Precise Investors Editorial Team
The won’s USD/KRW pair edged up 0.2%, while the yen’s USD/JPY pair ticked up 0.1%
Most Asian currencies were little changed on Thursday after sharp gains in the previous session, as investors turned cautious over the durability of a temporary U.S.-Iran ceasefire amid renewed Middle East tensions.
The ceasefire had initially boosted risk appetite and weighed on the dollar, lifting higher-yielding Asian currencies. But uncertainty over its scope and continued military activity has clouded the outlook.
We continue to think that given the big gaps in expectation between different parties and not just the US, the chance of a durable ceasefire and agreement remains very narrow, and as such the risk of a flare up and continued volatility is very substantial, MUFG analysts said in a note.
The won’s USD/KRW pair edged up 0.2% after sliding 1.2% in the previous session.
The yen’s USD/JPY pair ticked up 0.1% after dropping 0.7% on Wednesday.
Oil prices bounced back more than 2% after a sharp decline in the prior session, as concerns persisted over disruptions to supply through the Strait of Hormuz.
Higher crude prices tend to pressure oil-importing Asian economies and their currencies.
The Indian rupee’s USDINR gained 0.3%. The currency firmed 0.5% against the dollar on Wednesday after the Reserve Bank of India kept its key policy rate unchanged.
The RBI reiterated its commitment to curb excessive volatility in the rupee, and described recent FX measures as temporary.
The yuan’s onshore USD/CNY pair edged up 0.1%, after hitting a three-year low in the previous session.
The Australian dollar’s AUD/USD pair and the Singapore dollar’s USD/SGD pair traded flat.
Elsewhere, the US Dollar Index slipped 0.1% after dropping to a four-week low on Wednesday. US Dollar Index Futures also traded 0.1% lower as of 04:09 GMT.
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