Most Asian currencies strengthened on Monday as the U.S. dollar extended losses following weaker-than-expected nonfarm payrolls data, which raised uncertainty over the U.S. economy and interest rate outlook. The greenback retreated about 0.4% after Friday’s report showed July job growth slowing sharply, with downward revisions to the prior two months, signaling a cooling labor market. Concerns also mounted after President Donald Trump fired the Bureau of Labor Statistics chief, fueling doubts over U.S. economic data credibility.
Despite Monday’s gains, most regional currencies remain pressured after recent losses, driven by worries over Trump’s new trade tariffs and a mixed outlook for Federal Reserve policy. The Fed signaled last week it has no immediate plans to cut rates, though traders are now betting on rate cuts amid mounting political pressure from Trump. The early resignation of Fed Governor Adriana Kugler gives Trump another chance to reshape the central bank’s board.
Among major movers, the Japanese yen (USDJPY) rose 0.2%, benefiting from safe-haven demand. The Chinese yuan (USDCNY) climbed 0.4%, while the South Korean won (USDKRW) strengthened 0.3% and the Singapore dollar (USDSGD) gained 0.1%. The Australian dollar (AUDUSD) traded flat.
The Indian rupee, however, underperformed, with the USDINR pair inching higher after Trump announced a 25% tariff on Indian exports. Markets remain cautious as trade talks between Washington and New Delhi show little progress.
Investor attention now turns to the Reserve Bank of India’s upcoming policy meeting, where the central bank is widely expected to cut interest rates to counter economic headwinds. Meanwhile, broader Asian forex sentiment will likely remain sensitive to U.S. data, Fed policy signals, and ongoing trade tensions.
