Asian currencies declined on Tuesday as the U.S. dollar rebounded slightly, with regional peers tracking modest gains in the Japanese yen and South Korean won.
The U.S. Dollar Index, which measures the greenback against a basket of major peers, rose 0.1% to 98.95 by 04:50 GMT, following a 0.2% increase overnight. The Japanese yen strengthened 0.2% to 159.35 per dollar, while the South Korean won edged up 0.1%. The offshore Chinese yuan and Singapore dollar also slipped against the dollar.
The dollar’s uptick came after the U.S. announced fresh sanctions targeting Iran, a move that followed Tehran’s vow to retaliate. U.S. Treasury Secretary Scott Bessent warned that countries and businesses continuing to trade with Iran risked exclusion from the dollar-based financial system. The geopolitical tensions added to market caution ahead of key U.S. data releases.
Treasury yields remained in focus as the U.S. plans to double its quarterly buybacks of 10- to 30-year securities to $4 billion per operation starting September 10. The U.S. General Account, holding roughly $940 billion in cash, could be used to fund purchases of longer-dated debt, supporting demand for Treasuries.
Investors are also eyeing upcoming economic indicators, including Wednesday’s release of the July personal consumption expenditures (PCE) price index, a key inflation gauge. Federal Reserve Chair Kevin Warsh is scheduled to deliver remarks at the Jackson Hole symposium on Friday, where markets will assess signals on future monetary policy. The Reserve Bank of Australia’s meeting minutes are also due for discussion among policymakers.
The dollar’s resilience and geopolitical risks kept regional currencies under pressure, with the Australian dollar slipping against its U.S. counterpart. Market participants are balancing the impact of sanctions, Treasury operations, and central bank signals as they navigate short-term volatility.
