Asian Currencies Face Worst Week in Over a Year as Fed Rate Cut Bets Decline
These currencies are falling because many jobs in the US make the dollar look better.
The Malaysian ringgit, Indonesian rupiah, and Thai baht have gone down a lot.
Asian currencies are having a tough week, the worst in over a year. This is mostly because people now think the Federal Reserve won’t cut interest rates as much as they thought before.
The Bloomberg index says Asian currencies have dropped by 0.8% this week. It is the largest drop since September 2023.
The Malaysian ringgit, Indonesian rupiah, and Thai baht have gone down a lot.
These currencies are falling because many jobs in the US make the dollar look better. Also, problems in the world make people want to keep their money in safer places, like the dollar.
This drop comes after a strong quarter when Asian currencies were doing well compared to other emerging markets.
At present, traders estimate only a 29% chance of a significant rate cut at the Fed's next meeting, down from 50% just a week ago.
The Malaysian ringgit, Thai baht, and Indonesian rupiah are now the weakest currencies in emerging markets, each falling over 2% this week.
This decline is expected to continue due to tensions in the Middle East, making many people want to invest in safer options like the US dollar.
There are also worries about whether China's economic recovery can last.
