The US dollar remains steady in Asia

Calm waters for US dollar, G-10 currencies

Currency markets were relatively more sedate overnight than in previous sessions. Wall Street’s slightly positive close temporarily took the wind out of the greenback’s sails, with the flight to safety noticeably absent compared to the last session. The dollar index finished unchanged at 93.33, having probed higher to 95.60 overnight. Today in Asia, it is much the same, with currency markets moribund and the dollar index almost unchanged at 94.35.

That has left G-10 currencies treading water into the final day of the week. Euro, sterling and the Commonwealth’s holding their own, but only just off their recent lows. That suggests that the weaker side is still the downside for all of them, with today’s jump in the equity markets having little to no positive impact.

Asian currencies have edged higher though, albeit only modestly. With the PBOC content to let USD/CNY make time between 6.7500 and 6.8500 for now, regional currencies should continue to outperform vis-a-vis the developed market grouping. The stability overnight will be a sigh of relief for the beleaguered Indonesian rupiah. However, the extension of Jakarta lockdown measures overnight has seen USD/IDR edge back over 14,900.00. Further rises today will almost certainly see the Bank of Indonesia intervening again to defend 15,000.00.

The reluctance of currency markets to reverse US dollar strength overnight and this morning, even as stock markets outperform, suggests that more US dollar upside remains the path of least resistance.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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