Most Asian currencies showed slight gains on Thursday, following the weakening of the dollar after weak U.S. employment data, which heightened expectations for further interest rate cuts by the Federal Reserve.
Mediocre economic data from the region put pressure on most currencies, while traders mostly avoided risks amid heightened uncertainty regarding U.S. trade policy.
This week’s focus is on new economic data from the U.S., as well as the Reserve Bank of India's interest rate decision. A potential phone call between U.S. President Donald Trump and Chinese President Xi Jinping will also be closely monitored, although Washington and Beijing have not yet provided clear indications of when this dialogue will take place.
The Japanese yen slightly weakened, with the USDJPY pair rising by 0.1% after weaker-than-expected wage data for April. These figures raised questions about how strong private consumption remains in Japan, which could cloud growth prospects in 2025.
The South Korean won strengthened slightly, with the USDKRW pair declining by 0.1% after GDP data showed that the economy contracted less than initially thought in the first quarter. Sentiment towards South Korea also remained optimistic after the liberal party won the snap presidential election held earlier this week, which could ensure greater political stability in the country in the future.
The Australian dollar pair AUDUSD fell by 0.1% after April trade data came in weaker than expected due to increased obstacles for the country's key commodity exports.
The Singapore dollar pair USDSGD remained unchanged.
