic won accounts, while settlements will be processed through a new 24-hour Bank of Korea network. The measures build on the launch of round-the-clock won trading earlier this month and are aimed at increasing the currency’s international use and attracting foreign capital.
The USD/AUD pair declined by 0.1% to A$0.6990 as the Australian dollar recovered modestly, while the USD/MYR pair and the USD/SGD pair eased 0.1%. Taiwan’s dollar also outperformed modestly, with the USD/TWD pair advancing 0.1%.
Attention will shift to Bank Indonesia’s policy decision on Wednesday, while South Korea’s second-quarter GDP and Singapore inflation data later in the week will offer new clues on economic momentum.
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