Precise Investors Editorial Team
Commodity-linked currencies rose, with the Australian dollar’s AUD/USD and New Zealand dollar’s NZD/USD adding 0.2% each
Most Asian currencies strengthened against the U.S. dollar on Monday as easing tensions in the Middle East drove oil prices sharply lower, reducing demand for the dollar’s safe-haven appeal.
The yen gained, with the USD/JPY pair dropping 0.2% to nearly 163.6 yen.
Commodity-linked currencies rose, with the Australian dollar’s AUD/USD and New Zealand dollar’s NZD/USD adding 0.2% each.
Brent crude dropped more than 5% in Asian trade after U.S. paused its military campaign against Iran over the weekend, while Tehran said it would suspend retaliatory attacks as long as the U.S. refrained from further strikes.
The pause followed China-led diplomatic efforts to revive talks, easing fears of prolonged supply disruptions through the Middle East and lifting broader risk appetite.
Investors increasingly expect lower energy prices to reduce inflationary pressures that had recently fuelled expectations of tighter monetary policy.
Most currencies firmed. The offshore and onshore yuan strengthened nearly 0.2% each.
The Taiwan dollar’s USD/TWD and the Indian rupee’s USD/INR pair declined 0.2%.
The Singapore dollar’s USD/SGD traded largely flat, after the Monetary Authority of Singapore (MAS) said it would increase, by a very slight amount, the rate of appreciation of its Singapore dollar nominal effective exchange rate policy band, while leaving the width of the band and its midpoint unchanged.
Rupiah bucked the trend, weakening nearly 0.5% after Bank Indonesia Governor Perry Warjiyo unexpectedly resigned, raising renewed concerns about the central bank’s independence and the future direction of monetary policy.
Senior Deputy Governor Destry Damayanti was appointed interim governor, while analysts warned the leadership change could unsettle investors.
Attention will also shift to the Bank of Japan later this week after the yen posted its strongest one-day gain since July 10, with investors watching for signals that policymakers remain on track to continue normalising monetary policy as inflation pressures persist.
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