Asian currencies experienced varied performance on Monday, influenced by differing regional growth prospects and concerns over Federal Reserve policy. The Australian Dollar weakened, falling close to the 0.7000 level against the US Dollar as investors remained cautious ahead of the US Personal Consumption Expenditures Price Index (PCE) release, according to FX Street.
Meanwhile, the Euro traded near three-month lows against the US Dollar, pressured by expectations of a hawkish Federal Reserve. Despite easing tensions in the Middle East reducing safe-haven demand, the stronger US Dollar continued to weigh on the EUR/USD pair, FX Street reported.
MUFG’s Michael Wan highlighted that Asian currencies, particularly from AI export-driven economies like South Korea, Taiwan, Malaysia, and Singapore, are expected to benefit from stronger regional growth differentials compared to the US. Japanese investors should watch these dynamics closely as they may impact FX and equity markets amid global monetary policy shifts.