The value of Asian currencies fell on Thursday as a result of the strengthening of the US dollar and the hawkish monetary policy of the US Federal Reserve. There were declines in the value of the Indian rupee, South Korean won, Taiwanese dollar, Philippines peso, Thai Baht, China renminbi, and Singaporean dollar.
On Thursday, the Indian rupee began marginally down versus the US dollar, matching declines in all Asian currency markets. The rupee’s value was 83.12 to the dollar as of 9:10 am, down 0.05 percent from its previous close of 83.08.
Asian markets have been under pressure due to the Federal Reserve’s indication of another rate hike later this year and a smaller-than-expected interest rate decrease in 2024. According to analysts, these actions could tighten monetary conditions and perhaps affect the inflow of foreign capital into the region.
However, the Federal Reserve emphasized that because of the uncertainty and risk involved with financial markets, long-term estimates are vulnerable to change.
Analysts are eagerly watching any potential responses from the Reserve Bank of India to these events. In the immediate term, they see strong potential for a downward reversal towards 82.80 and 82.50 and identify 83.25-83.30 as a key mark to watch for the Indian rupee.
These factors have also had an impact on other Asian currencies. The Taiwanese dollar fell by 0.39 percent, the Philippines peso by 0.24 percent, the South Korean won by 0.76 percent, and the Thai baht by 0.24 percent each. Both the Singapore dollar and the China yuan had decreases of 0.2 percent.
The dollar index, which gauges the strength of the dollar against other major currencies, was up 0.25 percent from its previous closing of 105.33 to 105.587 at the time of writing. The Federal Reserve’s hawkish approach, this increase in the U.S. dollar, and rising crude oil prices have all put downward pressure on Asian currencies.