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Asian Currencies Rangebound as Middle East Tensions and Fed Meeting Weigh
Jun 18, 2025 7:26 AM - Parth Sanghvi
Image credit: Jason Leung
Most Asian currencies saw little movement on Wednesday, as ongoing Israel‑Iran hostilities and uncertainty over U.S. trade tariffs kept markets on edge. The dollar inched lower ahead of the Federal Reserve's policy decision, offering modest relief but failing to spark broad‑based currency rallies.
Major Drivers of Currency Action
1. Geopolitical Risk Keeps FX Volatile
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The Israel‑Iran conflict continued without signs of de‑escalation, driving safe‑haven demand for the U.S. dollar and Japanese yen.
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Asian currencies remained largely rangebound as investors priced in further risk‑off flows.
2. Fed Meeting in Focus
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A string of weak U.S. economic data—retail sales, manufacturing surveys, and jobless claims—lifted bets on a dovish Federal Reserve tilt.
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Market participants awaited the Fed's rate decision for clues on future monetary policy.
Track upcoming policy announcements and economic releases via the Economic Calendar API. economics-calendar
3. Tariff Deadline Looms
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With an early‑July deadline for President Trump's trade tariffs approaching, uncertainty over U.S. tariff policy weighed on export‑dependent currencies, notably the Japanese yen and Australian dollar.
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Japanese trade data underscored the negative impact of tariffs on exports, reinforcing the yen's defensive bid.
Regional Currency Highlights
| Currency Pair | Change | Notes |
| USD/KRW | −0.6% | South Korean won strengthened amid risk‑on flows |
| USD/TWD | −0.4% | Taiwan dollar outperformed on tech export resilience |
| USD/CNY | Flat | Markets eye PBOC rate decision later this week |
| AUD/USD | +0.2% | Aussie dollar modestly stronger on dovish Fed bets |
| USD/SGD | Flat | Singapore dollar contained by trade and rate uncertainty |
| USD/INR | Flat | Indian rupee stuck in narrow band amid mixed inflow |
| USD/JPY | −0.1% | Yen steadied after PM Ishiba's tariff comments |
What to Watch Next
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PBOC Loan Prime Rate Decision: The People's Bank of China is set to announce its benchmark loan prime rate. Any surprise cut or hold will influence the yuan.
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Fed Statement and Press Conference: Chair Powell's wording on rate paths and balance‑sheet policy will set the tone for dollar strength.
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Trade‑Policy Updates: Watch for any U.S. or Japanese statements on tariff negotiations ahead of the July deadline.
For real‑time FX rates and historical data, access the Forex Daily API.
By monitoring key policy events and leveraging live FX data, investors can better navigate the ongoing volatility in Asian currency markets.
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