Investing.com– Asian currencies and the U.S. dollar were largely subdued on Friday as investors weighed rising energy costs and geopolitical tensions, while the yen held firm after a safe-haven rally driven by concerns over global growth and technology-sector valuations.
The US Dollar Index traded largely flat at 101.60 by 03:33 GMT, remaining near a three-week low. It was set for a second straight weekly loss.
Yen hits 1-mth high on weaker dollar, safe-haven demand
The Japanese yen’s USD/JPY pair edged up 0.1% to 156.90 yen on Friday, after dropping nearly 1% in the previous session.
The yen strengthened to its highest level in more than a month, as investors sought safety amid concerns about the sustainability of artificial intelligence-related investments and escalating Middle East tensions.
Meanwhile, falling U.S. Treasury yields reduced support for the greenback. The benchmark 10-year Treasury yield approached a one-month low of 4.953%, reflecting demand for safer assets.
Oil prices remained a major concern for regional currencies, with Brent crude trading near $114 a barrel on Friday after surging 4% on Thursday as attacks in Saudi Arabia heightened fears of supply disruptions.
Higher crude prices threaten to fuel inflation and complicate the monetary policy outlook across Asia, particularly for energy-importing economies such as Japan, India and South Korea.
Asia FX subdued; central bank meetings awaited
Elsewhere in Asia, the Chinese yuan’s onshore USD/CNY and offshore USD/CNH pair traded largely unchanged, remaining near four-year lows.
The South Korean won’s USD/KRW pair edged 0.2% lower, while the Singapore dollar’s USD/SGD traded flat.
The Indian rupee extended losses on Friday, erasing most of sharp gains recorded earlier this week on RBI’s support measures.
The USD/INR pair rose 0.3% to 95.109, after jumping 0.4% in the previous session. It had fallen for nine straight sessions through Wednesday.
The Australian dollar’s AUD/USD pair edged down 0.1%.
Investors were also preparing for a series of major central bank decisions next week.
The U.S. Federal Reserve is expected to hold interest rates at 3.75%-4.00% on October 28, while the European Central Bank and Bank of Japan are due to announce policy decisions on October 29 and 30, respectively.
