The Thai baht weakened to 31.88 per dollar on Thursday but was still up about 8% this year, the second-best performer in Asia after the Taiwan dollar. Its rapid appreciation has raised concerns for exports and tourism, key pillars of Thailand’s economy. Incoming Finance Minister Ekniti Nitithanprapas said the government will work with the Bank of Thailand to manage the local currency after it hit a four-year high, noting that capital inflows and gold trading will be monitored for irregularities. He added he had discussed stabilization with Vitai Ratanakorn, who will become central bank governor on October 1. Ekniti also flagged potential probes into unusual flows, while Deputy Minister Vorapak Tanyawong warned the baht could climb further on foreign demand for bonds and equities. Earlier this week, the central bank said it may introduce a tax on gold trading. From January to July, Thailand’s gold exports surged 82% to USD 7.6 billion, including USD 2.1 billion to Cambodia.

Thai Baht Retreats from 4-Year High as Officials Mull Steps

The Indonesian rupiah weakened around 16,500 per dollar on Thursday after Bank Indonesia (BI) unexpectedly cut its key rates by 25bps to 4.75%. It was the sixth reduction since September 2024, lowering borrowing costs by a total of 150bps to the lowest level since late 2022. Governor Perry Warjiyo said the central bank will continue to assess the scope for further cuts while balancing currency stability and economic growth. The rupiah has fallen about 2% against the US dollar this year, weighed by concerns over domestic finances, two weeks of protests since late August, and last week’s dismissal of finance minister Sri Mulyani Indrawati. Questions also remain over the central bank’s independence following a “burden sharing” program to help fund government spending. Elsewhere, the US dollar index hovered above 97 after rebounding in the previous session, as investors reassessed the Fed’s outlook following a 25bps rate cut and guidance for two more reductions this year and one in 2026.

Rupiah Slips After Surprise BI Rate Cut

The Australian dollar traded around $0.665 on Thursday, holding its losses from the previous session, as markets digested a softer-than-expected domestic jobs report. Data showed net employment fell by 5,400 in August against forecasts for a 21,500 gain, driven by a sharp drop of 40,900 full-time positions. The unemployment rate held steady at 4.2% while the participation rate edged lower to 66.8%, signaling a gradually softening labor market. Despite the weak print, markets imply only a 20% chance of a rate cut by the Reserve Bank of Australia at the September 30 meeting, with expectations rising to 70% for November, as inflation remains above target and policymakers signal caution. Meanwhile, in the US, the Federal Reserve delivered a widely expected quarter-point cut and signaled two more this year but only one in 2026. Fed Chair Jerome Powell stressed a cautious ‘risk management’ approach and no rush to ease further.

Aussie Dollar Holds Decline After Softer Jobs Data

The South Korean won slipped to around 1,383 per dollar on Thursday, erasing earlier gains as caution returned following the conclusion of the Federal Reserve’s policy meeting. The Fed cut its benchmark rate to 4.00–4.25%, its first reduction since December, and signaled two more cuts this year. While the move initially weakened the dollar and boosted Asian currencies, Chair Jerome Powell’s warning of a “challenging” outlook tempered sentiment. With the US–South Korea rate gap still at 1.75 percentage points, downside pressure on the won remains, heightening the risk of capital outflows. Adding to the pressure, minutes from the Bank of Korea’s meeting showed most board members backing further rate cuts to counter US tariff headwinds, though debt risks limited action. The board voted 6–1 to hold rates at 2.50%, but its lean toward looser policy reinforced expectations for easing ahead.

South Korean Won Slips on US–Korea Rate Gap

The New Zealand dollar fell to $0.591 on Thursday, extending losses from the previous session after weaker-than-expected GDP figures fueled bets on interest rate cuts. New Zealand’s economy shrank 0.9% in the three months through June, worse than the forecasted 0.3% contraction, following a revised 0.9% growth in the first quarter. Annual GDP decreased 0.6%, compared with expectations for no change. The downturn was broad-based, with the construction sector remaining in decline and manufacturing hit by slowing goods exports, amid pressure from US tariffs. Markets now imply about 58 basis points of rate cuts by the Reserve Bank of New Zealand, up from 48bps before the GDP data was released, and assign a 20% probability of a larger 50 basis point cut at the October meeting. Meanwhile, in the US, the Federal Reserve cut interest rates as widely expected but signaled a measured approach to further monetary policy easing.

New Zealand Dollar Drops After Weak GDP Report

The offshore yuan weakened to around 7.10 per dollar on Thursday, snapping a three-day winning streak and after touching a more than ten-month high in the previous session. The decline followed a rebound in the US dollar, as investors reassessed the Fed’s cautious stance on future rate cuts. While the Fed delivered a widely expected 25 basis point cut on Wednesday, Fed Chair Jerome Powell’s comments—describing it as a “risk-management” measure in response to a softening labor market—dampened expectations for aggressive easing, lifting the dollar. In China, Vice President Han Zheng announced plans to upgrade the free trade agreement with ASEAN amid ongoing trade tensions with the US. Speaking at the China-ASEAN Expo in Nanning, he emphasized deeper cooperation with the 10-member bloc. On the economic front, fiscal revenue increased by 0.3% year-on-year in the first eight months of 2025, slightly up from a 0.1% rise in the January–July period, according to the Finance Ministry.

Offshore Yuan Snaps 3-Session Gains

The yen slipped past 147 per dollar on Thursday, retreating from a two-month high hit in the prior session as the dollar strengthened after the Federal Reserve’s latest policy decision. On Wednesday, the Fed delivered a widely expected quarter-point cut, while signaling two more reductions this year but only one in 2026, pushing back against expectations for two or three cuts next year. Domestically, the Bank of Japan began its two-day policy meeting, where rates are expected to be kept unchanged as officials assess the impact of US tariffs on Japan’s export-driven economy. Still, analysts noted the BOJ could raise rates by 25 basis points in October amid signs of resilience. Politically, the ruling Liberal Democratic Party will choose a new leader on October 4 to succeed outgoing Prime Minister Shigeru Ishiba.

Japanese Yen Weakens as Dollar Rebounds

The dollar index hovered above 97 on Thursday after rebounding sharply in the prior session, as investors reassessed the Federal Reserve’s policy outlook. On Wednesday, the Fed delivered a widely expected quarter-point rate cut, while signaling two more reductions this year but only one in 2026, pushing back against market expectations for two or three cuts next year. Chair Jerome Powell struck a cautious tone, framing the move as “risk management” amid labor market weakness, while stressing there is no need to rush easing. Notably, newly appointed Governor Stephen Miran was the sole dissenter, backing a larger 50 bps cut, resulting in fewer splits than anticipated. Elsewhere, the Bank of Canada also trimmed rates by 25 bps, while the Bank of England and Bank of Japan are expected to keep policy unchanged this week.

Dollar Holds Firm as Fed Outlook Weighed

The Brazilian real traded around 5.3 per US dollar in September, highest level since June 2024, as investors reacted to the latest US Federal Reserve and Brazilian Central Bank decisions. The Federal Reserve cut interest rates by 25 basis points, with Chair Powell describing the move as a “risk management” adjustment rather than the start of a new easing cycle, noting that risks of higher and more persistent inflation have eased since April. Only newly appointed Fed Governor Stephen Miran voted for a larger 50 basis point cut, resulting in fewer dissents than markets had expected. Domestically, the Central Bank of Brazil maintained the Selic rate at 15%, signaling a continued hawkish stance to control inflation. Recent data show moderation in economic growth while inflation remains contained, allowing the central bank to sustain a tight policy.

Brazilian Real Hover at Mid-2024 After Copom

The Australian dollar inched down to $0.667 ahead of Thursday's session from the 11-month high of $0.67 touched earlier in the week after the Fed cut its rates by 25bps, but the greenback refrained from depreciating as projections of strong inflation prevented sharper bets of loosening by the FOMC. Domestically, the jobs report is expected to show 20K–25K new positions with unemployment steady at 4.2%, a key input for the RBA’s policy path. Markets now assign minimal odds to a September cut, with November easing bets trimmed to 70% on the back of solid recent data. On the geopolitical front, the US and China, Australia's top trading partners, reached a deal to place TikTok under US ownership, with final approval expected in a Friday call between Presidents Trump and Xi.

Australian Dollar Eases from 11-Month High

The Japanese yen traded around 146.5 per dollar ahead of Thursday's session, near its strongest almost two months after the Fed cut its rates and signaled further monetary easing for this year. Domestically, forex inflows lacked a boost from goods trade as exports fell 0.1% in August, less than expected but still the fourth consecutive monthly decline, led by a 13.8% drop in shipments to the US. Imports contracted 5.2%, moderating from July’s 7.4% slide yet surpassing the 4.1% decline forecast by analysts. On monetary policy, the Bank of Japan is expected to keep rates steady at 0.5% on Friday as policymakers weigh domestic and external risks, including tariffs. Still, steady inflation maintained lingering bets that the BoJ could still tighten policy this year.

Japanese Yen Hovers Near 2-Month High

The euro traded around $1.18, slightly below the four-year highs reached earlier in the week, as the dollar firmed following the Fed’s policy decision. The Fed cut the funds rate by 25 bps, as expected, and signaled an additional 50 bps of reductions by year-end. However, Chair Powell emphasized that the move was a ‘risk management’ cut rather than the start of a new easing cycle. In Europe, the ECB left rates unchanged for a second consecutive meeting last week, suggesting its rate-cutting cycle may be over. Policymakers continued to stress caution: Executive board member Isabel Schnabel urged policymakers to “keep a steady hand,” citing risks from tariffs, services inflation, food prices, and fiscal policy. Slovak central bank governor Peter Kazimir echoed the warning, saying it would be “a mistake” to downplay these risks. Inflation in the Euro Area eased to 2.0% in August 2025, slightly below the preliminary estimate of 2.1%.

Euro Down from Recent Highs

The Brazilian real hovered around 5.3 per US dollar in September, its strongest level since June 2024, as investors digested the latest US Federal Reserve decision while awaiting the Brazilian Central Bank’s announcement. The Federal Reserve cut interest rates by 25 basis points in September 2025, with Chair Powell noting that risks of higher and more persistent inflation have eased since April, framing the move as a ‘risk management’ cut rather than the start of a new easing cycle. Only newly appointed Governor Stephen Miran voted for a larger 50 basis point reduction, resulting in fewer dissents than markets had anticipated. Domestically, the Central Bank of Brazil is expected to maintain the Selic rate at 15% and signaled persistence in its hawkish stance to control inflation. Recent data show moderation in economic growth while inflation remains contained, giving the central bank room to sustain a tight policy even as external conditions improve.

Brazilian Real at Strongest Level Since Mid-2024

The dollar index initially fell to its lowest level since 2022 before recovering to trade higher at 96.8 on Wednesday, as traders digested the latest FOMC decision. The Fed cut the funds rate by 25 bps, as expected—the first reduction in borrowing costs this year—while signaling an additional 50 bps of cuts before year-end, slightly more than projected in June. At the press conference however, Chair Powell noted that risks of higher and more persistent inflation have eased since April, framing today’s move as a ‘risk management’ cut rather than the start of a new easing cycle. Meanwhile, only newly appointed Governor Stephen Miran voted for a larger 50 bps cut, resulting in fewer dissents than markets had anticipated.

Dollar Rebounds as Traders Assess FOMC, Chair Powell Comments

The Mexican peso strengthened toward 18.25 per US dollar, its strongest level since July 2024, driven by a weakening US dollar, now at its lowest since early 2022, after the Fed’s September 2025 decision to cut the federal funds rate by 25 basis points and signal two further reductions before year-end. The Fed’s projections showed slightly higher GDP growth, lower unemployment, and modestly higher inflation next year, reducing the need for aggressive tightening.  At the same time, Banco de México has maintained a tight policy stance and signaled careful calibration as inflation moderates. Higher real interest differentials, sustained carry demand in forward markets, and close trade links with the United States have further supported demand for local assets and limited capital outflows.

Mexican Peso Strengthens on Softer USD

The dollar index weakened to 96.4 on Wednesday, the lowest level since February 2022, as traders react to the latest FOMC decision. The Fed lowered the fed funds rate by 25bps as expected, the first reduction in borrowing costs this year, while signalling additional 50bps of cuts before the year's end, slightly more than projected in June. Policymakers also noticed that job gains have slowed, and the unemployment rate has edged up but remains low. This is being read as more dovish. Meanwhile, only newly appointed Governor Stephen Miran voted in favor of a larger 50 bps cut, marking fewer dissents than markets had anticipated.

Dollar Falls to 2022-Lows after Fed Decision

The Canadian Dollar touched 1.37 against the USD, the highest since August 2025. Over the past 4 weeks, US Dollar Canadian Dollar lost 0.55%, and in the last 12 months, it increased 0.87%.

Canadian Dollar Hits 5-week High

The Canadian dollar weakened past 1.375 per US dollar in September after the Bank of Canada cut its policy rate by 25 basis points to 2.5% and signalled a durable easing campaign. The move reflected a sharper slowdown in activity than earlier anticipated, including a 1.6% contraction in second quarter GDP and a 27% collapse in exports. Labour market deterioration reinforced the case for easier policy, with net job losses and unemployment rising to 7.1% in August, which reduced wage pressures and removed urgency from the inflation narrative. Consumption and housing remain relatively resilient, but the Governing Council warned that trade barriers and slowing population growth will gradually weigh on private spending and the labour market. With headline inflation at about 1.9% markets judged that there was room to loosen policy without jeopardising the 2% target.

Canadian Dollar Gives Up Montly Highs

The South African rand drifted toward 17.4 per USD, down from recent ten-month highs of 17.3, pressured by softer precious metal prices despite a subdued dollar. Market attention is on central bank decisions this week, particularly from the Federal Reserve and the South African Reserve Bank. The US central bank is widely expected to resume its easing cycle today with a 25-basis-point rate cut, with further cuts likely to follow. In South Africa, August inflation came in at 3.3%, within the Reserve Bank’s target range of 3%-6%, yet the MPC is expected to maintain a hawkish tone.

South African Rand Weakens Slightly

The euro stabilized just above $1.18, holding close to its strongest level since September 2021, as investors awaited the US Federal Reserve’s policy announcement and updated economic projections due later today. Markets broadly expect the Fed to cut rates by at least 25 basis points and signal further easing, as policymakers weigh a cooling labor market against lingering tariff-driven inflationary pressures. European officials, by contrast, continue to stress caution. ECB executive board member Isabel Schnabel urged policymakers to “keep a steady hand,” citing risks from tariffs, services inflation, food prices, and fiscal policy. Slovak central bank governor Peter Kazimir echoed the warning, saying it would be “a mistake” to downplay these risks. The ECB last week kept borrowing costs unchanged for a second straight meeting, signaling its rate-cutting cycle may be over.

Euro Steadies Near 2021 Highs as Fed Decision Looms

The British pound held above $1.363, close to its highest in over ten weeks, as traders awaited key central bank decisions. The Bank of England is expected to leave rates at 4% on Thursday while slowing its £100 billion annual bond unwind. The latest data showed that UK inflation remained at 3.8% in August, as expected and matching the 18-month high recorded in July. Additionally, job data showed steady unemployment at 4.7%, wage growth of 4.8% excluding bonuses (4.7% including bonuses), and a slight payroll decline of 8,000, all broadly in line with forecasts. BoE rate-cut bets were little changed, with markets pricing only a one-in-three chance of a move by December. Meanwhile, the US Federal Reserve is widely expected to cut rates by 25 bps today, with traders anticipating at least two more reductions by the end of 2025.

Sterling Holds Near 10-Week High

The New Zealand dollar edged down to $0.597 on Wednesday, halting a two-day advance as traders turned cautious ahead of Thursday’s GDP release. The economy is expected to contract by 0.3% in the June quarter, reinforcing the Reserve Bank of New Zealand’s dovish outlook. Last week, RBNZ Governor Christian Hawkesby reiterated the central bank’s projection for its official cash rate to fall by a total of 50bps by year end, noting the pace of easing would depend on data. Markets currently price in a 25bps rate cut at the October meeting, with rates expected to trend lower toward 2.50% by early 2026. However, losses in the kiwi were cushioned by weakness in the US dollar, as investors anticipate the Federal Reserve will slash rates by 25bps at the conclusion of its two-day policy meeting later today.

New Zealand Dollar Ticks Down Ahead of GDP Data

The South Korean won rose at around 1,380 per dollar on Wednesday, the highest level in about a month as the dollar retreated ahead of the Federal Reserve’s policy decision at the conclusion of its two-day meeting. While a 25-basis-point rate cut is fully priced in, investor attention has shifted to the Fed’s forward guidance and the pace of its easing cycle. On the domestic front, the won drew support from strong trade data as South Korea’s auto exports jumped 8.6% in August to $5.5 billion, a record for the month, driven by robust EV demand in Europe despite US tariffs. Export volumes rose 5.5% to 200,317 units, while cumulative shipments from January to August hit a record $47.7 billion.

South Korean Won Rises on Softer Dollar, Stronger Auto Exports

The Australian Dollar edged lower to around $0.668 on Wednesday, but traded near its highest level since early November last year, as markets monitored the highly anticipated US Fed’s key policy decision. The US dollar continued to struggle as markets fully priced in a quarter-point rate cut by the Federal Reserve this week. However, the bigger focus will be the Fed’s updated dot plot, which could signal how many more cuts may follow amid weak jobs data, sticky inflation, and political pressure. At home, investors await Thursday’s jobs report, expected to show 20K–25K new positions with unemployment steady at 4.2%, a key input for the RBA’s policy path. Markets now assign minimal odds to a September cut, with November easing bets trimmed to 70% on the back of solid recent data. On the geopolitical front, the US and China, Australia's top trading partners, reached a deal to place TikTok under US ownership, with final approval expected in a Friday call between Presidents Trump and Xi.

Aussie Dollar Trades Near 10-Month Peak

The Japanese yen slipped to around 146.6 per dollar on Wednesday after soft trade data reignited concerns over Japan’s export-reliant economy. Exports fell 0.1% in August, less than expected but still the fourth consecutive monthly decline, led by a 13.8% drop in shipments to the US. Imports contracted 5.2%, moderating from July’s 7.4% slide yet surpassing the 4.1% decline forecast by analysts. On monetary policy, the Bank of Japan is expected to keep rates steady at 0.5% as policymakers weigh domestic and external risks, including tariffs. Still, the yen hovered near two-month highs as the dollar softened ahead of the Federal Reserve’s policy decision. The Fed is widely expected to deliver a quarter-point cut later today, with markets pricing in about 67 basis points of easing by year-end.

Japanese Yen Eases Amid Soft Trade Data

The dollar index held around 96.7 on Wednesday, hovering at 2-½-month lows and down about 1% so far this week, as investors geared up for the upcoming Federal Reserve monetary policy decision. The Fed is widely expected to deliver a quarter-point rate cut later in the day, with markets pricing in roughly 67 basis points of total easing by year-end. Those expectations have been underpinned by data showing a cooling labor market, even as inflation remains above the Fed’s 2% target. Investors will also scrutinize the central bank’s quarterly “dot plot” projections for signals on the rate path. On the data front, US retail sales rose in August for a third straight month, posting a broad-based gain that capped a resilient summer of consumer spending. The dollar slipped across major peers, touching a four-year low against the euro.

Dollar Languishes Ahead of Fed Decision

The Japanese Yen touched 146.30 against the USD, the highest since August 2025. Over the past 4 weeks, US Dollar Japanese Yen lost 1.08%, and in the last 12 months, it increased 3.05%.

Japanese Yen Hits 4-week High

The Swiss Franc touched 0.79 against the USD, the highest since January 2015. Over the past 4 weeks, US Dollar Swiss Franc lost 2.53%, and in the last 12 months, it decreased 7.01%.

Swiss Franc Hits 10-year High

EURUSD increased to 1.18, the highest since September 2021. Over the past 4 weeks, Euro US Dollar gained 1.51%, and in the last 12 months, it increased 6.49%.

Euro Hits 4-year High

The Danish Krone touched 6.30 against the USD, the highest since September 2021. Over the past 4 weeks, US Dollar Danish Krone lost 1.46%, and in the last 12 months, it decreased 6.04%.

Danish Krone Hits 4-year High

The Canadian dollar strengthened past 1.38 per US dollar in September, climbing to monthly highs after domestic data reinforced expectations that the Bank of Canada will be cautious about cutting rates. Headline CPI rose 1.9% year-on-year in August—below the 2.0% consensus—but core gauges, notably the trimmed-mean and median, remain close to 3.0%, signaling persistent underlying inflation once volatile items are excluded. Those readings, together with signs of continued economic resilience, imply the BoC can keep policy restrictive for longer and have trimmed the likelihood of a rapid easing cycle; markets now price only a modest 25-basis-point cut at the next meeting rather than a more aggressive path. At the same time, a softer US dollar, driven by Federal Reserve pricing for an imminent 25-basis-point move and further easing this year, has reduced external pressure on the Canadian dollar.

Canadian Dollar Rises to Monthly High

The Swedish Krona touched 9.23 against the USD, the highest since March 2022. Over the past 4 weeks, US Dollar Swedish Krona lost 3.37%, and in the last 12 months, it decreased 9.26%.

Swedish Krona Hits 3-1/2-year High

The Serbian Dinar touched 99.01 against the USD, the highest since September 2021. Over the past 4 weeks, US Dollar Serbian Dinar lost 1.38%, and in the last 12 months, it decreased 5.88%.

Serbian Dinar Hits 4-year High

The Brazilian real strengthened toward 5.3 per US dollar in September, the strongest since June 2024, as the Brazilian labor market showed record strength providing room for restrictive monetary policy, while the US dollar dropped to multi-month lows. Unemployment was 5.6% in the July moving quarter, marking the lowest level since the series began in 2012, with the unemployed population near 6.1 million and employment at a record 102.4 million. The inflation was 5.13% year-on-year in August, a downside surprise that helped shave the inflation risk premium from long-term yields, while the Selic remained at 15%, preserving favorable real interest differentials versus major peers. At the same time the US dollar slipped to a more-than-two-month low as markets priced roughly a 25 basis-point cut at the Federal Reserve’s meeting this week and further easing for the rest of the year, further reducing external pressure on the real.

Brazilian Real at Over 1-Year High

The dollar index fell toward 97 on Tuesday, hitting an over two-month low as the Federal Reserve begins its two-day policy meeting later today. Markets are almost fully priced for a 25 basis point cut this week, with a total of 67 bps of easing expected by year-end. Expectations have been reinforced by recent data pointing to a cooling labor market and subdued inflation despite tariffs. President Donald Trump also urged Fed Chair Jerome Powell to deliver a larger cut, citing weakness in housing. In terms of data, US retail sales climbed in August for the third consecutive month, marking a broad-based increase that capped off a resilient summer of consumer spending. On trade, Trump said Monday that US-China negotiations in Spain were progressing well, with Trump and Chinese President Xi Jinping set to speak on Friday to finalize terms.

DXY Falls to Over 2-Month Low

The Indian rupee remained weaker than 88 per USD, continuously resting record lows of 88.4 since the start of September on the outlook of limited foreign exchange inflows and a dovish RBI. The US maintained its 50% tariff on India and threatened to double the current rate, pleading G7 countries to join, as India continued to import oil and fuels from Russia. This was after PM Modi pushed back and stated that Indian firms buy the most favorable energy in an uncertain economic backdrop. On the monetary policy front, consumer inflation was at 2.1% in August, remaining close to the lower bound of the RBI's inflation tolerance band of 2%. The central bank held rates unchanged in its August meeting and is largely expected to hold on their upcoming October meeting, but the softer inflationary backdrop and growth concerns stemmed from trade restrictions supported the case for another cut this year or next.

Indian Rupee Holds Near Record High

The Swiss franc firmed to around 0.79 per USD, its highest level since July 1st, amid a weaker dollar as speculation about a “dovish cut” by the Fed increases. Traders are pricing in a near-certain 25-bps rate cut, and expect the central bank to continue lowering rates. Persistent political and fiscal concerns in France and Japan, along with geopolitical tensions, also underpin safe-haven demand for the franc. In the Swiss economy, the latest figures confirmed a persistent disinflationary trend. Producer and import prices declined again in August, down 1.8% year-on-year and 0.6% month-on-month. Meanwhile, Swiss CPI rose 0.2% in August as expected, marking the third straight month of positive inflation and remaining within the SNB’s 0%-2% target range. Despite subdued inflation, SNB Chairman Martin Schlegel recently noted the risks of negative rates for savers and pension funds, signaling the bank’s reluctance to cut below zero.

Swiss Franc at Over 1-Month High

The euro climbed above $1.18 for the first time since July, hovering at its strongest level since September 2021, supported by stronger-than-expected investor sentiment in both the Eurozone and Germany, alongside broad dollar weakness as the US Fed prepares to resume interest rate cuts this week. Markets broadly expect the Fed to lower rates by at least 25 bps as policymakers weigh a cooling labor market against lingering inflationary pressures from tariffs. In contrast, European officials continue to emphasize caution on inflation. ECB Executive Board member Isabel Schnabel urged policymakers to “keep a steady hand,” warning that risks ranging from tariffs and services inflation to food prices and fiscal policy remain significant. Slovak central-bank Governor Peter Kazimir echoed that view, cautioning that ignoring these risks “would be a mistake.” The ECB last week kept borrowing costs unchanged for a second consecutive meeting, signaling that its rate-cutting cycle may have ended.

Euro Hits Four-Year High

The British pound rose past $1.363, the highest since early July, as markets awaited a busy week of central bank decisions and UK data. The Bank of England is expected to hold rates at 4% on Thursday while slowing its £100 billion annual bond unwind. UK inflation for August, due Wednesday, is forecast at 3.8% y/y, matching July’s 18-month high, with retail sales to follow later. Latest jobs data showed wage growth excluding bonuses at 4.8% and 4.7% including bonuses, unemployment steady at 4.7%, and payrolls down 8,000, all in line with expectations. The figures indicate a gradually slowing labor market, leaving BoE rate-cut bets largely unchanged, with markets seeing only a one-in-three chance of a cut by December. Meanwhile, the US Federal Reserve is widely expected to deliver a 25 bp rate cut on Wednesday, with traders pricing in at least two more reductions by the end of 2025.

Sterling Rises to 10-Week High

The euro climbed toward $1.18, its strongest level since early July, buoyed by broad dollar weakness as the US Federal Reserve prepares to resume interest rate cuts this week. Markets widely expect the Fed to lower rates by at least 25 basis points on Wednesday, with policymakers weighing a cooling labor market against lingering inflationary pressures from tariffs. In Europe, officials continue to stress vigilance on inflation. ECB Executive Board member Isabel Schnabel said monetary policy should “keep a steady hand,” warning that upside risks—ranging from tariffs and services inflation to food prices and fiscal policy—remain significant. Slovak central-bank Governor Peter Kazimir echoed the concern, cautioning that overlooking these risks “would be a mistake.” The ECB last week kept borrowing costs unchanged for a second straight meeting, signaling that its rate-cutting cycle may have come to an end.

Euro Hits Two-Month High as Fed Eyes Rate Cut

The Indonesian rupiah strengthened to around 16,370 per dollar on Tuesday, rebounding from 16,415 in the prior session. The recovery followed the government’s announcement of a new IDR 16.2 trillion stimulus package to be implemented in Q4 2025, with some measures extended into 2026. Finance Minister Purbaya Yudhi Sadewa said the plan would not alter the 2025 budget deficit forecast of 2.78% of GDP. Last week, authorities also injected IDR 200 trillion into five state-owned banks to boost liquidity, spur lending, and support growth. On monetary policy, Bank Indonesia is expected to keep rates unchanged at 5% on Wednesday after back-to-back cuts in July and August. Earlier this month, the rupiah touched a one-month low following the sudden resignation of long-serving finance minister Sri Mulyani Indrawati, widely respected for her prudent fiscal stance, amid nationwide protests. Meanwhile, the dollar index held around 97.3, near a two-month low, as markets awaited a Fed rate cut.

Rupiah Firms on Fiscal Stimulus, Bank Injection

The South Korean Won touched 1380.00 against the USD, the highest since August 2025. Over the past 4 weeks, US Dollar South Korean Won lost 0.65%, and in the last 12 months, it increased 4.55%.

South Korean Won Hits 4-week High

The Australian dollar held steady around $0.666 on Tuesday, following gains from the previous session, supported by diminishing expectations of further interest rate cuts by the Reserve Bank of Australia. Markets are now pricing in an 86% probability that the central bank will keep rates unchanged at its September meeting. This sentiment has been bolstered by a strong July trade surplus, resilient Q2 GDP figures, and hotter July inflation. Additionally, consumer inflation expectations rose in September, signaling sustained domestic demand and raising concerns about a possible resurgence in inflationary pressures. Meanwhile, the Aussie dollar also found support from encouraging geopolitical developments. On Monday, the US and China reached a commercial agreement that would bring TikTok under US ownership, with final approval anticipated during a Friday call between President Donald Trump and President Xi Jinping.

Australian Dollar Steady

The offshore yuan hovered around 7.12 per dollar on Tuesday, trading in a tight range as investors digested fresh developments in Sino-US trade negotiations. President Trump said talks in Spain are “progressing well,” with a framework deal on TikTok’s divestment confirmed ahead of his planned discussion with Xi Jinping on Friday. However, China criticized a US proposal for steep tariffs on Chinese goods linked to Russian oil, calling it “unilateral bullying” but reaffirming its preference for dialogue. Meanwhile, Tencent Holdings is launching its first offshore yuan bond sale since 2021, with 5-, 10-, and 30-year notes aimed at boosting CNH liquidity and drawing more international investors, adding support for the yuan. Elsewhere, markets stayed cautious ahead of the much-anticipated Federal Reserve meeting, where a widely expected September US rate cut could lend further lift to the yuan.

Offshore Yuan Treads Narrow Range

The New Zealand dollar fell to around $0.596 on Tuesday, paring some of the previous session’s gains, as investors awaited GDP data expected to underscore the need for further stimulus. The New Zealand economy is projected to slip back into contraction after two consecutive quarters of growth, suggesting that recent momentum may have been short-lived and could prompt additional policy easing by the Reserve Bank. Meanwhile, losses were capped by a weaker US dollar, as markets positioned for a widely anticipated 25 bps rate cut by the Federal Reserve, though some investors still saw a small chance of a larger half-point move. Sentiment was further supported by signs of progress in US-China trade talks in Spain, easing concerns about spillover risks to New Zealand’s export-heavy economy given its close trade ties with China. On the data front, annual food inflation held steady at 5% in August, unchanged from July and remaining at its highest since November 2023.

New Zealand Dollar Declines

The yen strengthened toward 147 per dollar on Tuesday, extending gains for a second session as the dollar eased ahead of an expected Federal Reserve rate cut. Markets are almost fully pricing in a 25 basis point reduction this week, with a total of 67 bps of easing projected for the year. Those expectations have been underpinned by data showing a cooling US labor market and subdued inflation. Domestically, the Bank of Japan will set policy this week and is widely expected to keep rates unchanged at 0.5% as officials assess the impact of US tariffs on Japan’s export-driven economy. Traders are also awaiting fresh data, with exports and imports expected to remain weak and core CPI forecast to slow to 2.7%, the lowest since November 2024.

Japanese Yen Gains as Dollar Weakens

DXY decreased to 97.25, the lowest since July 2025. Over the past 4 weeks, Dollar Index lost 0.93%, and in the last 12 months, it decreased 3.62%.

Dollar Index Hits 7-week Low

The South Korean won rose to around 1,383 per dollar on Tuesday, marking its second consecutive session of gains as the dollar weakened ahead of the Federal Reserve’s September 16–17 policy meeting, where markets widely expect a 25-basis-point rate cut. Further bolstering investor sentiment, hopes for easing US–China tensions were lifted after Treasury Secretary Scott Bessent said negotiators had reached a framework for TikTok’s US operations during talks in Madrid, with confirmation expected in a call between Presidents Trump and Xi on Friday. While market participants caution that unresolved issues such as tariffs, data algorithms, and IP rights temper optimism, the prospect of reduced trade frictions boosted risk appetite in Asian markets.

Won Strengthens on Fed Cut Bets, US–China Talks

The dollar index steadied around 97.3 on Tuesday, but traded near an over two-month low as the Federal Reserve begins its two-day policy meeting later today. Markets are almost fully priced for a 25 basis point cut this week, with a total of 67 bps of easing expected by year-end. Expectations have been reinforced by recent data pointing to a cooling labor market and subdued inflation despite tariffs. President Donald Trump also urged Fed Chair Jerome Powell to deliver a larger cut, citing weakness in housing. On the data front, investors will watch retail sales, import prices, housing indicators and business inventories later today. On trade, Trump said Monday that US-China negotiations in Spain were progressing well, with Trump and Chinese President Xi Jinping set to speak on Friday to finalize terms.

Dollar Steadies Ahead of Fed Meeting

The Mexican peso strengthened past 18.4 per US dollar, the strongest level since July 2024 as the US dollar weakened and Mexico’s macro fundamentals held up, increasing the appeal of peso-denominated assets. The dollar hit its weakest level since late July as markets awaited the Federal Reserve’s policy decision and priced in a 25 basis point cut with a small chance of a 50 basis point move after data showed a cooling labour market. At the same time Banco de México has kept policy tight and signalled careful calibration even as inflation moderates. Higher real interest differentials relative to peers, sustained demand for carry in forward markets, and Mexico’s close trade links with the United States have all supported demand for local paper, limiting capital outflows.

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