Key Moments
- Most Asian currencies slipped while the US Dollar Index rose 0.3% during Asia trading hours.
- The Indian rupee rebounded more than 1% intraday after touching successive record lows earlier in the week.
- Softer U.S. labor market figures added uncertainty to the Federal Reserve’s interest rate outlook.
Asia FX Softens as Dollar Firms
Most Asian currencies moved slightly lower on Wednesday as traders evaluated the Federal Reserve’s potential interest rate trajectory following weaker U.S. labor market data. At the same time, the Indian rupee staged a notable recovery from all-time lows amid signs of possible central bank activity.
The US Dollar Index, which tracks the U.S. currency against a basket of major peers, climbed 0.3% during Asian trading. US Dollar Index Futures were also up 0.3% as of 04:55 GMT.
Indian Rupee Rebounds After Hitting Fresh Records
The Indian rupee strengthened more than 1% against the dollar after having fallen to successive record lows earlier in the week.
The USD/INR pair was last quoted 0.6% lower at 90.385 rupees, after dropping as much as 1.2% to 89.785 rupees earlier in the session. This followed a record high for the pair of 91.077 on Tuesday.
According to media reports, state-owned banks were observed selling U.S. dollars, prompting market speculation that the Reserve Bank of India may have stepped in to limit excessive currency volatility.
The rupee has faced sustained downward pressure from ongoing foreign portfolio outflows, robust dollar demand from importers, and uncertainty related to trade relations with the U.S.
| Currency Pair | Latest Move | Notable Levels / Comments |
|---|---|---|
| USD/INR | Last down 0.6% | Intraday low at 89.785 rupees; record high at 91.077 on Tuesday |
| US Dollar Index | Up 0.3% | Also 0.3% higher in futures as of 04:55 GMT |
| USD/CNY (onshore) | Little changed | Stable in Asia trade |
| USD/SGD | Down 0.2% for the dollar | Singapore dollar gained 0.2% |
| AUD/USD | Down 0.3% for the Australian dollar | Aussie weakened against the greenback |
| USD/JPY | Up 0.3% for the dollar | Yen softened ahead of BOJ decision |
| USD/KRW | Up 0.5% for the dollar | Won declined against the greenback |
Fed Outlook Clouded by Cooling U.S. Labor Market
Data released on Tuesday showed that U.S. nonfarm payrolls increased by 64,000 in November, topping economists’ expectations. However, this came after a steep 105,000 job loss in October and coincided with the unemployment rate rising to 4.6%, its highest level since 2021.
The figures indicated a cooling labor market and added ambiguity to the future course of Federal Reserve policy.
“Job creation continues to slow and unemployment is on the rise, which will mean the doves at the Federal Reserve will continue to make the case for further interest rate cuts,” ING analysts said in a note.
“The risk of outright job losses is growing and with mid-term elections less than a year away the political pressure on the Fed to do more will intensify,” they added.
Mixed Moves Across Asian Currencies
Within Asia, currency moves were uneven. The onshore Chinese yuan saw its USD/CNY pair largely unchanged. The Singapore dollar strengthened, with the USD/SGD pair declining 0.2%.
The Australian dollar weakened, with the AUD/USD pair down 0.3%. The Japanese yen softened as the USD/JPY pair gained 0.3%, while the South Korean won also came under pressure, with the USD/KRW pair advancing 0.5%.
BOJ Policy Decision in Focus
Investor attention is increasingly turning toward Japan, where the Bank of Japan is scheduled to announce its policy decision later this week.
The central bank is broadly expected to raise interest rates in response to indications of more persistent inflation and improving wage trends.
A potential rate increase would represent a further shift away from Japan’s long-standing ultra-loose monetary policy framework and could lend additional support to the yen.





